Mark Pestronk
Q: My agency received a very large airline debit memo (high five figures). Using ARC's Memo Manager, I have tried to explain that the debit memo is a mistake, but I can't get a real response from the carrier. If I could just get someone with a brain to focus on the issue, I'm sure that we could resolve this quickly. Is my problem a common one? Is there some mediation or arbitration procedure that I could start? Is there a way I can compel a response? What are my realistic options at this time?
A: Your problem is all too common. Unless your agency is a very large one (e.g., $20 million or more in ARC sales), most airlines' responses in Memo Manager will say something like, "Dispute denied. Debit memo must be paid," and they will never really focus on your defense.
You stand a somewhat better chance of getting a reasoned response if you are part of a consortium, franchise or host agency that is big enough to have some clout with the carrier. Although it probably cannot make the debit memo go away, it can at least ask its carrier rep to look into the matter and report back.
Another option is to get an attorney to write a formal letter to the carrier on your behalf. This route is sometimes successful, especially if the attorney knows someone in the carrier's in-house legal department.
Unfortunately there is no available process such as mediation or arbitration, unless the carrier agrees in advance to participate in the process. In my experience, this never happens.
Nevertheless, there is indeed a way to compel the carrier to provide a substantive response, but it is expensive. You could hire an attorney to file a lawsuit for a "declaratory judgment," which is a binding court order that declares the rights in the particular controversy.
During the case, the carrier would have to provide answers and documentation in support of its position. Unfortunately, even if the judge rules that you don't owe the debit memo, you cannot be reimbursed for your legal fees.
Sometimes, your most realistic option is to do nothing and wait to see what, if anything, happens. I am familiar with cases where the carrier did not lift the agency's plate (i.e., remove the agency's right to issue tickets on that carrier) and carried on with business as usual.
More probably, the carrier will lift the agency's plate and instruct your GDS that your agency is not allowed to issue any more tickets on that carrier. In many cases, that outcome is not so bad, as you may not need to issue tickets on that carrier.
In my experience, carriers rarely take the next step and sue the agency for the alleged debt. So, if you are willing to give up your plate on that carrier, your problem may be solved.
By the way, unless the debit memo is due to your fraud or nonpayment of tickets, ARC will take no action against you.