A little-known element of American Airlines’ strategy could be the most consequential moving forward. Some 20 years ago, airlines stopped paying commissions to travel agencies on air tickets. This thoroughly disrupted the travel agency community, and it still has never really recovered; many agencies have moved to a service fee-based model instead of relying solely on commissions or overrides, but the damage helped essentially gut the industry in the U.S.
Under American Airlines’ new distribution program, however, agencies placing a booking directly or through an intermediary using New Distribution Capability level three will receive a $2 payment per segment. This nominally represents the return of a commission model to agency air sales.