In a statement issued in Toronto on Friday, the GENESIS Travel Distribution System and its U.S. affiliate, the United States Travel Agent Registry (USTAR), expressed dismay, but no surprise at the Airlines Reporting Corporation (ARC) announcement today to force U.S. travel agents to report all transactions electronically by year end.
GENESIS President and CEO Bruce Bishins has been an unwavering critic of ARC`s plan to progressively bully travel agencies into Interactive Agent Reporting (IAR) which Bishins warned early-on is the first step to daily reporting and the subsequent shifting of credit card merchant status from airlines to agents themselves. How many more ways could we have warned travel agents that IAR would eventually be crammed down their throats?, Bishins said. GENESIS has long-challenged ARC`s propaganda that ARC`s objectives with IAR were to save costs and increase productivity. The reality is that settlement plan costs to manually process travel agent transactions were always fractional at best and the least expensive component of the travel agent/airline distribution relationship.
It`s clear that airlines` costs for settlement processing are insignificant compared to other costs like CRS fees and credit card costs. Since carriers claim they cannot control CRS fees, and agent commissions are already at near rock-bottom levels, it`s the credit card cost which is the next achievable target” said Bishins. In order for carriers to shed themselves of credit card costs on agent sales, carriers must first be in a position to transfer merchant status to agents; that is to make the travel agent responsible to use the agent`s own credit card merchant agreement to process the sale. The resulting transaction would be a cash sale between the agent and the airline.
Airlines are not inclined to begin the merchant status transfer until such time as they have the ability to obtain cash from agents on a daily basis; the same way they do today in credit card transactions. Waiting for cash on the current seven day basis is an unacceptable cash flow problem for carriers and is the only obstacle standing in the way to begin the merchant status transfer. IAR would remove that obstacle by facilitating not only daily reporting, but also daily remitting.
Bishins also pointed out that ARC`s claims that the airlines have no plans to move to daily reporting were proven false in a December 2001 communiqu?Eto airline members when the International Air Transport Association (IATA) revealed that daily agent reporting was a key objective and a “best practice?Eendorsed by airline revenue accounting managers at their meeting in Bangkok, 12-13 September 2001.
In fact, daily reporting topped the list of IATA`s project streams in current airline revenue accounting initiatives. This is well beyond even ARC as IATA has clearly begun to transform BSPs through BSPLink and other processes as steps towards a complete electronic stranglehold become more and more obvious?E Bishins added. GENESIS will join the Association of Retail Travel Agents in filing a complaint with the U.S. Department of Justice that ARC has exceeded its authority, is engaged in facilitating anti-competitive sales practices, and has changed it operations substantially enough in relation to conditions imposed by the DOJ in the Department`s 1984 review of the proposed formation of ARC.
Bishins is hopeful that ASTA will also join as a co-complainant. ARC`s unilateral, arrogant, and summary treatment of travel agents is deplorable. It failed to bring IAR in on a voluntary basis; it failed again by attempting to extort agents financially to adopt IAR; now it simply plans to force IAR upon us without option or choice, and most importantly, without any dialogue with the agency community. ARC has finally shown it true colors. What next?; no more voiding?; no more manual tickets? It`s time for agents to fight back?E Bishins said. GENESIS centers around a travel agency owned and initiated, point-of-sale system incorporating reservations, ticketing, supplier settlement, and agency accreditation. The GENESIS platform is being implemented and is jointly owned by USTAR (USA), CSTAR (Canada), ESTAR (Europe), ASTAR (Australia), ISTAR (India), and MEXSTAR (Mexico).