American Airlines Expands 7% Commissions To More Travel Agents — Desperate Move After Weak third Quarter?

American Airlines Expands 7% Commissions To More Travel Agents — Desperate Move After Weak third Quarter?

by Gary Leff on October 11, 2025

American Airlines is increasing incentives for journey brokers because it tries to win again third occasion reserving enterprise. That they’re doing this means to me two issues:

1. They’ve discovered paying journey brokers does steer bookings. Agents will put prospects on flights once they’re paid to take action.
2. They’re more and more deseparate for these bookings, and that their plan to win again company and company enterprise hasn’t achieved as a lot but as they’d have hoped.

American Airlines income was flat within the second quarter, a yr after formally abandoning their distribution technique that reduce on gross sales incentives and assist, and pushed companies to make use of ‘new distribution capability’ know-how that meant promoting ancillaries and never simply tickets.

Their income was flat year-over-year though they talked up billion greenback enhancements.

• American didn’t truly say company enterprise journey had grown. They mentioned oblique bookings had grown (and, presumably, direct bookings fell by the same quantity).
• And this was costing them an annualized $320 million in expense (largely commissions and GDS charges, but in addition staffing which isn’t included in that determine).

Pulling again from main enterprise markets like New York, Los Angeles, and Chicago hurts them with managed enterprise journey. They stay weak in San Francisco, Seattle, Houston, and Atlanta. They do properly, little doubt, with mid-sized Sun Belt companies.

And managed enterprise journey isn’t totally again, as Delta continued to notice in its third quarter earnings name on Thursday – and Delta appears to do one of the best on this section.

Consultants aren’t on the highway at consumer websites each week, week after week, the best way they was when shoppers could also be again in workplace however exterior of finance largely not daily or everybody on the identical day. And extra conferences are finished nearly than earlier than the pandemic.

Still, American could also be spending quite a bit however most likely isn’t getting the income contribution they anticipate due to their community. Plus they don’t have sufficient premium seats. They spent years eradicating premium seats from planes, and Delta famous throughout their earnings name that they’ve discovered they should alter schedules becaue of lack of premium seats (that premium leisure is shopping for these, typically at the next value htan corporates, in order that they haven’t been capable of accommodate corporates – whereas American doesn’t simply lack sufficient seats “up front” however sufficient additional legroom seats as properly).

So American has expanded the pool of brokers that they’ll pay commissions to on home tickets. A standard determine is 7%, even.

• The provide typically excludes the most cost effective O, Q, and N class fares
• And they’ll often pay simply 1% on flights that aren’t to competitor hubs out of Charlotte, Dallas, Miami, Philadephia and Phoenix – they seemingly anticipate that from these cities they’re going to get the enterprise anyway since they’re the dominant continuous provider. (Los Angeles, New York, Chicago and Washington DC hubs are extra aggressive in order that they’re prepared to pay commissions.)

We’ll get a reasonably good sense if I’m proper that the technique of shopping for enterprise works however hasn’t but labored properly sufficient when the airline releases its personal third quarter earnings in two weeks. They will nearly positively say the technique is working and delivering the outcomes they anticipate – however the fact might be of their income efficiency.

United CEO Scott Kirby has mentioned that if American is producing an additional $1.5 billion from their gross sales technique (as they declare) and likewise not making more cash, they should be spending and shedding that cash someplace (he says they’re shedding it at Chicago O’Hare). The fact is that based mostly on final quarter’s numbers the income itself doesn’t appear to be there. It must be within the third quarter earnings.

More From View from the Wing