March 19, 2003 - Arlington, VA - ARC's Board of Directors (Board) met yesterday via conference call to review ARC's Business Process Improvement (BPI) Initiative.  After a review of ARC's industry dialog by ARC management, the Board voted to approve implementation of a modified version of BPI Phase I effective June 4, 2003.

Management's report to the Board referenced the four month long dialog with travel agents, corporate travel departments (CTDs), and carriers along with feedback and proposals for changes to the initial ARC proposal first introduced on November 15, 2002.  “The engagement by the travel agent and CTD communities was significant and fruitful,” said ARC President and CEO, David Collins.  “We learned quite a bit about the agent business process and we were persuaded to alter the initial proposal to limit the voiding window in a number of areas.  This is something that could not have been accomplished without productive engagement in a cooperative dialog with our principal stakeholder communities,” he added.

The modified BPI Phase I proposal adopted by the Board is, at its core, a change to the ability of travel agents and CTDs to void a transaction during the course of the sales week.  Intended as a means to correct ticketing errors, the void function will remain available on the date of sale plus an additional forty-eight hours, the final twenty-four hours of which will be limited to voiding through IAR only.  This is a change from the current process that allows the ability to void a transaction through the first day following the conclusion of the sales week.  In addition to expanding the void window an additional 24 hours, as a result of agent/CTD dialogue, another revision to the original void proposal was adopted by ARC's Directors.  It will revise the void requirements with respect to the ability to modify transactions. While sale transactions will not be modifiable after 48 hours, all other transactions (refunds, exchanges, adjustment documents) will be subject to modification.  Also, MCO documents can be changed or linked into exchange transactions after the 48 hour period.  These changes were adopted specifically at the request of travel agents, and ARC believes they will substantially lessen the costs of complying with the new voiding rules.

A subject of particular concern to travel agents was that of “mutuality”, defined by Paul Ruden, ASTA VP, in a presentation to ARC's Board, “as the need for airlines to adhere in practice, not just in policy, to the same strict, no exception voiding practices” being proposed in BPI Phase I.  In response to this concern, the ARC Board confirmed that ARC will compile and publish a list of individual carrier practices for handling exceptions to “no waiver” policies, if any, along with procedures for travel agents to obtain exception authority.  In response to the request to make the decision to grant or deny a waiver irrevocable, it was noted that it would be virtually impossible to ensure that there would never be a case where a customer who has been denied a waiver through their travel agent would not possibly receive one at the airport. Technology is not in place that would alert an airport ticket counter or gate agent that a particular customer has asked for a waiver through their travel agent and been denied. Such cases are viewed, moreover, as rare, particularly at this time. The Directors did, however, acknowledge the concerns of the travel agents, and directed ARC to keep this issue before the industry, monitoring to ensure that occurrences are, indeed, rare.

ARC's management proposal to the Board also contained a commitment to address processing problems that exist with exchange transactions.  ARC will take the leadership in the industry to identify processing problems that exist with exchanges, and will establish an industry action plan to resolve these, with the highest priority.  ARC will immediately call its Agent Working Group (AWG) into session to address the topic of exchange transactions.  Specifically, the AWG will be asked to prioritize the projects that need to be addressed in this area, and to report back to the JAB-ARA, at its April 30, 2003 meeting, with respect to its top 6 projects.  The AWG will meet no less frequently than every 30 days to address and monitor these issues, and will provide periodic updates to the JAB-ARA.

Responding to agent concern about customer reaction to the new limitations on the ability to void sales transactions, ARC will prepare a statement for travel agents to use with customers, particularly corporate customers, explaining that the new voiding procedures are being implemented at ARC's direction, and that all travel agents must comply.  This request was made of ARC by the Agent Working Group to assist travel agents in explaining where the changes came from, and in advising customers that they can't “shop” for better voiding rules with another travel agent; the rules apply to all.

The Board recognized ARC's management, the BPI project team, and the many industry professionals who have worked to identify solutions to bridge disparities.  ARC and those involved in the dialog were challenged to identify solutions that met the urgent economic imperatives of our industry while minimizing any adverse impact on the agent, CTD, and carrier business process.  “With every day that passes, we hear worsening reports of the desperate financial situation of our industry.  While this compels us to leave no stone unturned when seeking opportunities for increased efficiencies, we nevertheless felt that changes of the magnitude of those proposed under BPI demanded a thorough and exhaustive industry dialog in a spirit of cooperation and shared concern.” said Kathi Argiropoulos, ARC Vice President - Travel Agency Services & General Counsel.