Carrier Fraud Prevention SeminarShelly Younger, Product Development Manager

June 24, 2009

ARC Revenue Recovery Service

A Comprehensive Approach toBillings & Collections for Travel Agent Fees

What’s the Objective of RRS?

• Provide Carriers with critical tools to improve Revenue Integrity:

Source: Airline Revenue Integrity Group www.arigroup.org

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

What is ARC Revenue Recovery Service (RRS)?

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

• Complete management of end-to-end collections of:• Debit Memos• Credit Card Chargebacks• Cargo• Returned drafts• Other unpaid receivables

• Scalable, “menu-driven” suite of products• ARC Memo Manager• ARC Ticket Resolution Service• ARC Resolution Service (First Party Collections)• Third Party Collection Service

What is ARC Revenue Recovery Service (RRS)?

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

Service ARC Activities

ARC Memo Manager System operations and maintenance

ARC Ticket Resolution Service Management and collection of debits that violate the ARC Reporting Agreement with travel agents

Use/match service to identify unreported sales (includes collection activities)

ARC Resolution Service Outreach to travel agents to facilitate the resolution of unpaid debit memos between 30-90 days old.

3rd Party Collection Service Collections on debts over 90 days or referred to 3rd party

What is ARC Resolution Services?

• Carrier must communicate ARC’s authority to their Agents directly; ARC will also provide clear communication of all processes to Agents

• Collection treatment process will vary depending on type of item being collected• Debits covered by Agent Reporting Agreement

(unreported sales and improperly reported sales) will escalate to ARC Risk Management, and if unpaid, can lead to an agent losing accreditation status

• Debits not covered under ARA will be worked until deemed uncollectable…carrier decision at that point, i.e. specific revocation

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

ARC Revenue Recovery Service Process Flow

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

1. CarrierGenerated

File

2. DataLoaded intoARC Memo

Manager

5. MemoResolved in 30

Days?

6. Memo Closed inAMM

Yes7. ARC Begins

ResolutionActivities

No

8. AdditionalInfo Needed?

3. MemoDisputed?

4. Carrier Workswith Agent to

ResolveYes

9. ARC Works withCarrier and Agent

to ExchangeInformation

Yes

10. Agent PaysMemo in Full?

11. Memo Closedin AMM

No

Yes

12. Memo Movesto 3rd PartyCollections

No13. MemoResolved?

14. Memo Closedin AMM

Yes

15. MemoReferred to Carrier

for AgentDisposition

No

16. Memo Closedin AMM

No

Why will ARC be successful?

• ARC settles $80B a year between Agents & Carriers• We have strong relationships and authority with agents• ARC has collections expertise

• Senior Management and staff have significant experience in collections in multiple industries

• Recently upgraded the collection staff to professional collection specialists

• ARC Memo Manager well established, provides the platform to launch RRS

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

RRS Foundation – Memo Manager

• Memo Manager has become the US standard in less than two years

• Memo Manager being widely adopted by Carriers• All majors & 90% of all ARC sales volume under contract• Median # of days for memo payment: 39 days• Average memo amount ~$250

• Agents have largely embraced Memo Manger• Larger agencies pressuring Carriers to adopt AMM• Like ability to dispute & easily communicate with history• Like the efficiencies for payment through IAR

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

Agents and Carriers resolving ADMs

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

Inactive (aging criteria exceeded)(1%)

In Dispute(5%)

In Progress(41%)

Resolved(53%) * As of 5/28/09

The longer a memo “sits,” the less likely payment will be made…

The Cost of Waiting

94%

85%

74%

58%

43%

27%

14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

30 60 90 180 270 360 720

Days Past Due

Deb

ts C

oll

ecte

d

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

RRS Deliverables & Commitments• ARC manages the entire process, end-to-end

• Ensure memos properly loaded into AMM• Facilitate memo transfer through various stages of process• Direct collection activities by memo type

• ARC will provide a monthly closed memo report providing a listing of the memos closed and the monies received during the month

• ARC will provide a monthly Memo Manager snapshot report that details the number of memos and outstanding balance by age range

• ARC will make 5 or more contacts during the resolution activity phase and document each contact in the contact management system

• Final results documented in Memo Manager

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

Next Steps ?• Finalize processes

• Sales collection authorization process• Information exchange on carrier’s policies • Authorization to make payment plans and final settlement • Identify carrier contacts if we need to have unusual payment plan approved, or if

other issues arise and ARC needs to consult with someone

• Finalize pricing and Execute Contract• Consolidate Memo Manager, TRS, and resolution services into a single ARC

Revenue Recovery Service agreement

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.

Thank You

For details about Revenue Recovery Services, please contact:

Sarah Sager

Product Manager

Industry Products & Services

ssager@arccorp.com

703.816.8183

ARC PROPRIETARY AND CONFIDENTIAL. This document includes confidential information that is proprietary to Airlines Reporting Corporation (ARC). Disclosure of this document or any information contained herein to third parties is prohibited without the prior written consent of an authorized ARC officer. Obsolete versions of this document should be destroyed in a manner to prevent compromise of the information, e.g., shredding.