Are TMCs ready to accept American Airlines' olive branch?
It was one of the most prominent mea culpas to the travel trade in recent memory: American CEO Robert Isom, during the airline's Q2 earnings call, stating to analysts and investors that it needed to rebuild "positive relationships" with travel advisors.
The airline is ratcheting back from its aggressive move to focus on direct distribution and push sellers to use its NDC channels -- a failed strategy as it turned out, and one that could cost American up to $1.5 billion in revenue this year.
"We over-indexed on directs," Isom said during the call. "And we've got to find a way to play in the richer pool of indirect revenue, and that starts with having content, having positive relationships with travel management companies and agencies, and then supporting our corporate customers in ways that they feel appreciated."
If you were to call the partnership that airlines have with their TMCs and their GDS partners and their corporate clients a religion, I think Delta invented the religion and United Airlines is really working hard to find that religion. And in the immortal words of R.E.M., American Airlines was losing their religion.– Mike Cameron, Christopherson Andavo Travel
Interviews with some large TMCs in the U.S. indicated that they're cautiously optimistic about re-engagement from American.
Relationship rebuilding appears to have begun, with American representatives newly assigned to some of its larger TMC partners. And while sentiment toward the carrier is tentatively positive now that it has publicly affirmed the value of the trade, executives said they hope American can fully rebuild trust.
"We want to give them every opportunity to try to build the trust back," said Mike Cameron, CEO of Christopherson Andavo Travel in Salt Lake City (No. 28 on Travel Weekly's Power List). "I think it's going to take some time. The people that we're working with now are very nice and very engaged, and I think they're doing and saying all the right things."
Paul Glenn, CEO of Executive Travel in Lincoln, Neb. (No. 67 on the Power List), said "I think American is recognizing they need to come to the table. They've got to re-earn some trust from not just the agency community. This isn't just about the agencies, this is about the consumer. The consumer was put into an awkward position, as well, so I think that's where their energy has to be put."
And that starts with their travel advisors, he added.
"If they build trust with us again, then we're going to help them to build trust with the consumer, and then they end up where they want to be."
Isom said that American had hired new account managers for corporate customers and was working on incentive-based agreements for agencies.
Isom said those efforts had been "well received." And he specifically referenced working with American Express Global Business Travel, the largest TMC in the country and No. 3 on the Power List. "We are having good conversations with companies, including Amex GBT," he said.
Paul Abbott, Amex GBT's CEO, addressed American's strategy during the company's earnings call last week. The changes from American are "welcome," Abbott said, pointing to the restoration of content to GDSs and the airline's recognition of the trade.
"They have been clear, they recognize the importance of working collaboratively with customers and with distributors to drive the changes that they would like to see in terms of the introduction of modern retailing and NDC," Abbott said. "And frankly, we very much welcome that position from American."
Chardell Robinson, vice president of corporate sales and account management at Cadence Travel in La Jolla, Calif. (No. 46 on the Power List), pointed to a number of positives from American of late: enabling AAdvantage Business participants to once again earn points on agency bookings, returning content to the GDSs and reassigning dedicated American representatives to TMCs.
"The direct access is always beneficial," Robinson said. "Anything that we can do to bring value to our clients in that way, it's really what we're looking for. Those conversations have all started to get back into a good place."
Executive Travel has yet to be assigned a new representative. However, Glenn said he felt it was only a matter of time.
Christopherson does have a new American rep, said Cameron, who detailed an interesting history with the carrier. Before the pandemic, the TMC had physical offices in five markets: San Francisco, Salt Lake City, Denver, Detroit and Birmingham, Ala., most either Delta or United hubs.
In 2015, American approached Christopherson about winning more of its business. And up until around 2021, American made "tremendous progress," Cameron said. "They really proved how relationships, partnerships and trust -- those three things -- can come together and really move market share."
Then American essentially severed that relationship, and share returned to United and Delta.
"If you were to call the partnership that airlines have with their TMCs and their GDS partners and their corporate clients a religion, I think Delta invented the religion and United Airlines is really working hard to find that religion. And in the immortal words of R.E.M., American Airlines was losing their religion," Cameron said.
It's still easier for Christopherson to partner with Delta and United because clients remain clustered around their hubs, he added.
But he emphasized that American remains a key partner.
"They're still an important vendor to us, to our independent contractor agents and to our corporate clients, and they're trying to regain that trust back," Cameron said. "We'll see how it goes."