In travel news for September 19, 2023 we talk about American Airlines eliminating their corporate sales division.
American Airlines has announced a significant restructuring of its corporate sales division. The move comes as the airline aims to adapt to the slow recovery of corporate travel compared to other segments.
Streamlining Corporate and Agency Sales
The airline's corporate sales division will be absorbed into other operational sectors of the company. According to an official statement, the focus will be on "performing the core functions of agency relationships and managed corporate sales." This change is part of a broader strategic initiative launched earlier this year, aimed at increasing direct and New Distribution Capability (NDC) sales while reducing sales through legacy Global Distribution Systems (GDS).
Fare Offerings and NDC Channels
Earlier this year, American made the decision to make a majority of its fare offerings available only through direct and New Distribution Capability channels. As a result, 56% of bookings now offer cheaper fares via New Distribution Capability compared to legacy technology, as reported by corporate travel agency AmTrav.
Implications for Business Travelers
The restructuring may impact how Business Travel is managed and booked, with a potential emphasis on direct bookings and a de-emphasis on travel agencies. The changes reflect the airline's perspective that customer behavior in the corporate travel segment is evolving, requiring more direct engagement from airlines.
Industry Analyst's View
Despite the airline's description of the move as a "streamlining," industry analysts suggest that the reorganization essentially decentralizes the sales team, indicating that American may not place significant value on its travel partners and agents.
Impact on Travel Advisors and Client Advocacy
The reorganization of American Airlines' corporate sales division has profound implications for travel agents, especially those dealing with corporate clients. By folding sales functions into broader operational sectors and pushing for more direct and New Distribution Capability sales, American Airlines seems to be moving away from traditional Global Distribution Systems that travel advisors commonly use. This shift could make it more challenging for travel advisors to intervene on behalf of their clients, both in terms of booking flexibility and in negotiating corporate travel deals. Travel advisors may need to navigate new channels for bookings and customer service, potentially complicating their role as advocates for their corporate clients.
Final Thoughts
the substantial reorganization within American Airlines corporate sales division signals a notable shift in the airline's business strategy, with potentially far-reaching effects for the world of corporate travel. As the airline streamlines its sales functions and prioritizes more direct and New Distribution Capability channels, it will necessitate changes in how travel advisors manage client relations and bookings. This could make it more difficult for travel advisors, particularly those dealing with corporate accounts, to act as effective intermediaries and advocates for their clients. The restructuring also raises questions about the future of Business Travel, as American Airlines acknowledges changing customer behaviors and a slower recovery rate for corporate travel compared to other customer segments. All of this suggests that travel advisors, corporate travelers, and other stakeholders should closely monitor these changes and adapt their strategies accordingly.
