ARC Proposes Changes to Agent Reporting Agreement
By Kate Rice
May 07, 2012 1:05 PM
The Airlines Reporting Corp. (ARC) has rewritten the Agent Reporting Agreement (ARA) for the first time since it was introduced in 1984. The agreement is between ARC, agencies and airlines, and authorizes a travel agent to issue airline tickets on behalf of the airlines. The new agreement changes outdated policies created in the days of paper tickets that make no sense in an era of mostly electronic tickets. It’s written in plain English and is much easier to understand. The agreement has been approved by ARC’s Joint Advisory Board (JAB) and will be reviewed by ARC’s board in early June. It’s scheduled to go into effect in January.
ARC consulted all parties involved, including ASTA, which praised its consulting process and said that there are two main points in the new agreement that are important for agents. The first is a new associate branch location type for agency with branches that are not 100 percent owned by the home office. “That is a departure from the past,” said John Pittman, ASTA’s vice president of industry affairs, and agents had asked for that adaption. However, the financial requirement for running this type of location is substantially higher.
The second major change cuts the bank draft date from 10 days to five days, which is good news for the many agents who get money from ARC because they process their service fees through ARC or earn airline commissions. Sixty-five percent of ASTA members said that this change will have a positive impact or no impact. The 10-day period had originated in the days of paper tickets. The change benefits airlines because it reduces their exposure to possible losses. It could hurt agents, consolidators and tour operators who had used that 10-day period to hold reservations for agents and their customers, Pittman said.
The proposed ARA will allow an agency to move its location throughout the United States without having to change its assigned ARC number, as well as possess multiple ARC numbers at one physical location. Having a separate ARC number for different corporate accounts can help some agencies with accounting, but ARC had not allowed this because in the days when it shipped paper tickets to agency offices it feared that tickets could get mixed up, said Lauri Reishus, ARC’s vice president of operations.
She said that ARC talked to mega agencies, online travel agencies, small and mid-sized agencies, corporate travel agencies and to those who do a lot of tours or work with consolidators.
“ARC was very open and willing to engage the industry, as well as to look at both the details and the bigger-picture questions,” said Paul Ruden, ASTA’s senior vice president of legal and industry affairs.
ARC plans to conduct an extensive travel agency outreach program throughout the remainder of the year to educate the industry about the changes to the ARA. This will include resources on the ARC website, webinars, conference presentations, and personal meetings with agents.