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I read this blogpost titled American Airlines Will Stop Awarding Frequent Flyer Miles and Loyalty Points to Passengers Who Don’t Book Direct. It makes me wonder: why would an airline stop awarding frequent flyer miles and loyalty points to passengers who don’t book tickets directly with them?

I thought that the airlines would be happy to collect their customers' money without caring about through which channel it got the money. The blogpost provides this quoted explanation:

“Not only does booking directly with American provide the best possible experience, it’s also where we offer the best fares and it’s most rewarding for our AAdvantage members.”

But it's rather vague and partly incorrect (e.g., "best possible experience" is quite subjective and nothing prevent a good travel agent from making the experience better, e.g by booking faster for their regular clients). This makes me wonder if there's another explanation that is not in that quote.

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Recently, some US airlines, and especially AA, have been at war with the travel agencies. They already removed lots of (the cheapest) fares from the channels accessible to them, for example.

The reasoning put forward at the time is that AA has cheaper fares, but wants to sell all sorts of add-ons to those fares, and the travel agents and/or global distribution systems (GDS) in-between are not (all?) equipped to deal with that.

So they don't get the full revenue they want on those cheaper fares, and they're not interested in selling those fares without the add-ons.

This may be another way to move customers away from those channels and increase the chances of selling those add-ons and get more revenue.

Apparently until now the results have been quite positive, and they consistently get a better return by blocking some sales via travel agents and selling directly (sometimes better than they expected), so it looks like they will go on doing that (and others are looking, seeing that it works, and following suit).

But that may be pushing things a bit too far. It will be interesting to see how the travel agents react.

See also the war between Ryanair and travel agents. There are probably a few common reasons.

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I thought that the airlines would be happy to collect their customers' money without caring about through which channel it got the money.

Obviously they'd prefer to collect all of their customers' money rather than giving some third-party travel agent a slice.

But why wouldn't AA sell tickets to travel agents at the same price as the tickets they sell directly to their customers in that case?

That makes the ticket more expensive for the passenger (travel agents still want to get paid, after all). Perhaps they expect that would prompt enough passengers to look elsewhere that it would leave them worse off. Removing frequent flier benefits is less likely to do that, because most people don't fly often enough to get any kind of status anyway, whereas passengers who really value frequent flyer miles/points often already have a degree of airline loyalty and are less likely to be booking via travel agents or search engines in the first place.

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  • That'd be indeed a better motivation. But why wouldn't AA sell tickets to travel agents at the same price as the tickets they sell directly to their customers in that case? Feb 21 at 14:55
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    addressed that in an edit to the answer
    – Chris H
    Feb 21 at 15:11
  • Got it, thanks! Feb 21 at 15:12
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    Actually, the current model in many places (not sure if that's worldwide or not, though) is that the price of the ticket is actually the same whatever the channel, but there is then an added commission on top.
    – jcaron
    Feb 21 at 18:08

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