Mark Pestronk
Q: We have been approached by an agency whose ARC appointment has been terminated by ARC for financial default. The terminated agency wants to send reservation records to us for ticketing. Leaving aside for the moment important questions of whether we can trust the terminated agency, aren't we prohibited by ARC rules from issuing such tickets?
We have also recently been approached by another agency that has an ARC appointment in good standing but whose right to issue tickets on a major carrier has been terminated by that carrier. Aren't we prohibited by ARC or the carrier's rules from issuing tickets on that carrier for that agency?
A: ARC's standard agreement -- called the Agent Reporting Agreement (ARA) -- used to have a clause that prohibited an appointed agency from selling tickets for a nonappointed agency. The same clause also prohibited an appointed agency from issuing tickets for another agency, even an ARC-appointed one, that had its ticketing authority withdrawn.
Perhaps recognizing that such prohibitions raised antitrust law concerns about group boycotts, the ARA dropped the clause in its major revisions to the ARA a dozen years ago. Today there no relevant prohibitions, so ARC allows you to ticket for a nonappointed agency or an agency that lacks a carrier's appointment.
However, separately from ARC's rules, every carrier has the right to decide which agencies it will appoint and which it will not. Further, a carrier may condition its appointment on your compliance with the carrier's own rules.
As far as I know, the only carrier with an extensive set of rules for agencies is American Airlines, which makes every ARC agency agree to its 9,500-word Addendum to Governing Travel Agency Agreements. The addendum is actually a separate agreement between American and each agency.
Section 7 of the American addendum, titled Abusive Practices, states: "Agent agrees not to facilitate or enable the promotion, sourcing, servicing or booking of American products and services by third parties who are not authorized American agents because of suspension or termination, including through the use of pseudo city codes used by or lent to or set up for such a third party, unless expressly authorized to do so by American."
So you can't "facilitate" booking by an agency that has lost its American Airlines appointment. If American finds that you have done so, you could lose your right to issue tickets on that airline.
Individual airline appointments of agencies are unilateral agency appointments, which means that the carrier can withdraw its appointment for any reason, or no reason, at any time. Therefore, even if a carrier has no formal addendum like American does, it can still terminate your authority to issue tickets if it finds that you are ticketing for another agency that is not authorized to issue tickets on that carrier.
If you operate a host agency or simply issue tickets for other agencies on a particular carrier, you should be wary of ticketing for hostees or other agencies that you know or suspect have lost their authority to ticket on that carrier.