What is an ARC bond?
An ARC bond is required by the Airlines Reporting Corporation to become an accredited travel agency. The bond protects the Airlines Reporting Corporation and their carriers from non payment by your agency. Additionally, these bonds may offer payment when the terms of your Agent Reporting Agreement are not met. Becoming an accredited agency allows you to issue airline tickets through the ARC’s global distribution system or GDS.
What ARC bond amount does my travel agency need?
Initially, your ARC bond amount must be $20,000. That amount may change based on your use of the system. In some cases, your bond amount may be lowered $10,000 or raised by the ARC after your second year of appointment with the corporation.
Who is the Airlines Reporting Corporation?
The Airlines Reporting Corporation or ARC is a private company. They provide settlement services to the airlines and travel agencies. Think of the ARC as the PayPal of air travel. They handle the payments from the travel agent to the airlines. Additionally, they use the data from the transactions to offer airline ticket statistics and products to its partners.
How does my travel agency get accredited with the ARC?
Please visit our How to get Accredited with ARC page to view a step-by-step guide.
How does an ARC bond work?
ARC surety bonds are meant to protect the Airlines Reporting Corporation and its airlines. As with most surety bonds, there are three parties to this bond form:
- Principal – Your travel agency;
- Surety – The surety company who agrees to write your bond; and
- Obligee – The Airlines Reporting Corporation.
The bond form states that the principal (you) must pay all monies owed to the obligee (ARC). If not, the surety company could be responsible to pay any amounts due to the obligee (ARC) on behalf of the principal (you). However, the surety company’s payments are limited by the bond amount in place with the ARC.
It’s very important to understand that surety bonds are different from insurance policies. A surety company expects to be paid back by the principal (you) for any amounts paid to the obligee (ARC) and other costs. Your responsibility to reimburse the surety company is covered in your indemnity agreement.
How much does an ARC bond cost?
The ARC bond cost will depend on your personal credit score, experience, and possibly your financial condition. These bonds are more risky than other surety bond types because they are a form of payment guarantee. Surety companies often experience a high claims frequency on this class of business as well. Listed below are examples of prices to help estimate your bond’s cost:
- Excellent credit and industry experience: 2-4% of your surety bond amount
- Average to below average credit and experience: 4-10% of your surety bond amount
Using the estimates above, a $20,000 ARC bond could cost between $400 and $800 for those travel agents with excellent credit. On the other hand, those travel agents with less than excellent credit and experience may expect to pay between $800 and $2,000. The best way to find your bond cost is to apply online for a free quote.
How do I apply for an ARC Bond?
- Complete our online ARC Bond application, or
- Download and complete our printable ARC Bond application, and
- Receive your surety bond quote in minutes!
View our other Travel Agent Bonds