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American elevates corporate customers during disruptions

American Airlines has modified a controversial change to how it re-accommodates passengers during irregular operations, bumping all passengers with corporate contracts up to the level of elite fliers.

The Fort Worth-based carrier will treat those who do not have status but flying on tickets booked under corporate contracts as if they are the in gold or platinum tiers of its frequent flier programme, says John Tingle, regional sales director for the US Southeast at American, at the FlightGlobal Data: Corporate Traveler Experience conference in Atlanta today.

Conference attendees, many of whom manage corporate travel programmes, clapped at his comments, which comes just over a month since a controversial change to how it prioritises travellers impacted by flight disruptions.

In September, American set a policy for how it re-accommodates passengers, giving priority to top tier frequent fliers and those booked in premium cabins, and taking options away from economy passengers with no status. The programme implemented a rule that economy travellers with no status could only be rebooked on another American flight, creating the potential for passengers to face long waits for another flight.

Exceptions included unaccompanied minors and customers with disabilities.

Blogger Brett Snyder, in an October post, called the policy a reminder to "the casual traveler how unimportant they are".

The changes for corporates, while important for that segment of the market, will not make a difference to the "casual traveler" that Snyder mentions.

Corporate travellers are an important, if not critical, source of revenue for airlines. Executives regularly speak to, and Wall Street analysts ask of, corporate demand during quarterly financial updates.

Robert Isom, president of American, said in October that corporate revenue grew at a faster rate than top-line revenue year-on-year in the third quarter. Operating revenues were up 5.4% to $10.9 billion during the period.

"It's broad strength across… corporates led by professional services," he said in response to analyst questions. "We've got a healthy pipeline of new accounts. 450 new managed corporate accounts signed just this past quarter and a lot of enhancements coming."

Isom's comments come as American has lagged competitors Delta Air Lines and United Airlines in financial returns in 2018. Executives promise "outperformance" on multiple revenue initiatives that will close that gap next year.

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