The Airline Reporting Corporation (ARC) allows travel agents who are authorized by the ARC to book flights for their clients now and pay later. It would not be feasible for the travel agent to pay for every flight they book as they book them. The travel agent is required to execute an ARC carrier services agreement, which governs their contract with the Airline Reporting Corporation. Right now, a condition of the ARC carrier services agreement requires the party to the agreement to post financial security. Financial security can either be a cash deposit with the ARC, a letter of credit issued by a bank, or a surety bond.

In my experience, the easiest way to obtain financial security for this is through a surety bond, and that’s where I come in. The surety bond guarantees that you’ll pay the ARC all funds due, whether it’s through valid tickets or other instruments of value issued in both paper and electronic versions, unless the party to the agreements is relieved of paying for those documents. 

The bond itself is an extension of credit and is issued easily. You would contact my office, provide me with some basic financial information about your company, fill out a bond application, and send it to my office. Once received, we would work to have the bond approved.

The bond guarantees that you’re going to have to comply with the contract and pay all monies due as directed by the ARC to carriers when they’re owed. And again, the bond is a simple, straightforward process. The bond application serves as the indemnity agreement. 

My office will generate an invoice that you must pay before the issuance of the bond. Once my office issues the bond, you are required to sign the original and have your signature notarized before filing the bond with the ARC. My office does not handle the filing of your application or the bond itself. Those tasks are your responsibility.

Again, since the bond is freely issued, going with this, versus a letter of credit deposit and cash, is quicker and easier and there are fewer hiccups and hang-ups compared with the other two options.

If you would like to discuss this matter, give me a call today, and we can go over any additional questions you may have.

Neil Pedersen
15 Maiden Lane Suite #800
New York, NY, 10038

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