ARC/CTD State of the Union Michael Premo President & CEO
ARC
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We Are An airline-owned travel industry solution provider
Incorporated in 1984 as a Delaware corporation Predecessor Area
Settlement Plan established in 1964 Governed by board of airlines
plus the Chairman and President/CEO Headquartered in Arlington, VA;
sites in Louisville, Tampa & San Juan 394 employees Primarily,
we: Accredit travel agents in the U.S. & territories for 192
airlines and provide tools for reporting and payment on ticket
sales Provide a range of data services to customers interested in
better understanding or expanding their commerce in the travel
industry
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Topics ARC Update Crunching the Numbers Debit Memo Working
group FareSight Questions If we have time and you are interested:
IATA NDC: Why, Oh, Why All the Hubbub?
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Crunching the Numbers
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ARC Total Transactions (Millions) 1966-2012 5
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ARC Locations 1966-2012 6
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7 ARC Total ($Billions) 2002-2012
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YTD CTD Volumes and Demographics 9 Total Transactions Jan -
Sept 2013 Total Sales Jan - Aug 2013 CTDs $0 - $5M CTDs $5M-$10M
CTDs $10M-$20M CTDs Over $20M 1,711,169$1,243,902,45711212 9 Total
Transactions Jan - Sept 2012 Total Sales Jan - Sept 2012 CTDs $0 -
$5M CTDs $5M-$10M CTDs $10M-$20M CTDs Over $20M
1,725,038$1,205,303,71811512138
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CTD as of 2012 Total Locations: 148 Independent: 119 Homes: 8
Branches 17 STPs: 4 Number of new CTDs in 2012: 5 Number of Vol.
Del. or Terminated CTDs in 2012: 9 Current CTD Listing as of SEP
2013 10 CTD as of 2013 Total Locations: 145 Independent: 116 Homes:
8 Branches 17 STPs: 4 Number of new CTDs in 2013: 5 Number of Vol.
Del. or Terminated CTDs in 2013: 8
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2013 Fees Annual Fee: $200 Transaction fee: $0.016 no charge
< 1000 per qtr max 2.25 million qtr Application fee: $3,000 ARC
CTD Fee Outlook 11 2014 Fees Annual Fee: $210 Transaction fee:
$0.017 no charge < 1000 per qtr max 2.25 million qtr Application
fee: $3,000
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CTDs Our Happiest Customers! CTD NPS Score = 70 (Carrier Score
36.5/Agent Score 34.1) NOTE: A score of 50 or above is considered
best in class Number of CTDs Represented = 46 Total Number of
Responses = 53 Promoters = 41 Passives = 8 Detractors = 4 ARC
conducted its first Net Promoter Score survey in the Spring of
2013
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Debit Memo Working Group
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Process Improvement Methodology: Focus on the Customer 14 NPS
Customer Expectation Research BPI Efforts BPM Metrics Process
Evaluation Process Measurement Process Improvement
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Every year our industry spends at least $40 million to resolve
$100 million in debit memos 15
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The DMWG has had unprecedented collaboration from across the
industry 16
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Where are we now? Fares and Taxes Industry- $15.2 million Fare
filing issues are top priority so we engaged ATPCO to conduct Fare
Filing 101 course YQ/YR needs its own subgroup! Creating a
GDS/Carrier contact list to facilitate the resolution of fare
filing issues Debit memo analysis to confirm and prioritize fare
filing issues Refunds and Exchanges Industry- $11.9 million Lack of
knowledge on carrier policies are driving these memos Created
matrix that links to carrier policies (over 180 carriers) along
with fare filing contact list Evaluating if standards/consistency
can be established for endorsement box verbiage on schedule changes
Setting up one-on-one conversations with carriers and agents to
discuss specific issues
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Where are we now? Commissions Industry- $15.6 million Root
causes for commission memos are contract violations, recall
commissions, and incorrect commissions Identifying commonalities to
drive best practices for negotiated rates Creating best practices
and training for common mistakes Chargebacks Industry- $19.2
million Goals are travel agent education, card company engagement,
and best practices Working Visa on critical issues for preventing
chargebacks Providing best practice webinars to travel
agencies
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Where are we now? 19 ARC Memo Manager AMM has had multiple
maintenance releases during 2013 to add functionality requested by
customers: July 2013: Add a link to access carrier policies Add
agency name to Memo Details screen Include dispute date in export
Add GDS grant access date to export Additional AMM releases planned
over the next 6- 9 months:
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What is next? 20 Held our second Face-to-Face meeting on
September 11 and confirmed the following: All participants see
value in our efforts and want to continue with most of subgroups
with the possibility of adding additional groups Standardizing
debit memo codes is a top priority. A sub group to address this
will be formed in the next 90 days. Enhancing AMM to add more
functionality for GDS is another priority and ARC is meeting with
GDSs to confirm the priority of proposed enhancements Establish
Communications and Education subgroups
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FareSight
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22 Business intelligence tool targeted at corporate travel
managers (CTMs) Use ARC data to optimize CTMs corporate travel
programs Assess purchasing effectiveness Assess policy
effectiveness Agreement threshold monitoring Speedy insights and
baseline, not against one agencys customers but the whole agency
market
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Major ARC Work Activity 2013/2014/2015 Revised ARA
implementation July 1, 2013 Debit Memo Working Group launched Jan.
