American Airlines is pleased with its NDC rollout

The early days of American Airlines’ NDC full-content strategy have gone well, company executives asserted on Thursday morning. 

“The results have been extremely encouraging,” said chief commercial officer Vasu Raja during the carrier’s Q1 earnings call on Thursday. 

American began offering full NDC content through Sabre, Travelport and Amadeus on April 3, but at the same time roiled travel agencies by pulling approximately 40% of its content, including much of its low fares, from the traditional Edifact-supported GDS channel. The carrier also slashed agency-facing sales staff in March. 

Raja acknowledged that the strategy has led some travel agencies to book away from American, “but in aggregate we’re really encouraged by the revenue trends that we’re seeing,” he said. 

He said that at present, just more than 60% of American’s sales are either direct or via NDC, which is a 10- to 12-point increase from the first quarter of 2019. The carrier expects that figure will jump 10 points this quarter and could be as high as 80% by the end of the year. 

Raja also expanded on American’s strategic thinking for its aggressive push toward NDC and direct channels, even at the risk of unsettling corporate travel agencies and the rest of GDS-reliant travel agency community. In 2019, he said, American’s sales mix was approximately 30% leisure, 30% blended leisure and business and 40% business. Now, the business share is approximately 30%, while the other two categories have increased to approximately 35%.

Further, Raja said, even among flyers who are part of a corporate program, less than 40% of their spending is now purely business, compared to more than 50% pre-pandemic. Those customers, Raja said, are looking for a more streamlined and flexible shopping and servicing experience. 

As part of its strategy to push direct and digital channels, American is upgrading post-booking servicing capabilities on its website and app, Raja and chief digital and information officer Ganesh Jayaram said. They didn’t offer many details, but in an email after the call, the carrier said that over the next several months customers will be able to more easily modify or cancel bookings online, including applying trip credits for upcoming travel. 

Raja said that by the end of June, customers will be able to self-service any ticket they purchase with a U.S. point of origin through the American website or app. He added that some of those capabilities will be rolled out over the summer via NDC. 

“Change is never a thing that is all the way easy,” Raja said. But he added that it’s necessary. 

• Opinion: American’s NDC works for corporate agencies

American ekes out a Q1 profit

For the first quarter, American reported net income of $10 million, its first profit in the first quarter in four years. American is also the only carrier among the Big 4 (American, Delta, United and Southwest) to report positive earnings in the first quarter.

American reported first-quarter revenue of $12.19 billion, up 37% from last year’s omicron-impacted first quarter and in line with analyst expectations, according to the investment site Seeking Alpha. 

The carrier’s expenses came in at $11.75 billion for the first quarter, up 10.6% from last year due to high fuel and staffing costs and 9.2% more flying. 

CEO Robert Isom said American remains bullish on demand.

“We see a strong environment this summer and we’re highly confident that will continue going forward,” he said.

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