As the merger of their parent airlines wraps up, the US Airways Vacations name will be going away, but the vacation packager’s agent-friendly culture and policies have migrated with it to bring better commissions and improved agent booking options to an American Airlines Vacations that was not known for strong agent relations in the past.
“There’s a lot of history, and now I would say a lot of myths about what American Airlines Vacations is for the travel agency community,” said Michael Schmeltzer, who has served as president of American Airlines Vacations since January 2014, when the carriers’ integration process got underway. “And we need to really change that view out there, because with the merger, we’ve been able to bring a lot of travel agency-friendly approaches to the American Airlines Vacations model.”
On May 1, US Airways Vacations will no longer take bookings; all new bookings will go through American Airlines Vacations. The American Airlines Vacations brand is owned by parent company American Airlines, which completed a merger with US Airways in December 2013. US Airways Vacations will remain in place through the remainder of 2015 only to carry out any existing bookings in the system.
As American Airlines Vacations takes over as the packager representing the merged entities, there will be some components of the business that are the same or similar to the way business was being done there before, but some aspects of the business, particularly with regard to agents, will be decidedly different.
Whereas the US Airways Vacations brand was handled almost entirely in-house, with in-house reservations, sales and product teams, American Airlines Vacations outsourced much of its operations. The merged vacation brands will use American Airlines Vacations’ technology provider, Switchfly, to continue to operate the booking engine American Airlines Vacations had been using, which works with Sabre.
Among other features, that booking technology includes the option for passengers to pay for part or all of their vacation package using frequent flyer miles, a feature US Airways Vacations’ system didn’t support. The American Airlines Vacations system also includes a tool that enables agents to add their own service fees, something else US Airways Vacations didn’t have
But what US Airways Vacations did have, and American Airlines Vacations lacked until last December, was competitive commissions. Previously, American Airlines Vacations offered no commission on air, and below-market commissions on land products. While Schmeltzer would not divulge how much the company is currently paying in commission, he said that the packager now pays at or above the market rates on both air and land.
Another change is that American Airlines Vacations has switched to more flexible booking options for agents. So, for example, rather than pay the standard airline-issued fee of $200 each time a client needs to change a flight, agents booking American Airlines Vacations will only have a $50 change fee on any changes made up to 15 days before travel. After that, it will revert to the airline’s rules of $200, Schmeltzer said.
On the payment side, agents’ clients can now make a deposit and then make as many payments as they want up to 45 days before travel, when final payment is due. The old American Airlines Vacations policy was to pay in full at the time of booking. The updated booking policies were borrowed from the US Airways playbook, and they only apply to agent bookings, not to consumer-direct bookings.
Schmeltzer said the combined operations didn’t require any significant staff reductions. He noted that although the packager went with the American Airlines Vacations third-party booking provider, because of the stronger agent outreach, it needed to keep knowledgeable sales and reservations staffers on the team, most of whom hailed from the US Airways roster. In fact, Schmeltzer himself came from US Airways, where he served as managing director for global passenger sales.
Starting this month, American Airlines Vacations will tout its more agent-friendly message during nine agent events it will host in seven cities across the U.S. Agents will also hear about new incentive programs, such as offering frequent flyer mileage for bookings.
As the integration of the two vacation packagers’ product and functionality continues in the coming weeks and months, Schmeltzer admitted that there could be some technology glitches along the way and that American Airlines Vacations isn’t entirely where it needs to be yet. But, he added, one thing that is solidly in place is the new American Airlines Vacations commitment to the agent channel
“The agency community drives a significant volume,” he said. “There’s a myth out there that travel agents are dwindling, particularly the small agents. I think that has flattened out. We understand what the world of travel agents can produce, and it’s very significant, particularly for international travel.”