ARC Shifts Airline Settlement to Orders-Based Model, Signals Distribution Evolution

Event summary

  • Airlines Reporting Corporation (ARC) launched an orders-based reporting and settlement system, marking a shift from its traditional ticket-based model.
  • The new system supports real-time data exchange, expanded reporting and analytics, and handles orders with cash payments.
  • ARC collaborated with advisory councils of airlines, travel agencies, and technology providers to develop the system.
  • George Bryan joined ARC in January as Head of Orders, signaling a focus on this new initiative.
  • ARC processes over $100 billion annually in U.S.-based agency air sales and manages a dataset of over 24 billion passenger flights since 2015.

The big picture

ARC's move to an orders-based system represents a fundamental restructuring of airline distribution, driven by the increasing complexity of ancillary services and a desire for greater transparency and control for both airlines and agencies. This shift aligns with the broader trend of airlines seeking to bypass traditional GDS intermediaries and adopt more direct retailing models. The success of this transition will be a key indicator of ARC's continued relevance in a rapidly evolving travel ecosystem.

What we're watching

Adoption Rate
The speed at which airlines and travel agencies adopt the orders-based system will determine its ultimate impact on ARC's processing volume and revenue, and could reveal underlying resistance to change within the industry.
GDS Integration
How ARC navigates integrating the new orders system with existing GDS infrastructure will be crucial, as friction here could limit adoption and create competitive disadvantages.
NDC Expansion
The extent to which ARC’s support for NDC transactions expands beyond this initial release will indicate its commitment to modern airline retailing and its ability to attract airlines embracing direct distribution.

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