We are pleased to report that ARC's board of directors has signed off on some historic changes to the Agent Reporting Agreement and Industry Agents' Handbook. These documents were, as we have noted in this space, overdue for a rewrite.
A key feature of the new contract for agents is a shortened remitting cycle that reduces the float on cash sales, which means that the airlines will get their money faster. One would think that the airlines would be eager to put such a reform into effect as soon as possible.
Somewhat to our surprise, however, the airlines on ARC's board didn't do that. Instead of the initial target date of Jan. 1, 2013, ARC's board voted push the date back to July 1, more than a year from now. Why?
According to ARC, airlines need that much time to reprogram their revenue management, sales management and other data systems to reflect the new regime.
There's a lot about airline IT systems that we don't understand, but still, a year seems like a long time. There are several conclusions we could draw from this:
A: Matter of fact: It is what it is.
B: Optimistic/financial: The airlines are serious about this effort and want to take the time to do it right because an important segment of their business is at stake.
C: Pessimistic/technological: Airline IT systems vary so widely, and make use of so much legacy technology, that even a year might not be enough.
D: Conspiratorial: The carriers know that agents will be better off with these reforms, so they're putting a low priority on getting it done in a hurry.
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We're opting for A, B and C, but not D. It does appear that the airlines are serious about doing this right, but it also seems that the sorry state of airline IT systems is increasingly being cited as a reason why some things can't happen or can't happen quickly.
Late last year, for example, a dozen airlines and airline organizations descended upon the Transportation Department and begged it to delay aspects of its new consumer regulations, on the grounds that airline IT systems were incapable of accommodating the new rules without thousands of hours of reprogramming.
The DOT was treated to the spectacle of airlines sending in sworn affidavits attesting to the infirmities of their legacy systems, including dumb terminals that lack Internet access and messaging systems that rely on Teletype.
Airline information systems are among the most complex systems in the world. Leaving aside maintenance and crew schedules and other operational details, they must manage dynamic inventories of flights, seats and prices for real-time access by thousands of customer contact points around the world, using multiple interfaces, languages and currencies.
And yet they are so fragile and finicky that changes to a government regulation or a master agency contract require a year of programming. As we used to say in the old days, that does not compute.
For a long time we have suffered with an underperforming airline industry, laying the blame on too much competition, too little competition, fuel costs, labor costs, distribution costs, inflexible GDSs, government interference, incompetent managers, fickle consumers, the weather and fate.
Must we add to this list an IT environment that is becoming a source of friction and drag on the rest of the travel business?