Do American Airlines AAdvantage miles ever expire? Eventually, yes — and it appears that won't change anytime soon.
American Airlines Recovering After Failed Direct Bookings Strategy
12.11.2024 - 21:29 / skift.com / Vasu Raja / Robert Isom / Justin Dawes
American Airlines is still hurting from its failed direct bookings strategy this year. But CEO Robert Isom says it’s on its way to recovering.
“We’re in the early stages. I think that we’re going to restore where we had been, and hopefully even better, as we move through 2025. And everything that I’ve seen so far since we reversed course back earlier this year says that we’re on that path,” Isom said on Tuesday during the Skift Aviation Forum in Texas.
The airline reported a loss of $149 million for the third quarter this year, trailing competitors Delta and United, as it continues to deal with the fallout of its distribution strategy. The company had a $545 million loss last year.
The problems came from when American championed a distribution strategy that involved selling tickets directly. Travel agencies filed complaints with the Department of Transportation over the changes, arguing that it was an anti-competitive practice.
The carrier received more backlash when it said it would let customers earn frequent flyer miles only if they booked tickets with certain travel agencies.
The botched approach ultimately led to the departure of chief commercial officer Vasu Raja. Now, American has been trying to return to a more traditional distribution strategy as it seeks to benefit from the same business travel boom that has boosted Delta’s and United’s profits.
“It’s just a reminder that no matter how well thought out and well designed an initiative might be, execution is critically important,” Isom said on Tuesday.
Now, the airline is working to improve relationships with travel buyers. Isom said he has been on listening tours with CEOs of partner companies, including 50 of the airline’s top corporate buyers.
“On that front, we’ve got to do a better job listening.”
One of the top things he heard from those CEOs is that they want access to choices — which is why he says the airline has had “incredible acceptance” in renegotiating relationships. He said he’s also heard that the industry does support modern retail technology so that airlines can transform the shopping experience for travelers — and that means American will continue rethinking how its distribution strategy looks in the future.
“We’re going to try to make sure that we take the best of what we have been doing and then line that up with where our customers really want to go.”
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