American Express last week expressed to corporate customers its objections to proposed rule changes by ARC that would reduce from a week to just 24 to 48 hours the time allotted for reporting and voiding airline ticket sales
(BTN, Dec. 9, 2002). "In order to service customers properly, the travel industry relies on this one-week window to correct inadvertent ticketing errors and to take advantage of the numerous changes that result in lower fares for our customers," said Mike Mulvagh, American Express Corporate Services vice president of communications and industry affairs, in a Jan. 30 letter to customers. Mulvagh added that the new rules as proposed would increase American Express' processing costs, nonrefundable "spoilage rates" and travel program costs resulting from travel counselors' inability to correct ticketing errors.
In response, ARC vice president of travel agency services Kathi Argiropoulos today sent a letter to Mulvagh saying ARC "finds your protestations to be primarily a demand to continue practices wholly unrelated to the actual purpose of voiding." She pointed to a 7 percent across-the-board void rate, resulting in a 2002 loss between $36 million and $74 million and driven by "abuse we are seeing in the system."
"A large number of agents are using the void functionality not to correct errors as intended, but to avoid reporting sales, whether intentionally or by mistake," she added. "There is a serious lack of integrity in our reporting system."
Argiropoulos also said ARC agreed with several agencies to add another day to the 24-hour window for Interactive Agency Reporting void reporting and noted ongoing dialogue with the travel agency community.
Travel agencies have lined up on different sides of the issue. Rosenbluth International and TQ3 Maritz Travel Solutions in December downplayed the ramifications of these potential ARC rule changes, while Carlson Wagonlit Travel suggested a more significant impact for some corporate travel clients.
WorldTravel BTI weighed in on the topic, suggesting a working group of representatives from ARC, airlines, agencies and global distribution systems address the issue.
"Although no specific date has been set, we're confident that ARC will implement these changes early this year," WorldTravel BTI said in its January Insight newsletter. "The new policy would reduce the travel agencies ability to assist the traveler in securing the lower cost fare, but would immediately generate revenue for the airlines in higher ticket costs and change fees. As a remedy, we do not feel that shortening the void window alone will alleviate fraud."