American Airlines Shot Itself In The Foot: Will Modify Distribution Strategy
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- Опубліковано 16 чер 2024
- This deep-dive video is more focused on the back-end of managing an airline. Rather than talk about specific aircraft or cabin spaces, THIS video discusses American Airlines’ failed strategy in shifting ticket sales from one platform to another. A strategy that performed SO poorly, that it seems one of its very high-level executives has had to pack-up and leave the company…
So what is this all about?
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I can't tell you how stupid this strategy was. I worked for several years in the corporate travel planning business where we mainly did Delta tickets. We did huge amounts of business for the airline and got hefty commission overrides as a result. It seems like AA was trying to get their customers to book in an online portal of some kind to bypass these agencies. First off, large companies who book travel through agencies don't want to be bothered with this, and if they have a choice, they will throw their buying power to another major airline. This is about convenience for big corporate clients as much as it is for the agencies and not having access to 40% of fares...well that just isn't very smart. Sounds like AA was getting a little greedy and forgot who was paying the bills.
You explained everything perfectly. Thank you.
Clarification... NDC is a means of cutting the GDS (and their publishing fees) out of the equation. NDC is a IATA-defined standard, but not as embraced of a standard as GDS (Apollo, Sabre, Amadeus). Independent agents can still book via NDC, but doing so involves the expensive and frustrating process of upgrading or replacing software. Most independent agents opted for the far easier route - sending customers to a competitor airline.
our organization will only allow flying via AA when there are no other options (we don't fly cut-rate airlines).
First he killed the International Network to Europe and Asia. And then, he killed de Distributions Channels... Such a good manager.
If you're booking business travel, there's a good chance you're forced to use Concur, and also forced to choose the cheapest fare (or something close to that). If AA is the cheapest but that price doesn't show up in Concur, you'll have to fly a competitor.
Really seems like AA shot themselves in the foot with this.
Bingo. So dumb.
I am a 22-year Executive Platinum level, and Concierge Key frequent flyer with American Airlines. While this issue did not directly affect me, this is an example of the broader "...what were they thinking?" failures. The past 3-years of self-inflicted corporate wounds only goes to prove the ever increasing belief amongst American's top-tier frequent flyers: "American Airlines is a credit card company, who occasionally flys airplanes, with passengers."
I moved away from them years ago now
how on earth did you get to that level
@@S1baar - 300,000-miles plus flying each year for the last 22-years.
@@JDFloyd for work?
@@S1baar 90% of my travel has been for work.
Sometimes you try new things and it doesn’t work out so you reverse course. The idea of “cutting out the middle man” makes sense as a hypothesis, but sometimes the customer likes having a middle man.
That explains why our corporate travel agency (SATO) stopped issuing AA flights and we got placed on Southwest flights instead.
Same!
Unbelievable how much money these executives get paid to make disastrous decisions
I don’t understand why some of these corporate geniuses insist on creating new problems out of greed, or trying to solve problems that were never universally considered problems in the first place. The airline industry especially goes through cycles of taking away amenities then a decade later bringing them back as innovations
This explains so much when I was trying to book corporate travel earlier this year!!
I usually fly American, but when I went to book my travel in March for a trip to San Francisco, AA was $300 more than Delta! My company policy does not let me book more than $150 more than the lowest price ticket on the corporate travel site.
Insurance companies tried this, though they kept it in the Private Car sector, when they said they’d have cheaper deals only available on their websites direct, instead of Compare sites…
Guess what, those companies lost business and it’s less prevalent now, as they advertise the cheapest rates on the Compare sites.
The very reason corporate travel is profitable is that corporations value convenience, reliability, and cost. In that order. I've seen it said that an itinerary that cost $200 more and arrives 3 hours late every day will be preferred over a cheaper itinerary that might be on time or anywhere up to 3 hours late. This makes sense. Everyone can plan the trip efficiently.
They should be doing everything they can to enhance their relationship with the 3rd parties booking corporate travel.
This was just dumb.
I have been flying since 1983. American Airlines is horrible. They need to fire everyone and start over. Flying to 12 countries and most of the US, we only us AA when there isn't a choice.
Exactly! I fly Delta as much as I possibly can, when flying domestically. AA never was very reliable to begin with, and over the decades, has only grown worse. There's a reason, nay, many reasons why AA is the worst airline in the country. Sadly, it's the only way I can fly first class to National nonstop. I'm less than delighted. And we thought USAir was bad!
American wants to provide Sprit service and charge Delta prices. They really think they can get away with this. The old "America West" management is brainless with how to run an airline like American.
