ARLINGTON, Va. -- The Airlines Reporting Corp. indicated that after
the airlines cut commissions last September, quite a few travel
agents started using ARC to process service fees charged to
clients' credit cards.
ARC president David Collins said, "We saw significant activity
[in the program] in the last quarter of last year." Collins said
that a couple of agents told him the program "saved their agencies"
since the 1995 commission caps.
ARC does not reveal any data about the program, such as how many
agencies use it or the aggregate dollar amount of their fees, in
order to keep agents' proprietary information confidential.
Under the program, ARC acts as the credit card merchant for
major credit cards, processes and bills for service charges and
remits the money to agents minus a 3.5% processing fee.
Asked whether an influx of additional agents has improved the
economies of scale to the point where ARC could reduce the 3.5%,
Collins replied that he sees no change in the fee "in the
foreseeable future."