Travel agencies and TMCs have begun speaking out about a reduction in customer service from American Airlines following recent substantial cuts made by the airline to its sales organization.
“All the American people that we’ve been in contact with over the last year or two, they’re all gone. There’s nobody remaining,” said Jay Ellenby, president of Safe Harbors Business Travel in Bel Air, Md. “That’s 10 to 15 people from support to sales. Everybody.”
The result, Ellenby said, has been a sharp drop in Safe Harbor’s ability to receive everyday support from American to address standard issues for clients, such as flight cancellations, schedules changes and more.
“To get anybody of authority, it’s nonexistent,” he said in reference to reaching American support staff.
American has not offered specifics on the magnitude of the cuts to its sales team, though CEO Robert Isom did confirm during a presentation at the J.P. Morgan Industrials conference Tuesday that “to some extent we’ve made some reductions.”
Isom said that the cuts relate to a realignment of the airline’s sales force, which American announced in mid-February. And he explained that the airline is shifting its sales strategy to emphasize direct bookings.
“Right now, we see so much more direct sales growth in the last year, and sure some of that is pandemic related. But also, it’s due to how people are flying and how they want to interact with us,” the Isom said. “You can get a better itinerary today versus the past dealing directly with American because you can control more of the itinerary, you can control more of your experience by booking direct.”
AA shift in sales structure
The shift appears to have begun in January, when American announced that its head of sales, Alison Taylor, would step down Feb. 1 after 6 1/2 years with the company and that her day-to-day responsibilities were to be assumed by chief commercial officer Vasu Raja and senior vice president of global partnerships Scott Laurence. Four weeks later, the airline’s vice president of global sales Thomas Rajan announced a broader reorganization of its North American sales structure.
As part of that announcement, Rajan reported the retirement of industry veteran Jim Carter, who was managing director of the global sales department’s eastern division. Rajan also wrote that American initiated the reorganization so that it can more quickly adapt to marketplace changes. He said it will enable American to “deliver simpler solutions to intermediaries.”
Though he said nothing about staffing cuts, Rajan did note that American was evaluating its account management structure and planned to have more information in the coming weeks.
Critics say AA has been cagey
Lack of transparency from the airline is one key frustration expressed by Peter Vlitas, vice president of partner relations at Internova, who heads the agency’s air team.
But as is the case for Safe Harbor’s Ellenby, Vlitas’ larger concern is the impact that cuts are having on the ability of Internova’s thousands of mostly leisure travel advisors to service their clients. He said Internova’s two primary contacts at American were laid off.
“We received no official notice that our reps were made redundant. As of today, we still don’t know who will assist us in terms of our high-value customers,” Vlitas said.
He added that American seems to have made a bet that TMCs and leisure agencies aren’t as important to them as in the past. In contrast, he said, United and Delta continue to foster strong relationships with the agency community. American’s approach, he contends, could come back to bite the carrier when demand eventually slips from its current robust levels.
“If demand drops and there is more choice, I truly believe that without sales partners it will put American Airlines in a difficult situation on the sales side,” Vlitas said.
What’s behind AA’s moves?
In a post on his Cranky Flier blog Monday, airline industry analyst and travel advisor Brett Snyder opined that American’s decision to de-emphasize agency sales efforts has largely been a result of Raja taking over Taylor’s former responsibilities. As American has recovered from the Covid-19 crisis, Raja has made various public comments noting the decline of managed corporate travel coupled with increases in unmanaged business travel and blended business and leisure travel.
“Those blended trips in the system are coming in at yields that are at 75% to 85% of what were true business-only trips, but they are coming through lower cost-of-sale channels and off of negotiated discounts, so the net yields of them are very often the best things in the system,” Raja said in one pointed remark last April.
Snyder predicted that if this current strategy fails, American will attempt a rapprochement with the agency community. But if it succeeds, Delta and United will follow along.
Staff cuts are just one point of contention at present between the travel advisor community and American. The other is American’s plan to eliminate access to 40% of its fares on April 1 for travel agencies that haven’t enabled NDC connections. While American says that it will be ready by that date to support NDC bookings in Sabre, Amadeus and Travelport, the agency community contends that more technological work remains to be done, especially regarding ticket servicing and some more complicated bookings, such as those involving children.
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