I am fascinated by the
recent decisions of American, Continental, Northwest, and US
Airways to accept reservations from non-ARC agencies. Apparently
all that is required is registration to obtain an IATA number from
Travelsellers.com, the Outside Sales Support Network
or Iatan itself. Then we can make reservations in a GDS or on a
special part of the airline's Web site, and the airline issues an
e-ticket.
Why, then, do we need to maintain our ARC appointment --
with its complex and costly bonding, reporting and remitting rules
-- if most or virtually all of our sales are on these
airlines?
A: A quiet revolution appears to be taking
place in air travel distribution. You can bypass ARC and still be
an appointed sales agent of American, Continental, Northwest or US
Airways.
When ARC was set up in 1985, ARTA sued the airlines because they
were violating the antitrust law by uniformly fixing the reporting
and remitting terms by joint agreement.
The case was settled with ARC agreeing to facilitate "direct
forms of payment" (DFOP) arrangements.
DFOPs were a flop, and for 15 years after the settlement
virtually no appointed agency reported and remitted outside ARC.
Now, all of a sudden, direct relationships have bloomed thanks to
the Internet, and you legitimately can ask why you even need an ARC
appointment.
What can ARC agencies do that these new-numbered agencies cannot
do? The ARC regulars can issue paper tickets, make changes, make
refunds and void tickets. The others can't.
However, if you do not issue airline tickets in great volume, it
probably doesn't matter if you can do any of these things, as you
can call the airline and have it done for you.
The most valuable difference is voiding, and it is most ironic
that ARC's proposal to require daily reporting would eliminate this
advantage.
If your agency is located in a large hub city such as
Pittsburgh, the four airlines account for about 90% of market
share. Is it worth it to retain your ARC appointment to be able to
issue tickets on the other airlines?
Only you can decide, but I predict that if more airlines allow
agencies to bypass ARC, many more agencies will give up their
appointments.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law. He answers your questions in the TravelWeekly.com
Legal Ease forum. To contact Mark directly, e-mail him at [email protected].