July 21, 2009
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News: ARTA Fires Back At United
United Airlines has come under fire by the travel industry when it announced last month that it would no longer allow travel agents to use the airlines credit card payment processing account to process card payments. The Association of Retail Travel Agents (ARTA) fired back at the airlines by filing a complaint against United with the Department of Transportation (DOT). The complaint asks for an investigation into the "discriminatory" activities of United's new credit card payment policy. Additionally, ARTA has also requested that the Airlines Reporting Corporation (ARC) to release their position on the matter. General Counsel, Alexander Anolik, alleges that United's underlying purpose into disallowing the use of the credit card payment system is to eliminate agents.
It was established by the Airline Reporting Corporation that ARC be responsible for setting the criteria by which travel agents sell air travel passes and account for the funds from those sales including credit card payments. Furthermore, funds are to be held in a manner that is advantageous for the airline. According to the ARC agreement, the system was to account for both cash and credit card funds. United Airline's actions would place the travel agents in a difficult and costly situation if they did should default. Such a burden would not be consistent with the guidelines set down by the ARC. Additionally, the agreement does not place any responsibility on the part of the agents to authorize their own travel documents and in fact specifically prohibits them from using their own card in the payment process.
Travel agents have already felt a big hit with the rapid growth on online travel sites like Expedia, Orbitz, and Travelocity. Further speculation is that United's move would make agents directly responsible for chargebacks if the airline should go into bankruptcy. The added expense and risks of processing credit cards with their own merchant processing company could put many agents out of business.