American Airlines executives on a third quarter earnings call said the carrier’s share of corporate and agency revenue bottomed out at 11% below historic levels in the second quarter but has recovered in the last quarter to 7% below that level. Officials attributed the declines to the carrier’s now lapsed corporate distribution strategy. Robert Isom, CEO, said the airline experts to see continued improvement in the months ahead.
Executives said the prior distribution strategy cost the company $1.5 billion in revenue this year as well as corporate share and those previous moves “angered” customers.
American’s managed business revenue was up 6% year over year in the third quarter, and “we continue to see yield strength in the segment,” Isom said, adding that the carrier is tracking its recovery process by “measuring our agency and corporate booking performance, tracking the growth of our AAdvantage Business program and listening to the feedback from our agency partners and corporate customers.”
Executives said the airline aims to fully restore its revenue from indirect channels by the end of 2025.
Steve Johnson, chief strategy officer, said the company had six objectives around reversing the distribution strategy with the most important being establishing and redeveloping relationships and listening to customers.
American reported third-quarter passenger revenue of more than $12.5 billion, up 0.8% year over year, with total revenue up 1.2% for the period to more than $13.6 billion, a third-quarter record. The carrier reported a net loss of $149 million, down from the $545 million reported in the third quarter of 2023. Capacity increased 3.2% over the previous year.
Image: AA
