ARC president and CEO Mike Premo will hang up his bow tie next year.

The ARC leader, whose old-school taste when it comes to neckwear is well-known in the travel industry, will step down at the end of 2020. COO Lauri Reishus will succeed Premo.

"I have been involved in the industry for a long time. My wife is long-suffering with my travel activities. I'm deeply in hock to her and my family, and it is time to start paying it back on that side of life," Premo, 64, told Travel Weekly. 

Mike Premo
Mike Premo

He said his retirement announcement comes more than 13 months in advance because succession planning is one of the biggest responsibilities of a CEO and a board of directors. 

Though Reishus, who has been with ARC since 2005, is already highly familiar with the business, the long transition will allow her to ease into certain aspects of corporate governance -- including dealing with the compensation committee -- that she has not been a part of to date. In addition, Reishus will be able to take over the budgeting process next year, ahead of administering that budget as CEO. 

Premo joined ARC in 2006 as vice president of business development and became CEO in 2011. During his tenure, Premo has overseen enhancements to ARC's settlement, data and reporting systems platforms, including cloud migrations. Expansion in ARC's services, data products and roster of member airlines has led to revenue growth of 44% under Premo's leadership, the company said.

Premo counts shepherding that revenue growth as among his top achievements. This year, ARC expects to record revenue of $143 million. 

But he said he is most proud of transforming the relationship between ARC and travel advisors for the better. 

"We've been able to really change the relationship with the agency community to the point where they think of us as an enabler instead of police for the airline industry," he said. "It wasn’t that long ago that ARC sent inspectors into travel agencies to make sure they had a safe of a certain size and that it was bolted to the floor. We’ve moved away from that to trying to treat agencies as the responsible businesses that they are."

Premo said that the shift has been enabled by the replacement of paper tickets with e-tickets, which gained widespread use early last decade and became mandated for IATA members in 2008. E-tickets sharply reduced the potential for fraud, Premo said. Before e-tickets, agency default levels often reached eight figures in a calendar year compared with now, when they sometimes don't even exceed five figures. 

Lauri Reishus
Lauri Reishus

One specific way in which ARC has worked to ease tensions with travel agents is by addressing debit memos. The travel industry, believes Premo, is the only one where a distributor can buy a product and only find out several months later that there is a problem. ARC established its Debit Memo Working Group, comprised of stakeholders across the airline-agent sales chain, in 2014 and standardized its first debit memo reason codes in early 2017. The total value of debit memos has dropped in recent years. 

As Premo starts the 13-month wind-down of his career, airline distribution through the agent channel has begun to diversify beyond GDSs to a broader set of solutions, including direct connects. Last July ARC decided to move forward with a transition toward omni-channel retailing support. That means that in addition to the support the organization provides for sales through the GDSs, ARC will help agencies manage direct bookings as well. 

That transition, said Premo, will take five to seven years, which is well beyond any window he could foresee for himself with ARC. As such, he said, stepping down so the company can transition to Reishus ahead of that process is sensible.

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