Mark Pestronk
Q: In two Legal Briefs columns appearing in June 2014 ["Several important differences in AA's new agent agreement" (June 2, 2014) and "Other surprises in American Airlines' new agent agreement" (June 9, 2014)], you discussed how American Airlines’ newly revised standard agency agreement differed from the old one. You covered 10 surprises in the agreement, all of which were agent-unfriendly. Now, I see that American has published a revised agreement that becomes effective Jan. 4. Are there surprises in the new agreement?
A: At 6,283 words, the new "Addendum to the Governing Travel Agency Agreements for ARC Accredited Agents and Their Affiliates" is nearly 30% longer than the 2014 version. It is hard to believe that American expects average agency owners or managers to read it, let alone understand, remember and comply with it. The lawyer or lawyers that penned this monster is clearly ignorant of the way most agencies work. They appear to think that the agency community comprises only large corporate travel management companies and large online agencies, as those are the only ones whose practices are specifically addressed and the only ones that could comply with the new requirements.
Here are some examples:
As under the 2014 Addendum, American requires every agency to follow its "Security Requirements," which include "(i) compliance with the current Payment Card Industry Data Security Standard, and Visa, MasterCard and any other applicable credit card network bylaws and operating regulations...; (ii) encryption of all records and files that contain any personally identifiable information when Agent transmits such records ...; and (iii) compliance with any security standards required by local law or regulations."
So every agency must be knowledgeable about and compliant with all such laws, regulations, bylaws and standards. But there's more: Now, the Addendum requires every agency to "certify [to American] that [its] employees, agents and contractors have not experienced any circumstances or events that are inconsistent with the Security Requirements during the last 24 months."
Can you rely on your GDS vendor to keep you compliant, and can you blame your vendor if there are leaks? Absolutely not: "To the extent that Agent engages ...services vendors or other third-party contractors to support Agent's activities within the scope of the Appointment, Agent will be responsible to American for their full compliance with the Agreement."
A major, new prohibition is what American calls "Sales Location Shifting" and defines as "making a booking or issuing a ticket from a sales location that is different than the one selected by the customer to circumvent availability, commissions or other airline controls." So if your agency has locations, affiliates or networking partners in other countries, you cannot use those locations to get better fares, seats or commissions for your clients. You must always list your fees separately from the American fare. Apparently, no American lawyer knows the DOT's full-price rule, which requires that you start every quote with the full price, including your fees.
Why am I singling out American? No other airline imposes these obligations and prohibitions on every agency.
I want to thank Travel Weekly's sister publication, the Beat, for alerting me to the new addendum and for quoting travel attorney Daniel Zim's excellent analysis.