AA’s loyalty points policy undermines agents, ACTA says

ACTA says that American Airlines’ policy on loyalty points “undermines the critical role of travel agencies and advisors in the industry value chain,” while its policy on New Distribution Capability usage thresholds are ‘not feasible.’

In February 2024, American Airlines announced that effective May 1, 2024, only direct bookings with American Airlines and selected partner airlines, along with a specific list of ‘preferred travel agencies’ would qualify for earning traveller loyalty points.

While ACTA responded at that time, it has now issued a further statement in which ACTA president Wendy Paradis makes it clear that the association “strongly opposes American Airlines’ decision to block loyalty points earnings for bookings made through ‘non-preferred’ channels effective May 1, 2024. This move directly restricts consumer choice and undermines the critical role of travel agencies and advisors in the industry value chain.”

Paradis states that: “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. 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.”

ACTA’s president points out that: “Consumers depend on travel agencies and advisors to provide expert guidance, unbiased advice, and a wide array of 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.”

And she adds that “this decision will have far-reaching consequences for the openness and competitiveness of the travel marketplace. 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.”

‘Grave concerns’ about AA’s NDC policy

As for American’s NDC policy, Paradis argues 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,” ACTA’s president says that the association has “grave concerns about the way American Airlines is implementing this change.”

In fact, Paradis argues that “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 continues: “The expectation of a 30% NDC usage threshold by April 21, 2024, and 70 per cent by April 30, 2025, is simply not feasible for many travel agencies and advisors, particularly smaller independent businesses, to meet within the specified timeframe. This move will disproportionately impact agencies that lack the technological infrastructure or resources to comply with these onerous requirements.”

ACTA appeals to AA to reconsider policies

Paradis urged American Airlines to reconsider its decision and engage in a meaningful dialogue 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,” Paradis cautioned, “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.”