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Wednesday,  May 22, 2024 7:21 PM 

American Airlines' policies on loyalty points, NDC disregard needs of agents, consumers: ACTA


American Airlines' policies on loyalty points, NDC disregard needs of agents, consumers: ACTA
(File photo/Pax Global Media)
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and DailyXtra.ca. Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

The Association of Canadian Travel Agencies and Travel Advisors (ACTA) has issued yet another statement opposing American Airlines' decision to block loyalty points earnings for bookings made through “non-preferred” channels.

As previously reported, American Airlines, starting May 1, will stop awarding frequent flyer miles and Loyalty Points through its AAdvantage program to passengers who don’t book direct with the airline or a small number of partner carriers and “preferred” travel advisors.

Both the American Society of Travel Advisors (ASTA) and ACTA in Canada have spoken out against the decision already.

In a previous statement, Wendy Paradis, ACTA’s president, viewed the change as a "significant departure from equitable business practices and a direct threat to the healthy competitive environment that has long benefitted consumers and the travel industry alike."

READ MORE: ACTA joins ASTA in condemning American Airlines' loyalty program change

In an updated statement on Wednesday (April 10), Paradis said the move directly restricts consumer choice and “undermines the critical role of travel agencies and advisors in the industry value chain.”

ACTA President Wendy Paradis. (Pax Global Media/file photo)

“By tying loyalty rewards to direct bookings or bookings through a limited number of preferred agencies, American Airlines is severely limiting the channels through which consumers can earn loyalty points,” Paradis said in a news release. “This decision will inevitably steer customers away from travel agencies and advisors who are uniquely positioned to advocate for their interests and provide comprehensive, competitive travel options.”

Consumers depend on travel agencies and advisors to provide expert guidance, unbiased advice, and travel options tailored to their individual needs and preferences.

“Restricting the ability to earn loyalty points through these channels will undoubtedly disadvantage consumers who value booking through their trusted travel partners,” Paradis said.

The decision will have far-reaching consequences for the openness and competitiveness of the travel marketplace, ACTA says.

“By leveraging its position to restrict consumer choice, American Airlines is engaging in practices that will lead to higher prices, stifled innovation, and a less dynamic travel industry,” Paradis said.

AA policy on NDC usage thresholds “not feasible”

ACTA asserts that American Airlines' attempt to force the adoption of New Distribution Capability (NDC) on the travel industry will have “severe unintended consequences” for travel agencies, advisors, and consumers.

“While ACTA recognizes the potential benefits of NDC and supports technological advancements in the travel industry, we have grave concerns about the way American Airlines is implementing this change,” Paradis said.  

Moreover, the requirements set by American Airlines for agencies to achieve "preferred" status are “excessively stringent and fail to consider the diverse capabilities and resources of travel agencies across the country,” she said.

The expectation of a 30 per cent NDC usage threshold by April 21st, 2024, and 70 per cent by April 30th, 2025, is “simply not feasible for many travel agencies and advisors,” particularly smaller independent businesses, to meet within the specified timeframe, Paradis said.   

“This move will disproportionately impact agencies that lack the technological infrastructure or resources to comply with these onerous requirements,” she said

Appeal to AA to reconsider & discuss

ACTA is urging American Airlines to reconsider their decision and discuss it with the retail travel community to find a more balanced approach to NDC implementation and loyalty program changes.

“We firmly believe that any changes must be a collaborative process that considers the needs and concerns of all stakeholders, rather than a unilateral mandate,” Paradis said.

“Our organization remains steadfast in its commitment to working with all parties involved to develop solutions that promote innovation, efficiency, and customer satisfaction while maintaining a fair and competitive marketplace.”

“However, we vehemently oppose any action that disregards the interests of travel agencies, advisors, and consumers. Only by working together can we forge a path forward that protects consumer choice, embraces technological advancements, and ensures a thriving and competitive travel industry for all Canadians.”

Bypassing the advisor

Under American Airlines’ new policy, tickets issued before May 1, regardless of the date of travel, will earn miles and Loyalty Points no matter where the ticket was purchased from.

The airline hasn’t revealed which travel agencies it would allow passengers to still earn AAdvantage miles and Loyalty Points through.

In a news release, the airline said it will share a list of “eligible preferred agencies” on aa.com in late April. But even with preferred agencies, American said it will only reward miles and points on Basic Economy fare tickets when booked directly through American or eligible partner airlines.

Corporate travellers won’t be impacted by the changes, the airline said.

The move is part of a shift by airlines to move away from using travel advisors – and paying them commissions – and bring ticket sales in-house.

About 60 per cent of American's ticket sales are made directly through the airline, Scott Chandler, vice-president of revenue management at American Airlines, told the Associated Press. 

“The old way of booking a ticket relied on agents having a ton of experience and understanding product attributes,” Chandler said in a previous interview with the outlet. “The old technology doesn't let us explain things very well, and it is a little more confusing for customers when we introduce new products.”


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