The International Air Transport Association (IATA) and the Airlines Reporting Corporation (ARC) are two organizations that handle travel transactions among suppliers, consumers and agencies. An IATA number or an ARC number that is issued to a travel agency is a mark of its legitimacy, and gives it supplier recognition. IATA is a private organization held by international airlines whereas ARC is an air-line owned organization (members being U.S. airlines) offering financial settlement, data and analytical solutions for travel business.
Before the Airline Deregulations Act of 1981, any travel business between agents and suppliers required mandatory membership of the former with IATA or Air Traffic Conference (ATC). The IATA developed a numbering system to issue unique IATA numbers to identify registered travel agents. The Deregulation Act served to end the reign of ATC and banned IATA from doing any business in the international airline industry. The IATA started the International Air Transport Association Network (IATAN) to use its extensive data resource to connect the suppliers to the U.S. travel distribution network.
ARC exists since the implementation of the Airline Deregulations Act that necessitated competition in the U.S. airline industry. ARC, a standardized travel agency system, took over the businesses of IATA and ATC. ARC offers sales and settlement solutions to the travel and hospitality industry. Their customers include travel agencies, carriers and Corporate Travel Departments (CTD). ARC caters to the business needs of the member agencies and participating airlines, such as sales reporting, revenue generation and financial settlement solutions.
ARC accreditation certifies travel agencies to sell travel and conduct business. ARC also certifies qualified individuals as verified travel consultants (VTC) to do nonticketing travel business by providing them with an ARC number. VTC differ from the regular agents in being non-airline appointed travel consultants. IATAN, in addition to approving travel agents for sale of travel tickets, enables IATAN ID card holders to get certain promotional benefits and concessionary incentives from suppliers (participating members) who identify the agent with an IATA/IATAN number as a valid associate. IATA also certifies a referral agent or an affiliate travel agent to find clients for the hosting travel agency’s business needs.
Utility of ARC and IATA
ARC monitors the sale of all airline tickets in the U.S. Accreditation from ARC provides business benefits to the travel agencies, CTDs and carriers. IATA eases claims transactions between the associates and members through the IATA Clearing House or ICH, using the inter-line agreement with the U.S. airline industry. Auto billing feature of the Integrated Settlement or IS, the functional process behind Simplified Interline Settlement is most preferred by the clearing houses of agents and suppliers.