Airlines Reporting Corporation

Advisory Council Meeting Minutes

Thursday, April 17, 2008

Advisory Council (AC) meeting was held on Thursday, April 17 at ARC’s Headquarters in Arlington, VA. The meeting was called to order by Jeannine Rahe, Director – Marketing and Strategic Business Development, at 1:00 pm EDT. The following industry and ARC Representatives participated.

Attendees:
Arthur Salus / Duluth Travel
Barry Richcreek / ARTA - RichcreekVacationCenter
Cindi Gregg / Navigant International
Craig Miller / Continental Airlines
David Mitchell / BCD
Dina Dass / American Express
Don Kennedy / Carlson Wagonlit Travel
Eric Wiser / Southwest Airlines
Glen Mac Donnell / American Automobile Association
Harry Rimm / VIP Travel
Kathy Bridges / Delta Airlines
John Pittman / ASTA
Paige Blunt / American Airlines
Richard Esman / CBTG, Inc / Rich Worldwide Travel

ARC Representatives:David Landuyt, Jeannine Rahe, Lauri Reishus, Chuck Thackston, Kathi Argiropoulos, Mike Premo, Leslie Gilpatrick, Sally Dodson, Alan Mutén, Jennifer Briede, Les Tucker, Sarah Sager, Shelly Younger, Bill Susinski, Dan Swain, Judy Howard, Anita Barrera,Brian Jarrel and Karla Lawson

Introduction and Meeting Overview
Slides 2- 9 Attachment A / Jeannine Rahe
Director, Marketing and SBD

Jeannine Rahewelcomed attendees to the meeting and explained the purpose of re-establishing the Advisory Council (AC),

ARC Overview – ARC Distribution Solutions in Interesting Times
Slides 10 - 38 Attachment A / Mike Premo
VP, Sales, Marketing and Customer Care

Mike Premo gave a presentation giving a look at ARC’s current status and recent events. He pointed out some of the strategic challenges and opportunities that face ARC and its airline and agency communities and the actions ARC has taken and will continue to pursue in response.

  • Challenges
  • Decline of legacy carrier capacity
  • Carrier pressure for direct booking and ticketing
  • Agencies investing in Super-PNR systems
  • ARC Actions
  • Budget cuts and reduction in staff
  • Flex-Rate transaction
  • Campaigns to market ARC value at industry events
  • More cooperative relationships with IATA for global solutions

Strategic Review –
Industry Products and Services
Slides 41-45 Attachment A / Lauri Reishus
General Manager, Industry Products and Services

Lauri Reishus discussed the Industry Products and Services business line’s strategy to continue providing stakeholders with solutions that increase productivity and revenue earning opportunities, improve processes, and reduce cost. Some of those initiatives include:

•IP&S initiatives to reduce distribution costs, eliminate paper or manual processes and improve efficiencies:

–ARC Payment Express for collection of GDS-related fees

–Introduced ARC Memo Manager mid-2007

–Enhancement to ARC Agent’s Choice – Jan. 2008

ARC Memo Manager
Slides 46 - 51 Attachment A / Jennifer Briede
Product Manager, Industry Products and Services

Jennifer Briede updated the Advisory Council on Memo Manager since its launch in August of 2007. Topics covered were:

  • Carrier Implementations
  • Current users have already seen benefits from AMM:
  • High agency adoption rate

ARC Verified Travel Consultant
Slide 52 - 56 Attachment A / Lauri Reishus
General Manager, Industry Products and Services

Lauri Reishus discussed the evolving travel agent business model. She also discussed growth of home-based or non-ticketing agents how that model presents new challenges for all suppliers. In response to these developments ARC has introduced a new accreditation level called VTC – Verified Travel Consultant.

  • ARC introduced Verified Travel Consultant (VTC) mid-2007
  • Rigorous approval process; leverages core ARC expertise…same process as for full accreditation minus on-site inspection and financial surety (bond or letter of credit)
  • VTCs participate in IAR and Memo Manager
  • Provides expanded customer base for ARC products & services

ARC MarketPlace
Slide 57 - 61 Attachment A / Judy Howard
Product Manager, Industry Products and Services

Judy Howard presented an overview of ARC MarketPlace and Commission Link.

ARC MarketPlace

•Solves content fragmentation challenge for destination activities and other offerings not found in GDSs.

•Simple & easy sales experience

•Commissions tracked and paid by ARC

ARC Commission Link

•Quick customized set up

•Service is free and low-maintenance

•All sales activity tracked and reported

•No login for the participating entities’ or their customers.

•No financial risk to the participating entity

•No special software, hardware, development costs or contracts

ARC Travel Card
Slide 62 - 70 Attachment A / Brian Jarrel
Product Manager, Industry Products and Services

Brian Jarrel updated the Advisory Council about the award winning (Winner 2008 Pay Before Awards – Best Consumer Card Program) ARC Travel Card which launched December 2007. ARC Travel Card is a Prepaid MasterCard® Travel carddesigned to meet the dining, shopping and entertainment payment needs of travelers. The card is accepted worldwide by merchants to pay for goods and services, and it can also be used to withdraw cash from ATMs.The ARC Travel Card is available for sale byARC participating travel agents through ARCMarketPlace.com, and ARC Travel Card programs forcarriers are available as well.

