7 Ways ARC Can Help Your Airline Better Manage Debit Memos
In 2017, ARC participating airlines issued more than 500,000 debit memos worth $123 million. Through June 2018, nearly 290,000 debit memos worth $67 million have already been issued, 50 percent of which remain unresolved. In fact, nearly $5 million worth of debit memos are already more than 90 days old.
Recovering millions of dollars in debt isn’t an easy task, especially for airlines whose varying, complex policies can be difficult for agencies to keep track of, clearly understand and follow. For many airlines, the debit memo resolution process is often laborious and time-consuming. Too frequently, expended energy results in limited or no real return. Memos often require in-depth research, and then an airline is tasked with contacting the right individual at each agency – a massive undertaking when the number of agencies can run into the thousands.
For many airlines, the recovery process is often about navigating the best of a tough situation. On one hand, an airline can choose to outsource to a third party with limited industry experience and an ambivalence toward the airline-agency relationship. On the other hand, an airline may prefer that its sales and account management teams play a centralized role, making the revenue calls themselves. Unfortunately, these conversations can also place an unnecessary level of strain between the airline and agency, taking away from valuable time that could be better spent building the relationship.
However, there is a third way.
ARC’s streamlined, cost-effective solution – Revenue Recovery Service (RRS) – is designed to help airlines affordably recover on open memos, while also maintaining the integrity of the airline-agency relationship. As a leader in air travel distribution, ARC truly understands the complexities of debit memos from the perspective of both airlines and travel agencies, and has a proven track record of helping both parties connect, grow and thrive.
In 2017, ARC facilitated 230,000 memos worth $94 million for 76 airlines. With RRS, airlines successfully resolved nearly 70 percent of their debit memos in less than two months.
Here are just a few ways ARC can help you and your airline better manage debit memo recovery with RRS:
1. Increased ADM recovery
ARC gets working the instant an airline designates a memo to RRS. On average, more than 67 percent of memos are resolved and airlines enjoy a speedy resolution rate, averaging 60 days to close (even when memos are more than 90 days old).
2. Preserved agency relationships
With ARC handling recovery activities, RRS helps preserve the airline-agency relationship – taking difficult conversations out of the equation and freeing up your team to focus on other areas of the relationship. Recovery agents are located within the United States and have an average of 16 years of experience.
3. Customizable resolution rules
Each airline has the opportunity to customize its policies for recovery services, including the flexibility to exclude specific agencies from the process, delay memo assignment to RRS or exclude memos based on dollar value.
4. Ticketing privileges
ARC handles recovery of memos that fall under breaches of the Agent Reporting Agreement (ARA), such as an unreported sale or a credit card chargeback. If memos aren’t resolved, ARC has the ability to revoke ticketing privileges on behalf of an airline.
5. Recovery options
ARC offers a variety of recovery options, including on non-ARA memos (e.g., fares, taxes, refunds, exchanges and commissions) between 10 and 90 days and/or on memos older than 90 days.
6. Comprehensive reporting
By combining RRS with ARC’s other memo solutions, Memo Manager and Memo Analyzer, airlines can more quickly and effectively manage, analyze and resolve memos. This comprehensive view allows for the isolation of debit memo drivers and helps identify opportunities where additional action may be needed. Additionally, airlines receive detailed reporting on all open, closed and paid memos, as well as escalated memos.
7. Higher ROI
Airlines pay for performance — i.e., they only pay on memos resolved and recovered. It’s as simple as that.