In outs of the ara carrier arc perspective
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In & Outs of the ARA Carrier & ARC Perspective. George Bartulevicz, AA Debbie Erickson, ARC. Agent Reporting Agreement - ARA. Facilitate the issuance of tickets to the public by agents of Carriers in a competitive and efficient manner. Establishes a principal-agent relationship

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In & Outs of the ARA Carrier & ARC Perspective

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In outs of the ara carrier arc perspective

In & Outs of the ARACarrier & ARC Perspective

George Bartulevicz, AA Debbie Erickson, ARC


Agent reporting agreement ara

Agent Reporting Agreement - ARA

  • Facilitate the issuance of tickets to the public by agents of Carriers in a competitive and efficient manner.

  • Establishes a principal-agent relationship

  • Does not constitute the entire agreement between the Agent and a Carrier


In outs of the ara carrier arc perspective

ARA

  • Establishes Location, Personnel, Financial, and Other qualifications for ARC-accredited agents

  • Carrier may appoint an Agent permitting the Agent to issue tickets on behalf of the Carrier

  • Sets forth the terms of weekly reporting and settlement


In outs of the ara carrier arc perspective

ARA

  • States that the Agent shall comply with all instructions of the ARA and the Industry Agents' Handbook

  • Also states that the Agent shall comply with all instructions of the Carrier

  • Sets forth the consequences of failing to

    • Meet the qualifications

    • Properly report and settle transactions

    • Follow instructions


In outs of the ara carrier arc perspective

ARA

  • Establishes a neutral venue for breaches of the ARA – Travel Agent Arbiter

  • Outlines the terms of how and when the ARA can be terminated – by either party


Arc perspective vs carrier perspective

ARC perspective vs. Carrier Perspective

  • How does ARC respond to breaches of the ARA?

  • How do carriers respond to breaches of the ARA?

  • Are the responses in conflict?

  • And do the conflicts sometimes join forces?


Breaches of the ara arc perspective

Breaches of the ARA – ARC perspective

  • Returned Drafts

  • Refunds of Flown Tickets

  • Voids taken on Flown Tickets

  • Off-plating/commission/exchange schemes

  • Use of owner’s credit card

  • Duplicate/Fake credit memos

  • Unauthorized Ownership changes

  • Material misrepresentations/inaccuracies in applications


Travel agency abuse targeting the airline industry carrier perspective

Travel Agency Abuse targeting the airline industry – Carrier Perspective

  • Tariff Abuse (i.e. false segment itineraries, etc.)

  • Violation of airline frequent flyer programs terms and conditions (i.e. buy/sale/barter of airline mileage credits and/or award tickets including upgrade awards)


In outs of the ara carrier arc perspective

Travel Agency Abuse targeting the airline industry – Carrier Perspective

  • Unauthorized use of travel agent certificates (void if sold, purchased and/or bartered) valid for free travel

  • Unauthorized use of corporate discount codes (including false corporate discount codes)


In outs of the ara carrier arc perspective

ABC Travel

What did they do?

  • Sold tickets utilizing false segment itineraries;

  • Issued economy/business class tickets, upgraded them with frequent flyer upgrade awards and sold them as business/first class tickets;


In outs of the ara carrier arc perspective

What did they do?

Sold frequent flyer award tickets (business & first) as business/first class tickets;

Discountedbusiness/first class ticketswith unauthorized use corporate discount codes;


In outs of the ara carrier arc perspective

What did they do?

  • Agency owner used their personal credit cards as the form-of-payment for the tickets they issued and reported on their IAR, but billed their customers credit cards a higher dollar amount using their merchant account and provided their customers an invoice to reflect the amount they billed them;


In outs of the ara carrier arc perspective

What did they do?

  • Agency listed a family member on their IATAN list so that family member could receive travel benefits from the travel industry that they were not eligible to obtain.


In outs of the ara carrier arc perspective

Who used the tickets?

Business and first class passengers


Agent reporting agreement

Section VII: Agent’s Authority, General Rights and Obligations

  • Agent must “maintain ethical standards of business in the conduct of the agency and in its dealing with its clients, the public, ARC and the Carrier”;

Agent Reporting Agreement


In outs of the ara carrier arc perspective

Section VII: Agent’s Authority, General Rights and Obligations

  • Agent must “comply with all instructions consistent with this Agreement properly issued to him by ARC in the Industry Agents’ Handbook and other specific instructions consistent with this Agreement provided from time to time by ARC;

  • H. Agent must comply with Carrier instructions;


In outs of the ara carrier arc perspective

Section VII: Agent’s Authority, General Rights and Obligations

  • K. Agent must not use any Agency, employee or other’s credit card to purchase “air transportation for sale or resale;


In outs of the ara carrier arc perspective

Section XIV: Inspection and Retention of Agent Records

  • Agent must retain, for at least two years, its original paper copy of:

    • all voided Traffic Documents;

    • All Credit Card Charge Forms (UCCCFs);


In outs of the ara carrier arc perspective

Section XIV: Inspection and Retention of Agent Records

  • Agent must retain, for at least two years, its original paper copy of:

  • All supporting documentation including Debit/Credit memos, AADs, PTA refund documents, discount certificates, vouchers, value coupons associated with refunds, exchanges, and voids, as well as other documents which ARC or a Carrier may require.


In outs of the ara carrier arc perspective

Section XIV: Inspection and Retention of Agent Records

  • Agent must retain, for at least two years, its original paper copy of:

  • Agent must retain, for at least two years, its original paper copy of all agent couponsfor manual Traffic Documents….


