The changes American Airlines this year began to make to its distribution strategy are having a measurable effect, according to the carrier. About 70 per cent to 75 per cent of the carrier’s revenue is now being booked through direct channels, American chief commercial officer Vasu Raja said during an earnings call on Thursday (20 July). And he anticipates that figure will grow.
“We are encouraged by this, and we actually are going to accelerate the changes,” Raja said.
“By the end of the year, 100 per cent of what we sell, customers will be able to service online through our app or our dot-com. We’ll roll out those features over time for new distribution technology. But as this happens, we’ll make increasingly less and less of our fare content available through traditional technology where customers are not able to get that quality experience they are looking for from us.”
American in April pulled as much as 40 per cent of its fares from EDIFACT channels, making them accessible only in New Distribution Capability channels.
Raja made those comments in the context of comparing booking trends among travellers who are members of its AAdvantage loyalty programme versus others, rather than comparing business with leisure customers. Non-members during the second quarter travelled 5 per cent less year over year, but revenue from that group grew by 5 per cent, he said.
For loyalty members, transactions grew by 8 per cent and revenue grew 13 per cent.
“That is certainly above what we had expected,” Raja said, adding that not only do these loyalty member customers bring in additional revenue and come with a lower cost of sale but American also found that about “25 per cent to 30 per cent of calls through reservations are bookings a travel agency originated and