American Society of Travel Advisors Cracks Down on American Airlines

Due to American Airlines’ monopolistic approach toward travel agency distribution channels, The American Society of Travel Advisors (ASTA) is following through on its promise of exploring all options to oppose its recent decision.

On the morning of May 9, The CFPB and The Department of Transportation (DOT) hosted a joint hearing on both airline and credit card rewards programs, which included DOT Secretary Pete Buttigieg, CFPB Director Rohit Chopra, President & CEO of ASTA Zane Kerby, and Jessie Klement the VP of Advocacy at ASTA.

“Emboldened by no competitive, consumer, or regulatory response, American Airlines decided that customers booking through most travel agencies won’t receive rewards miles for their flights, ” Zane Kerby Speaking to Secretary Buttigieg Said.

“We brought the underlying issue to DOT’s attention through a formal complaint last Fall that remains pending, “Kerby continued.

“The so-called criterion for becoming a preferred agency is 30 percent of bookings through NDC, and American is intentionally vague on 30 percent of what – total bookings, revenue, etc… no one knows, including our own members who have been deemed preferred, ” Jessica Klement added.

The ASTA also maintained that American Airlines’ actions should concern regulators and lawmakers because they threaten competition and consumer choice.

As of May 9, the ASTA has submitted a letter to the Federal Trade Commission (FTC) in which Chair Lina Khan speaks of American Airlines’ seemingly deliberate effort to destroy distribution competition and small travel agencies. 

“ASTA recently learned that AA requires agencies to sign an egregiously one-sided agreement as a condition of participation as a preferred agency,” the letter stated. 

“Among other things, it permits American to terminate the agency’s preferred status for any reason, or no reason at all, on thirty days’ notice. Practically speaking, the inclusion of this clause means that regardless of an agency’s achievement of the prescribed NDC booking thresholds on the measurement dates (or any other dates AA may arbitrarily choose to use instead), preferred status can be revoked at will at any time,” the letter continued.

At the moment, even though much of American Airlines’ preferred travel agency program appears to have changed little, the postponement of the program from May 1 to July 11 has been highly welcome news to many.

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