In outs of the ara carrier arc perspective

Section XIV: Inspection and Retention of Agent Records

Agent must send the Carrier upon request any and all supporting documentation, as listed previously...Failure of the Agent to do so may result in the Agent being liable for the transaction to which the documentation related


In outs of the ara carrier arc perspective

Section XIV: Inspection and Retention of Agent Records

D. Agent’s records may be examined by a Carrier with respect to ARC Traffic Documents issued by the Agent on behalf of such Carrier at any time.


Section xv reviews of qualifications of and breaches by agent

  • In situations such as the following, in which it appears to ARC, that there may be or has been fraudulent conduct on the part of the Agent and that there is a clear and present danger of substantial loss to ARC and/or the Carriers, ARC may remove stock and plates, and immediately inhibit all ticketing:

Section XV: Reviews of Qualifications of and Breaches by Agent


Section xv reviews of qualifications of and breaches by agent1

  • Using a credit card without the cardholder’s authority, or against a stolen or otherwise fraudulent credit card;

  • 6. Permitting alteration, omission, or other falsification on coupons of original ARC Traffic Documents or on any reissue thereof;

Section XV: Reviews of Qualifications of and Breaches by Agent


Section xv reviews of qualifications of and breaches by agent2

  • Falsification of reports, Traffic Documents or other documents;

  • 10. Reporting cash refunds against sales made on credit cards;

Section XV: Reviews of Qualifications of and Breaches by Agent


Section xv reviews of qualifications of and breaches by agent3

Section XV: Reviews of Qualifications of and Breaches by Agent

13. Engaging in a pattern of potential “bust-out” activity, such as sudden, sharp fluctuation of sales, which along with other relevant information, indicates to ARC that the Agent is engaging in fraud;


Section xv reviews of qualifications of and breaches by agent4

Section XV: Reviews of Qualifications of and Breaches by Agent

14. Issuing, writing up, or otherwise producing duplicate or invalid Credit Memos or other supporting documents, e.g., vouchers and/or credit certificates;


Section xv reviews of qualifications of and breaches by agent5

Section XV: Reviews of Qualifications of and Breaches by Agent

15. In the absence of specific permission of the Carrier, the Agent shall not use any credit card in the name of the Agent or Agent’s personnel; nor report a credit card transaction where at any time the Agent bills, invoices, or receives payment in cash from the customer.


Section xv reviews of qualifications of and breaches by agent6

Section XV: Reviews of Qualifications of and Breaches by Agent

  • Submitting for refund or reissuance an ARC traffic document or transaction that has been used or has already been refunded or reissued;


Section xv reviews of qualifications of and breaches by agent7

Section XV: Reviews of Qualifications of and Breaches by Agent

  • Use or misuse of the IAR system that, for example, prevents the proper reporting of all sales or results in Improperly Reported Sales.

    Agent must appeal the Section XV action to the Arbiter within 10 Days or ARA is terminated


Section xxix termination

  • A Carrier appointment may be terminated as between the Agent and any individual Carrier at any time by notice sent in writing and sent via service that provides proof of receipt.

Section XXIX: Termination


Section xxix termination1

  • Termination shall take effect immediately upon receipt of notice, or upon the date indicated therein.

  • G. ARC shall be considered a real party in interest in any cause of action, suit, or arbitration after the termination of this Agreement to collect amounts due the Carrier or ARC by the Agent.

Section XXIX: Termination


Section xxxi choice of law

This agreement shall be construed in accordance with, and governed by, the laws of the Commonwealth of Virginia.

Section XXXI: Choice of Law


In outs of the ara carrier arc perspective

What did ABC Travel violate?

  • Agent must maintain ethical standards of business in the conduct of the agency and in its dealing with its clients, the public, ARC and the Carrier;

  • Agent must comply with all instructions consistent with this Agreement properly issued to him by ARC in the Industry Agents’ Handbook and other specific instructions provided from time to time by ARC;


In outs of the ara carrier arc perspective

What did ABC Travel violate?

  • The agent shall comply with all instructions of the Carrier, and shall make no representation not previously authorized by the Carrier;

  • Falsificationof reports, Traffic Documents or other documents;


In outs of the ara carrier arc perspective

What did ABC Travel violate?

  • In the absence of specific permission of the Carrier, (a) using any credit card which is issued in the name of the Agent, or in the name of any of the Agent’s personnel, or in the name of any third party, for the purchase of air transportation for sale or resale to other persons, …


In outs of the ara carrier arc perspective

Actions Taken with ABC Travel

  • Two Agency Debit Memos (ADM’s) issued to the travel agency totaling $199,200;

  • Agency required to provide airline a Line of Credit in the amount of $200K for a three year period should the agency default or commit additional abuse;


In outs of the ara carrier arc perspective

Actions Taken with ABC Travel

  • Agency owner and family members frequent flyer accounts terminated due to violation of the frequent flyers program’s terms and conditions;

  • Agreement restricting an identified member of agency’s owners family from being involved with the travel agency’s operations in any manner.


Could arc have done the same thing

Could ARC have done the same thing?

Debit memos – No

Line of Credit in favor of the airline – No

Terminate Frequent Flyer accounts – No

Restrict involvement/employment of

Individuals - No


What can arc do that an individual carrier cannot do

What can ARC do that an individual carrier cannot do?

  • Analyze transactions/data across all airlines and agents

  • Audit agency on behalf of all carriers

  • Initiate Section XV action

  • Terminate ARA on behalf of all carriers


Conflicts no

Conflicts?No!

Carrier’s can take independent actions regarding their agents, including Debit Memos, settlements, complaints with the Arbiter, and/or revoke the agent.

ARC can take action on behalf of all carriers, including settlements, complaints with the Arbiter and terminate the ARA on behalf of all carriers.


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