American Airlines backtracks on major change to earning air miles

The proposed change to loyalty points was due to come into force on July 11 READ MORE: Here's how to get a full refund for a delayed or cancelled flight

American Airlines has backtracked on a controversial decision which would have made it much harder to collect air miles.

Earlier this year, the airline said it would start limiting which tickets purchased through a third parties - such as travel agents or online booking sites - were eligible to earn AAdvantage miles and loyalty points.

It would have been the first carrier to make the move, pushing customers to buy tickets directly from its own website - saving it in commission fees for other sites.

Such a move would block flyers from earning points when booked with many third-party travel sites, which can be cheaper.

Experts feared it would open the door to Delta and United to follow suit. Airlines often copy cost-saving measures.

But - in good news for travelers - American Airlines has dropped the idea, which was due to come into force on July 11. It also means rivals will likely now ditch any plans they might have had after seeing the backlash.

American Airlines has backtracked on a controversial decision which would have made it more difficult for customers to collect miles and loyalty points

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American Airlines did not want to create 'confusion and disruption' for customers, CEO Robert Isom said, but the carrier had also faced pressure from travel agencies.

'Next month, we were going to differentiate who earned AAdvantage Miles and who didn't, based on where they booked. That's off,' Isom told investors at a conference earlier this month.

'We're not doing that because it would create confusion and disruption for our end customer, and we’re going to make sure that we take care. We're listening to feedback.'

The plan was to have customers only receive rewards points if they booked directly through the airline, or through select partners and 'preferred agencies.'

This would have cut back on the commission the airline would have to pay out to outside agencies.

Travel agencies which did not receive the airline's stamp of approval faced the prospect of losing scores of customers who would usually buy American Airlines flights through them.

Zane Kerby, president and CEO of the American Society of Travel Advisors, had fought back against the proposed policy, and applauded the reversal, travel industry site Skift reported.

'I'm grateful for American Airlines' renewed recognition of the essential role that travel advisors play in facilitating air travel for our shared customers,' Kerby said.

'I want to extend my thanks to American Airlines CEO Robert Isom for acknowledging its previous approach was flawed.

'Reversing the decision to withhold AAdvantage points and miles for agency bookings is a testament to the firm position that travel agencies hold in the airline distribution channel.'

The planned change was initially due to take place on May 1, but the airline pushed the deadline back two months.

'American Airlines wants to cut out the middleman,' The Points Guy Managing Editor Clint Henderson told DailyMail.com when the carrier announced the planned change in February.

'The airline has been pulling away from third-party booking sites for some time, but they are now taking more extreme measures.

'American is working on the theory that they don't need outside salespeople like travel agents anymore. They don't want to have to offer discounts or give commissions to another company and they think they may be able to get that business on their own.'

The change could also have affected those who like to redeem transferable credit card points through booking with American Express, Chase or Capital One, if they had not been among the airline's list of 'preferred agencies.'

Henderson added that the move would mean American could make more money as it would be able to upsell customers on other products such as early boarding, better coach seats or even first class seats if they have to book directly.

The airline has backtracked on a plan to limit the air miles and loyalty points customers could earn when booking through third-party agencies

American Airlines did not want to create 'confusion and disruption' for customers, CEO Robert Isom said, but the carrier had also faced pressure from travel agencies

However he pointed out potential flaws in the strategy at the time.

'There's a big downside risk for American here too, though,' he said.

'It could be kicking itself in the foot with some companies refusing to play by the new rules and taking business elsewhere.'

It comes after Delta Air Lines was also forced to make a U-turn on a controversial decision to clamp down on its reward program and access to airport lounges last year.

The carrier sparked a major backlash in September when it announced plans to cap the number of entries to its lounges and tighten the qualifying criteria for customers to earn frequent flyer status.

CEO Ed Bastian admitted the airline 'went too far' with the proposed changes.