ARC'S BOARD REVIEWS A YEAR OF CHALLENGE AND SUCCESS

Arlington, VA, Decebmer 12, 2003 - ARC's Board of Directors held its final meeting of the year this week at ARC's Arlington, VA, headquarters, providing an opportunity to review ARC's actions on behalf of its stakeholders this year.

ARC's management reviewed for the Board steps taken to optimize the ARC systems in the face of the collective impact on the airline and travel industries of an economic downturn, threats of terrorism and associated countermeasures, armed conflict abroad and the SARS outbreak.  Under the heading of Business Process Improvements (BPI), ARC instituted measures in June to shore up the integrity of the voiding process, stem costly fraud and abuse and speed delivery of accurate and timely data to the carriers.  The implementation of the voiding measures followed a four-month period of industry dialogue that also led to a commitment to improve exchange processing.  Management related very positive results in the reduction of unreported sales.

ARC COMPASS^sm, the electronic data warehouse that powers the ARC Document Retrieval Service, was expanded in 2003 to make thirty-nine months of data available online to travel agents, corporate travel departments (CTDs) and carriers, allowing the reduction of costly paper printing and storage by those stakeholder groups and ARC.  The Service is currently used by more than 15,000 travel agent and CTD locations and 110 global air carriers.

This year also marked the advent of a strategic partnership between three airline industry-owned entities - ARC, IATA (International Air Transport Association), and ATPCo (Airline Tariff Publishing Company) - to facilitate automated airline interline settlement with the AIA First & Final Interline Billing Service.  This coordinated industry effort results in the reduction of a thirty-three month process for addressing exception processing in interline settlement down to two months, with potential savings to the carriers in the millions of dollars.

2003 has also been a productive year for the ARC Direct Connections program - a means to support multiple-channel distribution solutions with ARC's settlement engine and data integration.  Various one-to-one and one-to-many relationships backed by settlement via ARC Direct Connections currently account for roughly three percent of ARC processing volume.  ARC management predicted a further increase of that volume by the end of 2004.

The Board approved the schedule of 2004 agency fees and charges, as forwarded by the Joint Advisory Board - Agent Reporting Agreement (JAB-ARA).  The fee schedule for travel agents preserves the 70/30 split of the past year with 70 percent of the cost to accredited locations being location-based and 30 percent volume-driven.  The ceiling for the volume-related transaction fee was increased from one million transactions per entity on a quarterly basis to 1.3 million transactions per entity.  On the other end of the scale, the volume-related fee component is only charged to agency entities with a volume of at least one thousand transactions per quarter.  It is projected that a location fee of $140 and a transaction fee of $0.013 will result.

In another administrative action, the Board approved or ratified the composition of the following Boards, councils and committees.

2004 ARC COMMITTEE MEMBERSHIP

BOARD OF DIRECTORS

David Landuyt	Chairman	Karen Berry	HA
Marc Rosenberg	AC	Juergen Kuhnke	LH
Kevin Thiel	AS	Al Lenza	NW
Chris Abbey	HP	Steve Whaley	WN
Doug Herring	AA	Pat Lilly	UA
Barbara Cohen	BA	Anita Barrera	US
John Slater	CO	David Collins	ARC
Pam Elledge	DL	Tom Browne	ATA (Observer)

ADVISORY COUNCIL

Becky Powell	AAA	William Chiles	Hickory
Michael Mulvagh	American Express	Sarah Woods	Navigant International
Adriane D. Greene	ARTA	Ross Senholzi	Rosenbluth
Stephanie Turner	ASTA	Don Gould	International Tours
Phil Davidoff	Belair/Empress Travel	Jay Risher	Uniglobe
Roger Block	Carlson Wagonlit Travel	Lauraday Kelley	Vacation.com
Brent Thompson	Expedia	Harry Rimm	VIP Travel
Jack Mannix	GIANTS	Kyle Perry	WorldTravel BTI

JOINT ADVISORY BOARD

Susan De La Cruz	AA	Chris Abbey	HP
Becky Powell	AAA	Sarah Woods	Navigant
Michael Mulvagh	American Express	Phil Keeney	NW
Adriane D. Greene	ARTA	Lecia Overton	UA
Stephanie Turner	ASTA	Lauraday Kelley	Vacation.com
Kevin Cline	CO	Harry Rimm	VIP Travel
Doug Field	DL	Kathy Eells	WN
		David Landuyt	Observer

AGENT WORKING GROUP

Ray Endrizzi	AAA - Auto Club South
Marlene Herrera	AAA - National Office
Mario Moyano	ALTA
Amy Browning	American Express
Kathy Postler	American Express (formerly Rosenbluth Intl.)
Lenore Kaseman	American Express (formerly Rosenbluth Intl.)
John Pittman	ASTA
Linda Kuhne	Austin Travel
John W. Bailey	Bailey Travel
David Hinze	Carlson Wagonlit Travel
Diane Trager	Carlson Wagonlit Travel
Paula Peitz	Carlson Wagonlit Travel
Pamela S. Wieder-Bier	Duso World Travel
Dolores Strait	Global Express Travel
Beverly Frable	Navigant International
Mary Jane Huckleberry	Navigant Interantional
John Rumbley	Omega World Travel
Cindy Wightman	Omega World Travel-HQ
Jennifer Jordan	Priceline.com
Jane Sullivan	TQ3 Travel Solutions
Ricki Stillwell	TQ3 Travel Solutions
R. Shawn McGrew	Wal-Mart Global Travel Services
Sandy Plummer	Wilshire Travel
Lisa Fulle	WorldTravel BTI

TRAVEL AGENT ARBITER, INC. BOARD OF DIRECTORS

David Landuyt	Chairman	John Pittman	ASTA
Wayne Berens	American Express	Doug Field	DL
Adriane D. Greene	ARTA	Richard Lowry	US

INDEPENDENT ARBITRATION PANEL

Messrs. Rochvarg, Blumentahl and Colwell

TRAVEL AGENT ARBITER

William McGee

Associate Arbiters: Messrs. Deitz and Ramirez