The Rocky Road to Daily Reporting

With ARC’s proposed settlement plans, agencies will need to spend more time and expense processing and submitting daily air sales reports. Apparently, the agency community as a whole is being penalized by unethical agents who submit fraudulent voids.

And agents though not surprised that these moves were made because of all the hoopla ARC displayed with its push for IAR Interactive Plus electronic reporting were obviously angry.

The reason for the move, according to ARC President David Collins, was due to the “prolonged crisis in the airline industry.” The airlines, Collins said, need daily reporting to more effectively monitor their sales, which is done in most other industries. Under the current weekly reporting requirement, up to two weeks can pass before carriers receive sales data.

“In this day and age, you need data on your desk the following day on what went on the day before,” he said.

Collins added: “Although we have truthfully said on a number of occasions in the past that we had no plans for instituting daily reporting, that situation has now changed. ...

“We will not be talking about daily remittance, although we will be looking at the current disparity between the billing of credit transactions daily and the settlement of cash transactions 10 to 17 days later.”

ASTA President Richard Copland denounced ARC’s move as “antiagent and anticonsumer.” He said that when ARC first announced the Interactive Plus system, the association was the only group to come out against the plan.

“ASTA plans to take the lead on behalf of the entire travel agency community in seeing that our united voice is heard on this issue,” Copland said.

ARTA President John Hawks said ARTA would support any responses undertaken by ASTA and agency consortiums and franchisors “so that the travel agency community can speak with a united voice on this issue.”

Hawks said that as recently as six months ago, ARC declared that daily reporting was not in the works.

“Now, we’re hearing the truth: ARC is setting the stage to require daily remittance and merchant accounts for agents to sell airline tickets,” Hawks said.

The airlines needing more transaction information on a day-to-day basis is “laughable,” Hawks said. “There’s not another industry in the country, aside from Wal Mart, perhaps, with its inventory systems, that has the same type of daily, almost up-to-the-minute reporting that they get through the CRS. It’s just a smokescreen.”

‘Shortening the Void Window’

ARC also intends to clamp down on agencies that report fraudulent voids, which cost the airlines millions of dollars each year.

“We are not going to eliminate the void capability,” Collins said. “We recognize errors take place. What we are talking about here is shortening the void window.”

Hawks responded that ARC should “take action against any agency guilty of this type of fraud rather than punishing the entire agency community.”

“It’s clear that a principal objective of daily reporting is to remove the ability of travel agents to void tickets issued with the current reporting period,” said Rees Williams of Carlson Wagonlit Travel in Sacramento. “This has been an added value that travel agents could offer clients. It’s true that, under the present situation, restricted tickets issued to a client who has to change his travel date could be voided and tickets for the new date issued without the $100 change fee.

“Travel agents can do this, and surely the airlines would like to stop this practice.”

David de L’Arbre of American Express/Santa Barbara Travel Bureau said the proposed reporting changes “will place an unfair burden on travel agencies to have full time staff available to fulfill the new requirements.

“ARC reporting already consumes a disproportionate amount of staff time based upon the revenue earned from the sale of airline tickets. ARC is now forcing agencies to make a bad situation worse in order to help suppliers that have abused us for years.”

David Toller of Enterprise Travel in Scottsdale added: “You’re now talking about multiplying my bookkeeping expenses by five times.”

Hawks said the critical first step has been taken.

“We see it as the next step to going daily remittance,” he said. “And then, after that, we feel the carriers will try to shift the merchant account status back to us.”

Meanwhile, Collins said that before the changes are made, a “dialog [is] being launched” and will take place through the Joint Advisory Board-Agent Reporting Agreement and the Travel Agent Working Group. Jerry Chandler contributed to this report.