American Airlines recently surprised the industry with its decision to back track on its bold New Distribution Capability (NDC) strategy. The choice came after announcing lower-than expected revenue from last-minute domestic sales, with the airline CEO admitting “we moved faster than we should, and we didn’t execute well.” Sharing the planned change at an investor conference at the end of May, Robert Isom said:

“We regret that and the difficulty that it created for our agency and corporate communities. So we are going to modify our distribution strategy […] We’ve used a lot of sticks. We’ve got to put some more carrots in place and make sure our product is available wherever customers want to buy it.”

Now, pieces of the new NDC strategy are starting to take shape with TMR reporting on a message sent from American to its partners. TMR described the new strategy as focusing on removing pain points for partners and switching to incentives over punishment. The airline plans to add rewards for advisors who book through NDC with added bonuses for American’s “enhanced products”  and reward ancillary revenue. Additionally, selected content dropped from EDIFACT will return but some will remain only available through direct and NDC-enabled channels.

TMR reported the message saying:

“We continue to believe NDC is the future of airline distribution and want to express our deep appreciation to those agencies that have worked so hard to migrate to NDC channels. We’re committed to and excited about continuing our exploration of the capabilities and benefits new technology can bring.”

 

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