A year ago today American Airlines made 40% of its lowest fares available only through its own digital channels and New Distribution Capability (NDC)-driven channels.
Since then the carrier has doubled down on its goal of 100% internet-based bookings and announced during its full-year 2023 earnings that 80% of bookings now come via those channels. In addition, 65% of those are coming from its own web and mobile channels.
The U.S. carrier also recently tweaked its Aadvantage loyalty program making earning points and miles on basic economy fares only possible if bookings are made via the carrier or a partner airline from May 1.
Other classes of fares only earn rewards if booked through a “preferred travel agency” – determined in part by that agency’s use of American’s NDC connection – have a contract with AA or be enrolled in its Aadvantage Business program.
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For the last year, AmTrav Corporate Travel has been tracking the cost of fares to analyze the impact of AA’s move and today revealed that overall fares on the carrier’s website and AmTrav were lower 47% of the time in 2023. And in the first quarter of 2024, fares have been lower 52% of the time.
The travel management company (TMC) also tracked the average savings for 2023 and the first quarter of 2024 and revealed that fares were 9.5% lower and 11.2% lower, respectively, when compared to corporate booking tools.
If AA is the bellwether for other carriers, it’s no surprise airlines in Europe and the U.S. are following suit, albeit to different degrees.
United Airlines pulled basic economy fares from non-NDC channels last July and made the content only available via its digital channels and NDC-enabled channels. At the time, the carrier said it had no plans to move remove content beyond that.
Air Canada revealed its strategy last spring introducing a “distribution cost recovery” fee alongside an incentive for agents that book via NDC channels. The airline recently told PhocusWire sister publication The Beat that 13% of its worldwide agency coupons are now via NDC and the carrier’s goal is 25% of its indirect volume to come via NDC by the end of 2025.
Action from European carriers has also been mixed with Air France-KLM again delaying its planned surcharge for some TMCs in France and the Netherlands, to the beginning of July this year. The group has had a distribution surcharge in place since 2018.
And SAS recently announced that it would be increasing the surcharge on EDIFACT bookings as well as removing its cheapest fares from non-NDC channels.