Q: One of the most troubling aspects of the airline-agency relationship is an airline's right to lift its plate from the agency for any reason, or no reason. ARC allows any airline to do so, and as far as I know, the agency has no legal right to dispute the decision or even any forum in which to present its side of the story. Our agency is in Atlanta, and we would be out of business tomorrow if Delta lifted our plate today. Is this absence of due process for agencies the same in all countries, or is it particular to the U.S.?
A: In 149 other countries, agencies have the legal right to appeal a decision by an airline to lift its plate; i.e., to revoke the agency's right to issue tickets on that airline. Agencies in the U.S. have no such right, and ARC should remedy this glaring injustice.
All the world's major airlines belong to IATA, which is headquartered in Montreal. The airlines govern IATA through a series of intercarrier agreements (called "resolutions"), and agencies that want to issue tickets must be appointed by IATA and must obey the resolutions that pertain to agencies.
The U.S. is the sole exception to this worldwide regime. Here, agencies need an ARC appointment to issue airline tickets, and IATA's subsidiary Iatan does almost nothing except issue ID cards to travel agents.
One of the IATA resolutions establishes the IATA Travel Agency Commissioner program, which is analogous to the travel agent arbiter program established by ARC in the U.S. There are three IATA travel agency commissioner positions: one for the Americas; one for Europe, the Middle East and Africa; and one for Asia-Pacific (currently, one person working in Vancouver holds both of the first two commissioner positions).
Like the ARC travel agent arbiter in Manassas, Va., the IATA travel agency commissioners have jurisdiction over appeals by agencies of decisions by IATA (but not Iatan) to deny applications for accreditation or decisions to terminate an agency for too many financial irregularities. However, quite unlike the ARC arbiter, the IATA commissioners also have jurisdiction over appeals by "an Agent who considers its commercial survival is threatened by an IATA Member Airline's decision preventing it from acting as Agent for, or from issuing Traffic Documents on behalf of, that Member."
In other words, any agency outside the U.S. can appeal to the IATA commissioner if its plate gets lifted by an airline, if the agency considers that its commercial survival is threatened by the airline's decision. If the IATA commissioner decides the appeal in favor of the agency, the airline is legally bound to return the plate.
ARC's new president, Mike Premo, has vowed to make ARC more agent-friendly and to try to rebuild ARC's relationship with agencies. One of the steps that ARC should take is to encourage the airline members of ARC's board of directors to adopt the IATA model discussed here. Specifically, they should expand the travel agent arbiter's jurisdiction to cover individual carrier decisions to lift an agency's plate where the agency considers that its commercial survival is threatened.
When it comes to the rights of travel agencies, the U.S. should not be the most backward country in the world.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].