ARC has established the Settlement Council, a group of industry stakeholders dedicated to understanding the impact of airline distribution strategies on its members. It consists of representatives from airlines, agencies and technology providers.
In addition to discussing airline distribution strategies, the Settlement Council has also been tasked with identifying upgrades needed within ARC's systems for a more flexible settlement process.
"Over the last several years ... as we go out and we talk to our customers, we've been finding that the distribution landscape in the industry is changing," said Doug Mangold, ARC's vice president of product.
ARC has particularly been getting more questions as IATA's New Distribution Capability (NDC) matures, Mangold said.
"We're getting lots of questions and lots of feedback about how airlines would like to change how they're interacting, how their products are distributed through the agency channel," he said. "ARC, being an important part of the agency distribution channel through our settlement program, is very interested in understanding and adapting to the new world."
Shelly Younger, ARC's manager of settlement services, said the landscape is changing from NDC to direct connect models to carriers using tools outside the GDSs to distribute products like ancillaries.
NDC, IATA's XML-based standard that will enable airlines to personalize offers and sell all products, including ancillaries, through agencies, was one of the main topics discussed during the Settlement Council's first meeting.
"Each carrier has a little different flavor of how they're using NDC or where they're moving with their distribution strategy," Mangold said. "The agencies have to understand what each one's doing, and if they're different, how does that relate back into their processes."
Discussion at the meeting surrounded different distribution methods and their potential impact on agencies, he said. Those present included major domestic and international carriers as well as the main OTAs and TMCs.
Younger said considering the current era of "evolving distribution," the Settlement Council discussed the most important steps ARC could take for its systems to help process NDC transactions. The council also discussed how ARC could help agencies navigate NDC, and what impact they might see.
As a result of the meeting, ARC is planning on making some changes. Mangold declined to discuss details because a firm implementation timeline has yet to be finalized, but said, "really, it's about how can ARC provide some additional flexibility in our processing that we don't currently provide today."
ARC will continue to work with the council on identifying improvements for its systems. The company is uniquely positioned to bring together stakeholders from various sectors, Mangold said, as it has in the past with groups like its Debit Memo Working Group.
"We felt that creating a Settlement Council, where we brought the parties together, would be very helpful not only for ARC to understand how to evolve its strategy, but also to provide the parties an opportunity to talk to each other about what their plans are or what they're hearing around NDC and other distribution items," he said.
A fixed meeting schedule for the council has not yet been set.
The introduction of the council was seen as a positive within the agency community. Jennifer Wilson-Buttigieg, co-owner and co-president of Valerie Wilson Travel in New York, said it is clear that airlines are moving forward with NDC, "but many other aspects of the business have yet to keep pace."
As an example, she said, it remains unclear how data from NDC bookings can be captured into an agency's back office.
"ARC's role has always been to facilitate the connection between the agency community and the airlines; if it is to remain relevant — and if these coordination and integration issues are to be solved in a way that addresses the needs of the many constituents — ARC needs to come to the table and lead," Wilson-Buttigieg said. "This Settlement Council is hopefully the first step. We welcome this development."