Skift Take
American reported a third-quarter loss as its competitors profits nearly hit $1 billion. It still has a long road to recovery over a botched distribution strategy that has caused it to lose out on lucrative business travel.
American Airlines reported a loss of $149 million for the third quarter as it continues to deal with the fall out of its distribution strategy.
The figure is an improvement from the year before, when American had a $545 million loss. However, the carrier is trailing Delta Air Lines and United Airlines as both reported third-quarter profits of $971 million and $965 million, respectively. American had revenues of $13.6 billion.
The carrier said that it was able to quickly bounce back from the CrowdStrike outage and Hurricanes Debby and Helene.
American CEO Robert Isom said the company is working to reset its sales and distribution strategy after its previous approach received significant backlash from travel agencies and caused a decline in revenues.
“We have taken aggressive action to reset our sales and distribution strategy and re-engage the business travel community, which we’re confident will improve our revenue performance over time,” Isom said in an earnings release.
For the third quarter, American said it renegotiated contracts with a majority of the largest travel agencies and many of its top corporate customers. It is also reintroducing traveler benefits for corporate customers, along with adding more sales account managers and support staff.
American previously championed a distribution strategy that involved selling tickets directly. Travel agencies filed complaints with the Department of Transportation over the changes, arguing that it was an anti-competitive practice.
The carrier received more backlash when it said it would let customers earn frequent flyer miles only if they booked tickets with certain travel agencies.
The botched approach ultimately led to the firing of chief commercial officer Vasu Raja. Now, American has been trying to return to a more traditional distribution strategy as it seeks to benefit from the same business travel boom that has boosted Delta’s and United’s profits.
American CEO, Robert Isom is due to appear at the Skift Aviation Forum on November 12. Click here for more information and to book your ticket.
Airlines Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance.
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