In its continued effort to lessen the number of debit memos processed between airlines and travel agencies, the ARC-facilitated Debit Memo Working Group Steering Committee (DMWG) will focus their efforts in 2015 on standardizing the reasons under which debit memos are issued. Normalizing reasons is key in allowing a more accurate analysis of why debit memos are issued, which is currently a challenge due to the myriad of diverse reason terms used throughout the industry. The ultimate goal of this effort is the reduction of debit memos.
In 2014, nearly one-half million debit memos worth $138 million were issued. Half of those memos were related to fares, taxes or commissions. But, because these general categories did not classify a particular issue, it is virtually impossible to identify where precise action can be taken to reduce or eliminate specific debit memos. The DMWG will work this year to create two-tier reason categories to remedy this issue.
The DMWG decided to standardize reasons at their October 2014 meeting held at the ARC Travel Connect conference in Washington, D.C. At that time the DMWG felt, for example, that the category labeled “Incorrect Commission” was too broad a term. Some proposed solutions to narrow the reason were, “commission on original ticket,” “commission on exchange ticket,” and “commissionable-incorrect calculation.” Among sub-categories suggested for commission-related reasons, “tour code/ticket designator,” “routing,” “class of service,” and “interline.” Specific terms as these will be expanded throughout the debit memo process as the year progresses.
The DMWG is comprised of representatives from stakeholders and other interested organizations from across the industry. These include 10 airlines that issue the majority of debit memos, travel agencies ranging from sole proprietorships to mega-size, IATA, GDSs, ATPCO, and ASTA.