ARC's proposed fee structure, which would have placed a larger financial burden on travel agents, was ruled as unfair by the Independent Arbitration Panel.
The arbitration panel ruled in favor of agency groups ASTA, Carlson Travel Network Associates and Uniglobe USA, saying the proposed 2008 fees don’t fairly allocate costs between airlines and travel agencies. As a result of the decision, ARC will cancel the previously scheduled July 24 collection of additional fees under the proposed plan.
"Today’s ruling shows that David can bring down Goliath when you have right on your side," said Cheryl Hudak, ASTA president. “This is a tremendous victory, not just for ASTA but for travel agents across the country."
Last December, ARC’s board of directors approved an increase of the annual administrative fee from $145 to $395 for single-office travel agencies and headquarters locations; an increase of the branch-office fee from $145 to $150; and a transaction-fee increase from 1.7 cents to 2 cents (with the fee ceiling rising from 1.5 million to 1.9 million transactions per year).
In January, ASTA filed papers to the arbitration panel, addressing the merits of the case. In February, ASTA served ARC with requests for discovery, asking that it disclose internal finances and the cost of its programs. The case was heard by the arbitrationn panel on June 7 and 8.
The panel’s decision will require a recalculation of the 2008 fee structure, which will be released once the recalculations are completed, ARC said. ARC added it will issue refunds to agencies and adjust agency collections accordingly.
“Naturally, we are respectful of the panel’s authority, but at the same time disappointed by their decision,” said ARC President David Collins. We sincerely believe that ARC and our accredited agencies must do all we can to make the travel agency channel more cost-competitive with other distribution options available to suppliers, and that this decision seriously hampers our ability to do so. In light of the economic environment that airlines in particular face, this decision is even more impactful.”