American Airlines CEO to push direct distribution strategy as agents say it’s a deliberate bid to put them out of business

American Airlines CEO to push direct distribution strategy as agents say it’s a deliberate bid to put them out of business

American Airlines (AA) CEO Robert Isom is planning to make another push for direct selling at the Bernstein conference taking place in New York today (EST time). This comes despite travel agents’ claims that AA’s sales strategy is a deliberate attempt to put small agents out of business.

Isom will be speaking at the conference following a drop in the airline’s earning outlook. It now expects its unit sales revenue for the quarter to be down 6 per cent on last year.

Following the drop in its predicted fortunes, it revealed that its chief commercial officer Vasu Raja is departing the firm next month.  Raja has been with the airline since 2004. Before taking up the CCO job in April 2022 he also held the role of chief revenue officer and senior vice president of network strategy, where he was responsible for network and alliances.

Isom has been vocal about his ambitions to shift to direct selling in recent years, much to the chagrin of American travel agents.

Robert Isom

Speaking at the Skift aviation forum back in October 2023, Isom made a case against travellers booking through third-parties.

“When you shop for American, you ought to be able to shop and get access to everything without having to go through a number of different routes [or sources of information],” Isom said, arguing that its flyers shouldn’t “need a lot of intermediaries to tell them what’s available.”

Under Isom’s leadership, American Airlines has made a number of strategic moves that prioritise direct sales rather than sales from an intermediary.

Starting from 1 May this year, customers earn loyalty points and flights when they book directly through the airline or through a “preferred” travel agency.

“We want to make it more convenient for customers to enjoy the value and magic of travel,” said Raja, said at the time. “Not only does booking directly with American provide the best possible experience, it’s also where we offer the best fares and it’s most rewarding for our AAdvantage members.”

Naturally, American travel agents have not reacted well to Isom’s strategic shift. Last year  the American Society of Travel Advisors (ASTA) filed an unfair trade complaint to the U.S. Department of Transportation, saying the airline was causing “substantially higher air ticket prices for consumers and frustrated travel management companies.”

In a letter to the Federal Trade Commission FTC (sent on the 9th of May), ASTA’s chair Lina Khan said American Airline’s decision to only reward customers who booked directly or through a “preffered agent” was a deliberate effort to put small travel agencies out of business.

ASTA advert

“ASTA recently learned that AA requires agencies to sign an egregiously one-sided agreement as a condition of participation as a preferred agency,” the letter states.

“Among other things, it permits American to terminate the agency’s preferred status for any reason, or no reason at all, on thirty days’ notice. Practically speaking, the inclusion of this clause means that regardless of an agency’s achievement of the prescribed NDC booking thresholds on the measurement dates (or any other dates AA may arbitrarily choose to use instead), preferred status can be revoked at will at any time.”

According to ASTA’s public campaign, over seven thousand travel advisors and their clients have sent letters to their congress representatives to voice their concerns about American’s decision.


Latest News

  • Cruise

Cruise Traveller’s new Scottish Highlands cruise tour package

Australian small ship cruising specialist, Cruise Traveller, offers a 20-night land and sea holiday in the UK aboard the Lord of the Glens. The tiny cruise line’s 52-guest boutique vessel, Lord of the Glens, is purpose-built to explore the intricate waterways and lochs of the Scottish Highlands. It boasts a rich, traditional ambience with polished […]

  • Cruise

Celebrity Xcel’s keel-laying ceremony in France, with 2025 inaugural sail planned

Construction has commenced on Celebrity Cruises’ next ship, Celebrity Xcel, with a keel-laying ceremony at the Chantiers de l’Atlantique shipyard in Saint-Nazaire, France. An Edge Series ship, Celebrity Xcel will set sail in autumn 2025, with several new yet-to-be-revealed offerings. At the ceremony, Jason Liberty, president and CEO of Royal Caribbean Group (RCG), the parent […]

  • Destinations
  • Tour Operators

Globus unveils nine new independent tours for 2025

Coach touring brand Globus has unveiled nine new independent tours for 2025, from Bangkok to Bali and Abu Dhabi to Nepal. “With Globus Independent tours, our guests are free to enjoy the many benefits of touring, untethered and unscheduled,” APAC head of marketing, Globus family of brands (GFOB), Chris Fundell said. “Providing hand-picked hotel accommodations, […]

  • Hotels

Mandarin Oriental Hotel Group opens Mandarin Oriental Mayfair

The Mandarin Oriental has opened a second property in London, the Mandarin Oriental Mayfair, in the heart of historic Hanover Square. Designed by internationally renowned Rogers Stirk Harbour and Partners, the hotel is the first new build in Mayfair in over a decade. Bringing a modern architectural approach to one of London’s most storied squares, […]

  • Hotels

Outrigger Reef Waikiki Beach Resort unveils Coral Kids Club

On top of its US$85 million (AU$150m) transformation, Outrigger Reef Waikiki Beach Resort’s new Coral Kids Club provides an engaging activity centre for kids. Designed for keiki (children), ages 5-12, the activity centre offers daily cultural workshops with hands-on activities rooted around the Āina Guardian workbook. It was developed by Candes Gentry, co-author of Eat […]

  • Hotels

Minor Hotels announces fourth franchised hotel

Minor Hotels has added to its portfolio of more than 500 hotels in operation after signing Oaks Melbourne on William Suites as its fourth franchised hotel. The 220-room apartment hotel is the third Oaks property signed under a franchise model after the Oaks Toowoomba and Oaks Townsville Metropole. The proven success of these properties highlights […]

  • Destinations

Phuket unveils cutting-edge medical facility

Minor Hotels has announced Layan Life by Anantara, a world-class medical wellness facility that is set to elevate Phuket’s reputation as an international medical wellness destination. The new facility is set across 1,767sqm within the grounds of Anantara Layan Phuket Resort and is set to open in Q3 of this year. It offers a blend […]

  • Events

Out West Piano Fest comes alive in Bathurst

The three-day symphony of the senses comes back to Bathurst, at picturesque Blackdown Farm, as Out West Piano Fest returns 25-27 October. Located just five minutes away from Bathurst NSW is a pastoral heritage, art, and culture. It was also once home to Australian artist, Tim Storrier. The extensive gardens in full spring bloom offer […]

  • Attractions
  • Cruise

Japan in Bloom with Cruise Express

Send clients out to experience the best of the Land of the Rising Sun with Cruise Express and their Japan in Bloom expedition, a 21-night adventure. As interest in Japan hits an all-time high, Cruise Express is pleased to announce its ultimate Japanese bucket list trip. This adventure is geared for Australians wanting to tick […]

  • Road & Rail

Explore Uzbekistan with Golden Eagle Luxury Trains

Golden Eagle Luxury Trains presents an exclusive itinerary to Uzbekistan with ensuite cabins, a personal cabin attendant, and off-train excursions. Travelling aboard the opulent Golden Eagle train, with ensuite cabins, guests will dive deep into Uzbekistan’s spectacularly global cultural identity. A personal cabin attendant, all porterage and gratuities and all off train excursions are included […]