Transcript Document

ARC/CTD State of the Union
Michael Premo
President & CEO
ARC
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
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?
Crunching the Numbers
ARC Total Transactions
(Millions) 1966-2012
Millions
Total Transactions
250
200
150
100
50
0
5
ARC Locations 1966-2012
Total Locations
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
6
STPs
ARC Total ($Billions) 2002-2012
Cash
Credit
Total
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
2002
7
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
YTD CTD Volumes and Demographics
Total Transactions
Total Sales
CTDs
CTDs
CTDs
CTDs
Jan - Sept 2012
Jan - Sept 2012
$0 - $5M
$5M-$10M
$10M-$20M
Over $20M
$1,205,303,718
115
12
13
8
Total Transactions
Total Sales
CTDs
CTDs
CTDs
CTDs
Jan - Sept 2013
Jan - Aug 2013
$0 - $5M
$5M-$10M
$10M-$20M
Over $20M
$1,243,902,457
112
12
12
9
1,725,038
1,711,169
9
Current CTD Listing as of SEP 2013
CTD as of 2012
CTD as of 2013
• Total Locations: 148
• Total Locations: 145
•
•
•
•
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
10
•
•
•
•
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
ARC CTD Fee Outlook
2013 Fees
• Annual Fee: $200
•
Transaction fee: $0.016
•
•
•
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2014 Fees
• Annual Fee: $210
•
no charge < 1000 per qtr
max 2.25 million qtr
Application fee: $3,000
Transaction fee: $0.017
•
•
•
no charge < 1000 per qtr
max 2.25 million qtr
Application fee: $3,000
CTDs – Our Happiest Customers!
ARC conducted its first Net Promoter Score survey in the Spring of 2013
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
Debit Memo Working Group
Process Improvement Methodology:
Focus on the Customer
Process
Measurement
Process
Evaluation
NPS
Customer
Expectation
Research
BPM
Metrics
BPI
Efforts
Process
Improvement
14
Every year our industry spends at
least $40 million to resolve $100
million in debit memos
15
The DMWG has had unprecedented
collaboration from across the industry
16
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
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
Where are we now?
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 69 months:
19
What is next?
• 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
FareSight
• 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 agency’s customers but the whole
agency market
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Major ARC Work Activity – 2013/2014/2015
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•
•
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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
Questions?
Or – we can talk IATA NDC if you want….
NDC
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
Source: IATA
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A few key terms…
• IATA’s 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
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Availability
Fare Filing
Schedule
Airline
GDS
Builds content
Agent
3rd
Parties
Customer
Airline Distribution Today
Source: IATA
Aggregator
Product
Price and
Availability
Engine
Dynamic
Airline
Shopping
Interface
Agent
Agent
Customer
Airline Distribution Tomorrow?
Airline
Source: IATA
NDC Roadmap
Learning
Request for Pilot
Participation
Pilots
Launches
Final Pilots
Review
YE Pilots
Review
Capability
Deployment
Industry
Mass
Adoption
Ref. Imp. v1.0
XML v1
Reso787
XML v2
XML v3
Reso787 v2
XML v4
XML v5
Reso787 v3
Risks
Mockups
2013 - 2014
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2015 - 2016
Source: IATA
What’s the Controversy?
• IATA submits request for the resolution to be
approved by DOT.
– Not thinking it’s 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.
The Arguments Against
• It’s 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.
The Arguments Against
• It’s 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.)
The Real Arguments - Mike’s Take
• Agent - “I’m 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 don’t 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!”
ARC’s 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, don’t throw valuable / proven business
processes out accidentally.
– Especially ARC ticketing!
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?
• “Don’t worry, your GDS will do it all for you”
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!
More Questions?
Thank you!