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For those of us who appreciate the opportunity to double-dip on points and miles earning, May 1, 2024 July 11, 2024 was a date circled in red on the calendar. Why? Multiple times this year, American Airlines teased it would eliminate AAdvantage® miles and Loyalty Point earnings on flights booked through online travel agencies (OTAs). And come mid-April mid-July, we'd know the names of these “preferred” agencies.
But wait no more; American Airlines has called yet another audible and scrapped these plans entirely. Here's what you need to know.
American Airlines Scraps ‘Preferred Partner’ Changes for How You Earn
Undoubtedly, stripping the ability to earn AA miles and Loyalty Points on third-party bookings was a big deal. Sure, the airline would prefer you book directly; nonetheless, this would have been a significant policy change. That's why the news about American Airlines scrapping this change entirely is an even bigger deal.
In a statement this morning at the Bernstein Conference, American Airlines' CEO, Robert Isom, walked back the airline's plans for only offering rewards for direct or preferred agency bookings, sharing the following:
“…[N]ext month, we were going to differentiate who earns AAdvantage miles and who didn't, based on where they booked. That's off. We're not doing that because it would create confusion and disruption for our end customer, and we're going to make sure that we take care of it.”
In other words, you no longer have to worry about where you book your ticket if you want to earn AA miles.
Isom didn't share whether the airline would revisit cracking down on miles earned through indirect bookings but did indicate American is “unequivocally committed to getting those customers back” that it had previously driven away. Hopefully, this means positive things are in store for the world's largest airline.
Final Thoughts
The long-awaited change to how you'll earn AAdvantage miles on bookings is no more. American Airlines scrapped its plans to only award miles on bookings made directly through the airline and preferred travel agencies.
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Let’s hope while at it, they also scrap the plan to end points transfers from Bilt Rewards. Not holding my breath, tho.
It is all about American Airlines paying less to sell tickets and gaining more revenue from selling other travel components. Essentially AA wants to control the marketplace for its tickets. What the public does not understand is agencies, corporate and personal, and used to be the main sellers of air travel. AA owned Sabre and controlled over 40% of that marketplace for over 40 years. Sabre earned AA plenty of fees for selling other services with airline tickets. Then airlines as a whole, cut commissions and then discontinued commissions because they wanted to distribute their tickets in the least costly fashion. Then the airlines spun off their computer reservation systems and lost control of the marketplace. Enter the OTAs as the best place (after direct sales) for airlines to sell inventory. The original OTAs (Travelocity and Orbitz) were partnerships of the airlines to battle against Expedia (started by Microsoft). Remember transparency in ticket pricing being the hot term about 20 years ago. Now only Expedia and Booking Holdings are left.
NDC is not new. Other airlines use NDC, but don’t place demands on agencies, that AA is trying to do right now. AA wants control. Personally, I cannot see this working out well for AA. Agencies are ready to litigate this as they feel spending more money to sell AA tickets may not be worth the cost. This is about making the market bend to AA’s will. Like, only certain agencies will sell AA tickets that earn miles/Loyalty Points, etc. AA is trying to keep this below the radar so it won’t affect agencies’ clients. Once AA announces what agencies are preferred, that cat is out of the bag. But NDC should not affect clients/customers because NDC is not about passengers. It is all about American controlling how its tickets are sold.
I am actually concerned about this NDC, and suspect other points and miles enthusiasts might be more concerned than you think. Although I have done my own flight bookings direct thru the airlines own websites for years just to eliminate points of failure on my trip, choosing between cash or points fares depending on the value, American’s original announcement also included adding more elite-like perks exclusive to tickets booked direct (or via “preferred” channels) only. So passengers are being targeted.
Also, my parents do not like going online, so they use a travel agent for all their flights and car rentals (and use email+phone for hotels). Also, group tours we have participated in have ALL been organized by travel agents. Cruise lines in my experience still seem to prefer bookings be done through travel agents (or thru airline, hotel, or bank travel portals) rather than direct, which makes sense particularly if you want a cruise with a certain theme.
While I certainly never expect a return to my childhood and young adult hood when I booked flights by walking down the street to a travel agency store, when there were probably 100X as many travel agents as today, where I (and people I know) continue to need travel agents its because they offer a situational value ad related to the particular type of trip. A lot of travel related bonus mile offerings (even through American Aadvantage eshopping, lol) for travel related services are actually from online travel agents! So yes, attacks on the travel agent profession are a concern for me and I believe other points and miles enthusiasts.
So American said “preferred” agencies are implementing “NDC” bookings.. What is an “NDC” booking ??
Ah, good point that we didn’t say what NDC is. I just added a clarification, but it’s new distribution capability (NDC) connection–basically a routing method for AA participating in the traffic and ensure it’s selling the tickets it wants to sell at the price it wants to sell them at.
Ryan, thank you for clarifying. Sounds like most OTAs will probably “play ball” with American’s technology – but will be interesting to see if any who dont will or will not include bank OTAs (particularly those who give us 5X-10X credit card points on travel bookings) or if something else distinguishes those who do not play along, or if it ends up basically just being small unknown OTAs who maybe just do not have the manpower or financial wherewithal to implement American’s NDC who end up not making the “preferred” cut.
I could even potentially see a scenario where, say, AX and Chase become “preferred” but Capital One does not perhaps if Capital One’s Hopper tech for finding best prices in future not just past has any conflict with NDC’s purpose of making sure OTA presented American flight pricing is American’s chosen pricing. Tho seems like some of the other OTAs have their own tech for assisting price comparison..
Basically there are only 2 large OTAs: Expedia and Booking Holdings. They will not have an issue making thresholds by the deadlines. But many small agencies and other companies that book airline tickets like tour companies, will not have the ability to write tickets that earn miles/Loyalty Points. It will really affect small businesses that use local agencies for airline tickets.
It won’t affect the community of miles/points hobbyists as much because most of us do not earn our miles by actually flying. But if American is successful, the other airlines will follow their lead.
It is a good thing that AwardWallet is posting about this change in miles accrual. I think many customers do not know about this.
I have known about for this about a year, having been a travel agent. The removal for miles accrual from OTAs and other travel sellers, is going to be a big mistake for American Airlines. This will anger many customers enough to go to other airlines, who still allow accrual.
JohnB, so you (or your booking platform) will not be, or will not be able to, implement American’s NDC booking for your travel agency business?