Strategic Review –
Data and Analytics
Gaining Advantage from the Data
Slide 72 - 90 Attachment A / Chuck Thackston
General Manager, Data & Analytics

Chuck Thackston discussed how ARC currently uses data and how it will continue to use data to offer products to the industry. He also presented an overview of how data can be used to gain an advantage in business by exploring the components of business intelligence and how ARC has developed tools that can aid customers in that process.

•Four Basics of Business Intelligence

•Collect data

•Organize & analyze

•Make decisions

•Take action

•Data ARC has now and in near future

•Ticketed Fare

•Fees & taxes

•ARC Number

•Carrier Information

•O & D and Connections

•Ticketing and travel dates

•Cancellations / changes

•Passenger information

•Demographic analysis

•Debit Memo information

•Precision Market Analysis

•Corporate performance reporting

•Ancillary Revenue reporting

Strategic Review – Reporting and Settlement
Slide 92 - 103 Attachment A / Leslie Gilpatrick
General Manager, Reporting and Settlement

Leslie Gilpatrick discussed the Reporting and Settlement strategic outlook for upcoming initiatives.

  • Respond strategically to industry mandates and current customer needs
  • ASP – Area Settlement Plan and IAR – Interactive Agent Reporting
  • AIA First and Final Billing
  • Invest in new product research and development
  • Complete business cases around hotel settlement
  • Invoice presentment
  • Up front hotel audits
  • Commission audits
  • “Virtual Ticket” settlement
  • Hotel commission payment processing
  • Strengthen And Broaden ARC’s Customer Base
  • Continue operational support
  • Continue support for Direct Connects
  • Explore growing multiple currency processing to CTDs
  • Customer (agency) focused enhancements for IAR
  • Universal Settlement System
  • Customer Integrated Management System (CIMS)
  • A re-designed Settlement Management System that will encapsulate and improve all settlement
  • Controls aspects of ASP processing (e.g. master file, carrier/agent output list)
  • Stores summary management statistics (e.g. financial amounts, coupon counts etc.)
  • Provides a web based interface that will be accessible via the portal.
  • Supports global settlement processing
  • Supports non-traditional customers
  • Aligns with our evolving enterprise architecture

Electronic Miscellaneous Document and Carrier Fees
Slide 105 - 110 Attachment A / Tom Jerosch
Sr. Business Analyst, Reporting and Settlement

Tom Jerosch updated the Advisory Council on Electronic Miscellaneous Documents and Carrier Fees.

EMD - Electronic Miscellaneous Document

•It is an electronic replacement of remaining miscellaneous and paper documents (MCOs, Tour Orders, PTAs)

•Consists of 4 coupons and can be conjunctive (up to 16 segments like an E-ticket)

•Goal: to accept and process EMDs by the end of 2009

Carrier Fees

•Charges for services purchased through a travel agency or GDS that do not appear on airline tickets/documents

•Will be processed similar to a tax code

Visa Product ID Phase II
Slide 111 - 113 Attachment A / Tom Jerosch
Sr. Business Analyst, Reporting and Settlement

Tom Jerosch updated the Advisory Council on the Visa Product ID Phase II.

  • VISA mandated that all transactions using a VISA form of payment include a 2 digit character Product ID to identify the type of card (e.g. signature, rewards, etc.), effective October, 2007.
  • Required the GDS/System Provider to report the Product ID to ARC on the daily SPRF files.
  • Required ARC to output the Product ID on all credit card billing files to VISA processors.
  • Phase II Functionality was implemented March, 2008.
  • ARC outputs the Product ID for those transactions processed through the non-ECCB processing centers.

TASF Form Code Changes
Slide 114 - 117 Attachment A / Tom Jerosch
Sr. Business Analyst, Reporting and Settlement

Tom Jerosch updated the Advisory Council on the Travel Agency Service Fee (TASF) Project

  • Background
  • ATA Passenger Council mandated ARC to discontinue use of Automated MCO form codes for all TASF transactions effective June, 2009.
  • Solution
  • ARC and IATA will split the carrier form code range and each will use half to support their service fee program.
  • Both ARC and IATA have carrier accounting codes, 890 and 954 respectively, so are eligible to use the carrier form code range for their own purposes.
  • ARC will assign a range of carrier form codes to each GDS to use for supporting their agency subscribers issuing service fees.

Other Business / Closing Remarks

Suggestions for the fall meeting included:

  • Request for more open dialog and feedback
  • Meeting should be a whole day
  • Possibly afternoon/evening continuing into the next day
  • Further advance notice of the agenda item to promote more discussion
  • Participants should inform ARC if they have a topic they wish to discuss
  • Include other industry entities (example: GDS representatives, credit card processors, and hoteliers)

Contact Information of the Advisory Council: See Attachment B

Next meeting date: A save-the-date notice will be sent under separate cover.

ADVISORYCOUNCIL PARTICIPANTS

NOTICE RE: TREATMENT OF CONFIDENTIAL INFORMATION

As a condition of participation in the Advisory Council (AC), the participants in the AC acknowledge and agree that all designated confidential information received from ARC is confidential and proprietary to ARC and shall remain the exclusive property of ARC and will only be shared with individuals within participant’s Company/Carrier, as applicable, who have a business need to know and will not otherwise be shared without the written permission of an authorized ARC officer. In addition, the participants acknowledge and agree that matters in the developmental, or working group stage are not discussed or debated in public forums until such time as an actual proposal has emerged and, when applicable, ARC has indicated that such may be publicized, at which time, public discussion is expected and encouraged.