Mama

I would not risk being black-listed by any airlines. I have my dignity, but that's just me.

seawolf

It’s like people using corporate car rental/hotel codes they are not eligible for. As much as it is discouraged by FT members, there are always going to be others who will arrive at a different solution to the the risk/reward equation.

dayone

If one wishes to play the "speculative bookings" game, AA is not the arena to play in.

stc

I think the point is that UA would not be happy.

s0ssos

So why would you put your frequent flier number or KTN? Just put minimal information. Or even go through an OTA, so they won't even have your credit card info.

seawolf

You don't have to provide those info but airline will have your credit card even when going thru OTA unless air was part of a package tour.

poisson

Yeah, that's what I meant. I have non-rev access with AA so I would never book a "fake" ticket with them. I could do it with UA or DL, but I suspect they wouldn't like me doing that too often. I guess you could spread the love around and book with AS, DL, UA, and WN depending on the day.

s0ssos

What evidence do you have of that?
Many book via OTA for certain airlines cause they don't have to worry about the credit card check at the airport (eg Taiwanese airlines).

seawolf

Just purchase a ticket on AA from agency and go to airline website to pull the receipt (after 2 business days or so) and see form of payment. For majority of sales (US), the only thing travel agent is doing is passing the card info to airlines for airline to do actual charge. A travel agent refund request is merely agent submitting a refund request to airline for it to refund as money was always with airline to begin with.

https://www2.arccorp.com/globalasset...rdpayments.pdf

During paper ticket days the agency actually ran your card against their own merchant account and then submit funds to airline. If the travel agent fails to remit funds or goes belly up before submitting funds, the airline or passenger is left holding the bag. That risk is reduced/eliminated with travel agent passing credit info directly to airline for payment processing because travel agent never handled the funds.

Pass-thru payment processing model is safer and less time consuming to reconcile for agency and airline.

As you can see from PDF, the travel agent is responsible for documentation/verification that the passenger authorized the charge. Seems like the Taiwanese carrier is essentially doing documentation/verification on tickets issue directly by airline at airport but not doing for OTA issued tickets because that is travel agent responsibility. Nonetheless the airline has form of payment info even on OTA tickets.

Tour operator still take payments directly from passenger and remit funds to airline.

s0ssos

I haven't purchased a ticket from Expedia for a long time, but I recall the charge would be from Expedia. Not from whatever airline it was. Though for Orbitz it would be for whatever airline. Which is all a moot point cause it is all Expedia now.

I find it hard to believe a giant like Expedia would use ARC Corp. Do you have any insight into that? I'd appreciate a link.

seawolf

Expedia would also be on ARC because all the infrastructure for distribution and settlement with airlines is already there (tried and true). If Expedia doesn’t use ARC (or an ARC competitor) they will have to build a whole new distribution channel with every single airlines they want to sell tickets for. Airlines would also have to agree to a new distribution channel should Expedia choose to build one and it will cost airlines money to integrate with this venture. Keep in mind from the airlines’ perspective why would it want to invest in integrating with a new channel if it does not bring a benefit for them which is unique to this new channel to justify such an investment.

Think of ARC as the established credit card networks (VISA/MC/AMEX). Sure a new company can come in and build a brand new credit card network but there is going be challenges both in terms of cost and gaining merchant (eg airlines) acceptance.

s0ssos

From reading about ARC, I wonder if we are talking about 2 separate things.
I was referring to your statement that the airlines get your credit card info because they actually take payment. I was saying Expedia takes your payment (and then pays the airlines). You were referring to ARC as being a payment processor, but here it notes that there are 2 scenarios, one where agent is merchant of record, and one where airline is merchant of record.
Using your analogy of a credit card network, who is the consumer in the ARC example and who is the merchant?

seawolf

I think we might be talk about two different things but let me rephrase.

Under the airline as merchant model, the payment processor is the "acquiring" bank where airline keeps their card card merchant account.. Travel agent (TA) passes credit card info to airline via GDS. Airline authorizes card. If authorization is not successful, no ticket is issued. Transaction is then posted against that authorization and acquiring bank pays airline. Money never touched TA. No risk to airline/passenger if TA fails.

Under TA as merchant of record, TA authorizes and gets paid via TA's acquiring bank. They have to settle up with airlines for ticket issued via BSP/ARC. If TA fails to do that, passenger/airline is at risk. In order for TA to operate with tis model, they have to post bond and/or meet reserve minimum balance requirements to reduce chances of default.

You mentioned earlier Expedia not participating in ARC. It's not effective for them to cut ARC out because that would mean Expedia will have to build IT integration with every airline they sell for in order to send credit card info over (diagram in article you linked credit card info goes thru BSP/ARC before hitting airline's acquiring bank). So let's say Expedia sells for 50 airlines. They will have to somehow get that credit card info to all 50. BSP/ARC is giving them a single point of contact instead of dealing with 50 points of contacts for passing credit card info.

Similar challenge under TA merchant of record model. Expedia has to somehow figure out how to pay 50 airlines. Is it by check? Is it by wire? If by mail, where do you mail to? If by wire, where do you sent it to? Who do you call if there is a problem with payment? TA will now have to maintain payment instructions for 50 airlines. BSP/ARC is offering them a single location to remit funds to instead of 50 locations.

This is just one travel agent. Now imagine AMEX travel (or Orbitz/Travelocity - pre acquisition by Expedia) wanted to do the same? That will be a lot of duplicate IT infrastructure work for IT teams of travel agents and airlines worldwide without BSP/ARC.

Going back to my prior post. Is it possible for Expedia to cut ARC out? Sure, but from the perspectives of 50 airlines', why would they want to change their systems for Expedia where there already is a tried and true industry standard in use and they don't get any benefit out of making such a change?

poisson

Today I got to the airport a bit early so I figured I could spend some time at the lounge. I was flying AA non-rev, so I booked a miles flight on Delta, checked in and generated the boarding pass, then cancelled immediately after getting into the lounge. So this method does work but it's not something I would do a lot as most airlines probably wouldn't like many cancellations.