2013 IATA ARC settlement benchmarking Engagement on IATA New
Distribution Capability Ensure use of ARC ticket stock when U.S.
agents sell in NDC Replacement of core settlement systems Five-year
project awaiting ARC Board approval Compete in data products
Explore airline-agency merchandising cooperation and potential for
ARC 24
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Questions? Or we can talk IATA NDC if you want.
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NDC
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What is NDC? NDC is an IATA-led collaborative industry
initiative that: Defines a new messaging standard between airlines
and agents Enables greater transparency and choice for consumer in
comparison shopping And intends to close the gap between direct and
indirect channels, making the indirect channel as customer-centric,
retail-like as the direct channel 27 Source: IATA
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A few key terms IATAs Resolution 787 (Enhanced Airline
Distribution) Describes the main business processes required for
airlines to create their own product offer within their own systems
which will be provided directly by and owned by the airline IATA
XML Message Schema IATA standard to create a Dynamic Airline
Shopping engine Application Program Interface (DAS API)based on
Open Axis Schema originally created by Farelogix 28
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Airline Distribution Today Availability Fare Filing Schedule
Airline GDS Builds content 3 rd Parties Agent Customer Source:
IATA
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Airline Distribution Tomorrow? Product Price and Availability
Engine Airline Agent Customer Dynamic Airline Shopping Interface
Aggregator Agent Source: IATA
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NDC Roadmap 31 Request for Pilot Participation Pilots Launches
YE Pilots Review Final Pilots Review Capability Deployment Industry
Mass Adoption Ref. Imp. v1.0 XML v1XML v2XML v3XML v4 XML v5
Reso787Reso787 v2Reso787 v3 Mockups Learning Risks 2013 - 2014 2015
- 2016 Source: IATA
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Whats the Controversy? IATA submits request for the resolution
to be approved by DOT. Not thinking its a huge deal. Does what it
does for ALL industry resolutions. DOT says: Hmm, this looks like
kind of a big deal to us. We classify as Level 3 we want to get
public comments. All heck breaks loose. GDSes / Business Travel
Coalition even GBTA weigh in against NDC.
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The Arguments Against Its the end of anonymous shopping. By
collecting personal data, carriers will offer higher prices to
customers they think can afford it. IATA admits the resolution is
poorly worded. Make them pull it and resubmit. (And go through this
all over again.
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The Arguments Against Its the end of anonymous shopping. By
collecting personal data, carriers will offer higher prices to
customers they think can afford it. IATA admits the resolution is
poorly worded. Make them pull it and resubmit. (And go through this
all over again.)
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The Real Arguments - Mikes Take Agent - Im worried about my GDS
revenue, and besides, who will pay me for this extra work? GDS -
Airlines might not want to pay for my pricing engine Airline I dont
think my product gets presented as I would like it to be Agent My
agents want to keep using green screen GDS We can jazz up green
screens if they want Airline Ugh! Forget it send them to my
website!
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ARCs view We support ANY initiative that expands content
availability to agencies and CTDs NDC? Yes! Carrier & GDS
bilateral agreements? Yes! Direct Connect? Yes! That said, dont
throw valuable / proven business processes out accidentally.
Especially ARC ticketing!
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What to Watch Out For NDC scope creep What beyond the XML
standard will change? NDC = do it like on the airline web-site Does
it ticket via ARC? Or via airline stock on the web-site? Who
controls the PNR? Will my mid-office and self-book tools still
work? Dont worry, your GDS will do it all for you
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Summary NDC not necessarily a bad thing One less reason for
travelers to go outside to buy Definitely devils in the details Ask
questions and talk specifics on business process changes with
everyone!
