ASTA has applauded the Airlines Reporting Corp. (ARC) for consulting with ASTA and the agency community during its first overhaul of the Agent Reporting Agreement (ARA) since it was introduced in 1984. If approved, the new agreement will be effective January 2013.
The Agent Reporting Agreement (ARA), which is a three-party agreement between the travel agent, ARC and the airlines, is the document that authorizes a travel agent to issue airline tickets on behalf of the airlines.
The new agreement is designed to be more user-friendly and is based on the “plain English” approach to contract writing, ASTA noted.
ARC consulted ASTA in late 2011 about its desire to rewrite the agreement and in early April provided ASTA with a draft of the proposed agreement. ASTA in turn conducted a complete analysis of the new agreement.
As a result of this review, ASTA said it proposed many changes to ARC, almost all of which were accepted, including language that will prevent the use of the ARC settlement system to draft agent accounts without their consent (formerly known as Payment Express).
ARC was responsive to many of the other issues raised by ASTA, especially with regard to questions posed by the new Associate Branch Concept, which allows an agency to add a branch location that is not fully owned by the home office.
ASTA said it is pleased that the proposed agreement represents no change to the current Financial Requirements (Bond, Letter of Credit or Cash Deposit) for existing travel agency location types.
"To help reduce the airlines’ risk, which in turn allowed ARC to keep the financial requirements as is, the new agreement compresses the bank draft date from 10 days to five days after the close of the sales report period. While this change will provide the airlines with access to cash funds five days earlier, it will also provide travel agencies that participate in ARC’s service fee program and/or receive compensation from the carriers with access to their cash funds five days earlier."
"When consulting with members about this proposed change, 65 percent indicated that the draft date change will have either a positive impact or no impact on their businesses. Agents negatively impacted by the change will have six months to adjust business processes, which may include moving cash customers to credit. ARC made no change to the current 7-day reporting period and no change to the current void window, " ASTA reports.
The new agreement was approved by ARC’s Joint Advisory Board (JAB) in early May and is scheduled to be reviewed by ARC’s board in early June. The new agreement is effective January 2013.
ASTA members will have access to a white paper on ASTA.org outlining the new agreement and changes to the Industry Agents’ Handbook. ASTA will also offer a webinar this summer that will further explain the nuances of the new agreement, ASTA said.