Skift Take
From April, the airline will stop selling almost half its airfares through traditional channels, instead selling them exclusively through its own website and so-called New Distribution Capability-powered channels. The shakeup mostly impacts travel agencies and corporations that fly American for business. We explain.
With just one month to go, there’s a lot of noise about American Airlines’ decision to hold back 40 percent of its fares, mostly for business travel, for so-called New Distribution Capability-powered channels and direct channels, such as its own website.
To recap: New Distribution Capability is a technology standard developed by the International Air Transport Association. The idea is to give airlines more control over their airfares, rather than rely on global distribution systems.
Traditionally, these global distribution systems (namely Sabre, Amadeus and Travelport) act as middlemen who pass on airline information that travel agents and other retailers use to provide booking services to customers.
So What Changes?From April, American is pulling about 40 percent of its content that is transmitted by Edifact (Electronic Data Interchange for Administration, Commerce, and Transport) — a protocol that pre-dates the internet, and one that the global distribution systems use. It’s currently the main third-party distribution method used by the industry.
Content describes anything sold or offered by an airline including tickets, ancillaries like seats and bags, frequent flyer program benefits, and anything related to order management like changes or cancellations (according to tech company Duffel). This content will likely include American's cheapest fares.
Amadeus and Travelport have developed ways to handle New Distribution Capability content from American, with Sabre going live in April. They're all prepared, as American said it had signed deals with all three in October last year. They will “offer travel retailers and corporate customers the airline’s best content through New Distribution Capability connections in 2023.”
Airlines argue this method lets them offer broader access to their products and services. In American Airlines' own words: "In the past, customers who booked trave