American tightens mileage earning rules to motivate NDC, direct bookings

American Airlines is changing its rules for earning AAdvantage frequent flyer miles, a move that will reward consumers who book directly on its website and those who book through agencies that have a new distribution capability (NDC) connection. 

Beginning with tickets issued on May 1, basic economy tickets will earn miles and loyalty points only if they are booked directly with American or with a partner airline.

For all other fare classes, bookings can also earn miles or points if booked through a “preferred travel agency,” or if the company has a corporate contract with American or is enrolled in the AAdvantage Business program.

According to American's website, the preferred travel agency status is awarded, in part, based on whether the agency is meeting specified thresholds of an increasing percentage of bookings going through American’s NDC connection. For the first iteration of the list, to be released in April, the airline is requiring agencies to have 30% of their American bookings through NDC, increasing to 50% by October 31 and 70% by April 30, 2025.

Preferred agencies must also adhere to display criteria beginning July 1.

“For an agency to be considered preferred, they must demonstrate their ability to clearly communicate to customers when they earn AAdvantage miles in the online booking tool throughout the booking flow before a purchase is finalized,” according to American's website.

The changes are part of the carrier’s ongoing strategy to boost its internet-based distribution, both by bringing customers to its direct channels and by encouraging its retailing partners to sell only through its NDC connections. During the company’s latest earnings call in late January it said 80% of bookings currently come via internet-based channels and it has a goal of reaching 100%.

In a post on LinkedIn commenting on American’s announcement, Amtrav co-founder and CEO Jeff Klee wrote, “They [American] have made it very clear that if you are an intermediary who wants to sell American tickets you're going to have to do it with modern technology that allows American to sell the products they want to sell at the prices they want to sell them at without the artificial constraints that the old communications protocols impose. That is well within American's right, they've given intermediaries ample time and warnings, and I don't think there is a shred of doubt that sooner-rather-than-later every intermediary, no matter how big they are today, will be either gone or transacting in modern ways.”

American’s announcement regarding basic economy tickets – that they will earn award points and miles only if booked directly with American or partner airlines – is even more “interesting and important,” wrote Klee.

While basic economy tickets are not generally purchased in the corporate market, Klee said he sees this news as a signal of more changes to come.

“… combined with other moves from AA like restricting accrual of AAdvantage for Business points and canceling full content agreements with GDSs (even for NDC via GDS), it's hard to believe that American is done. This will sound self-serving, but I think they're overplaying their hand with this part of the strategy. For all the good they are doing in forcing the industry to modernize, I'd bet the loss from share shift is exceeding and will continue to exceed the gain from channel shift by corporates who resent being told that they can't use their booking channel of choice.

“The NDC vs. EDIFACT debate is getting boring; its outcome is no longer in doubt. The real intrigue is around the extent to which airlines will or will not empower TMCs that do use their most modern connection options to fully serve their mutual customers. I still believe there's a grand bargain to be had where airlines, TMC, companies and travelers all benefit. But for that to be happen, TMCs will have to rethink what it means to be a good partner; buyers who don't want their travelers to use different apps for each supplier will have to make themselves heard; and airlines, quite frankly, will have to be convinced that bending the distribution system to their liking is necessary, but breaking it completely will not be in the best interest of their customers.”