ASTA applauds ARC initiative

ASTA applauds 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. The 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. 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 conducted a complete analysis of the agreement and proposed many changes, 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 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. The new agreement was approved by ARC’s Joint Advisory Board in early May and is scheduled to be reviewed by ARC’s board in early June. The agreement is effective January 2013.

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