I’m almost certain when America West and AA merged, America West was doing well with management; everybody preferred them. However, American with their mediocre management, took over and that did not help the situation over the years. Just look at all their crazy decisions they’ve made over the years. Profits over customers.
As a corporate customer, our large corporation only uses Carlson Wagonlit Travel/SAP concur, it is mandatory to use as it is tied to our corporate credit cards. Now, I have never had trouble booking an American flight on CWT. So I'm not sure if AA had a deal with the big agencies and cut out smaller ones. I can just say the vibe on American is off. I hate DFW in the spring/summer delays are frequent. I have made my choice United because the Loyalty Program is the best.
What a flawed sales strategy of American Airlines. As such, the shake-up in top-level executives is inevitable.
Imagine crapping on a segment of your customers and making it harder to do business with you and having it backfire. Who couldn't see that coming?
Bad decision; bad result.
American has always been one of the more expensive options between the legacy carriers here. By and large, I’ve avoided them because of that.
That is by and large not true. Delta is always way more expensive, United is more expensive on certain routes too.
They’ve been one of the cheapest options for me 95% the time
Too many managers and too few leaders at airline companies these days.
Crandall was quite the leader at AA in the 80s, but I wouldn't want more of leaders like him.
Minor nit with your arguments: low cost carriers always start with direct sales and not available via GDS. Then they make their schedules available with GDS but not bookable and then bookable via GDS (at which point they generally cease to be a low cost carrier due since they are on equal footing with legacy carrers who have also cut on-board services to bare bones like low cost carriers.
I think AA made the bet that people would flock to their web site t get the low fares, and didn't realize that people would flock to other airlines because they didnt see AA's low fares on the booking engine of their choice.
All airlines would love to have their customers all book direct with them so airlines no longer have to pay for CRS and travel agencies/web sites like Expedia. But an airline not being in a CRS is like a TV station not sending ist shedules to TV Guide back in the 1970s and 80s which is how people found out what aired when and on what channel back then.
AA should go to AA.
Play stupid game, win stupid prize.
Another large company getting it's priorities wrong, like Boeing.
The people within most of the USA public relations and sales are woefully inadequate at their jobs.
im gonna be real, id rather fly united airlines then to fly american airlines.
no one should feel bad about this airline.
I agree that American is arguably the worst US airline given its status as a major and doesn’t deserve sympathy, but it’s just a sad sight when corporate decision making has been completely overtaken by goals of short term profit maximization, leaving innovation and future growth (which benefits everyone if this growth equitably contributes to social welfare) out of the equation. Just like Boeing, they’ve forgotten that good products are what makes good companies, and are fully invested in squeezing the most amount of money out of their industry with the least amount effort… but that’s okay, thankfully Southwest, Jet Blue, Alaska, and heck even Spirit are filling in the gaps that American are leaving. I just desire a world of smart and rational decision making; too bad most executives praise the dollar and ignore what truly matters.
1:33, anyone else see that United A350?
It’s a 787
@@vizio2003 Look closely at the engine
787-10. Nose and wings are different than A350.
American is a low cost airline at this rate.
" ...., we regret that." - Yeah, sure you regret not making more money, making less profit if any, like in this case.
Shooting yourself in the foot is an understatement, it's more shooting off their foot.
How stupid can you be? Who at AA suggested that, or better yet, who signed off on it?
Another bad ideas is American planning to take the wide bodies off the Miami LAX flights. I remember from 1990 to 1996 American grew from three daily widebody Miami to LAX nonstops to six daily widebody non-stops The flights were all as a rule were packed. I know it’s some executive from one of their various departments, who thinks of these stupid ideas.Such as going all narrow body on a Transcon flight. They should fire the guys who come up with these stupid ideas. The guys who come up with these stupid ideas should have to sit in the middle seat in coach on a narrow body Transcon …..better yet ,crossing the pond flight.
American airlines sucks. I try to avoid flying them but I had to fly them a year ago. Gate agent was rude
They shot themselves in the hooves, ordering the mad max and nightmareliner
First!
nobody cares
@@Pikakid Except you 🥹. You are the only one who bothered to comment. And now we are friends forever. I will never ever ever ever ever ever leave your side. Pinky promise 🥹🥹.
@@Pikakid It just occurred to me that you might be underage, and my comment above might sound creepy. For clarity, I meant it in jest. I genuinely mean you no harm.
What do you expect from a company headquartered in Texas?
"No water breaks allowed for ramp workers on super hot days" along with "Jail time for women who miscarriage while going between gates of a DFW connection" would fit the existing pattern.