e can't blame ASTA for feeling a little put out after Rosenbluth International reneged on a pledge to join ASTA in bringing ARC's new fee structure before an independent arbitration panel.

As we see it, the issue all along has been the fairness of the surcharges that ARC is imposing on travel agents who report their sales using what ARC now calls the Medieval method. Agents who switch to the new electronic system, IAR Interactive Plus, get a $25 fee reduction. Agents who don't switch must pay an extra $350 in surcharges this year alone.


After joining in the arbitration case, Rosenbluth withdrew, saying it concluded that "IAR processing is in the best interest of the agency community." Maybe so, but that's not the issue that went to arbitration.

The issue is the fee structure and the cost-sharing, not the merits of IAR. Without an arbitration proceeding, ASTA will have no way to pursue its case except to go to court. We would have preferred arbitration to a lawsuit.

As ASTA noted in its brief to the arbitration panel, ARC decided that agents should pay 50% of the cost of manual processing this year and 100% in 2002 -- a "glaring departure" from the traditional split under which agents paid 10% and airlines paid 90%.

ARC likes to claim that it is merely adopting the businesslike approach of asking agents who use the manual system to bear the cost of doing so. That has a nice sound to it, but (if you say it right) so does "Step away from the vehicle." To the extent that the cost-sharing formula means some agents no longer have a choice, ASTA is right to call it coercive.

The issue is not if IAR is a good thing, or even if ARC should move all agents to the new system. Evidently it wants to do so, and maybe it should. But without recourse to arbitration, we think the industry is missing what could be its last opportunity to engineer a more equitable transition.

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