Mark Pestronk
Q: For many years, our agency has obtained airline tickets from a larger agency. The latter has an ARC appointment, which enables it to issue tickets and obtain commissions on some airlines. We have always assumed that we could not qualify to get our own ARC appointment, but we have never actually looked into what it requires. How much does it cost to apply? Can you briefly explain the requirements, and can we get an appointment if we are entirely home-based?
A: ARC charges a nonrefundable application fee of $2,300. You can be approved if your business meets the following requirements:
• Everyone who: a) is involved in the day-to-day operations of the agency and b) has access to the agency’s money from ticket sales must currently reside in the U.S. and be a U.S. citizen, a U.S. national or an alien authorized to work in the U.S.
• The agency must be legally authorized and registered to do business under state and local requirements.
• The agency must have the licenses required by the jurisdiction in which it is located. Required licenses include business licenses, seller of travel law registrations where required and authorization to use its legal name and any “doing business as” names.
• The agency’s name must not be the same as or misleadingly similar to a carrier’s name and must not use the words or “ARC” or “Airline(s).” Websites and communications prohibit statements or images implying carrier affiliations.
• The agency must have a manager who is either the sole proprietor or a full-time employee of the agency and is responsible for the operations of the agency. Note that this is the only person who must be an employee (or the proprietor in the case of a sole proprietorship); everyone else can be an independent contractor;
• The agency must have an ARC Specialist who has passed the ARC Specialist examination, although you can take the exam while the ARC application is pending. This can be the same person as the manager.
• The agency must: a) post a $20,000 surety bond, b) a $20,000 irrevocable bank letter of credit or c) make a $20,000 cash deposit for ARC to hold. ARC will draw the money if you default in paying for airline tickets.
• No owner, officer, director or employee of the agency may have had an affiliation with: a) an agency previously removed from the ARC list for default or b) an agency currently in default to ARC.
• No owner, officer, director or employee may have had a felony conviction or misdemeanor related to financial activities or computer fraud or been found to have committed a breach of fiduciary duty involving the use of funds of others. (The requirements in both of these last two can be waived in certain circumstances.)
Years ago, ARC also required that the agency had to have an office that was accessible to the public and had the signage of a travel agency, but those requirements have been dropped. So, you can get an ARC appointment and still be entirely home-based if you have any required business license to operate in your home.