Agency debit memo
An agency debit memo (ADM) is a document issued by an airline through the Billing and Settlement Plan (BSP) or the Airline Reporting Corporation (ARC) to charge a travel agency for an adjustment, typically due to an error or policy violation. It’s a formal notice that the airline is claiming money back from the agency after an e-ticket has been issued.
An ADM can occur for various reasons, such as
- incorrect fare calculation;
- improper use of a fare basis code;
- under-collection or misapplication of taxes, fees, or surcharges;
- misuse of a commission;
- booking irregularity in a Global Distribution System (GDS), like duplicate or inactive segments;
- credit card chargebacks; and
- unreported sales.
Each of these issues can cause financial losses or operational disruptions for airlines. For example, incorrect fare calculations or missed surcharges reduce ticket revenue, while commission misuse or unreported sales create accounting imbalances.
By issuing ADMs, airlines recover lost revenue, maintain accurate reporting, and ensure that agencies follow established fare and ticketing rules.
Travel agencies usually have a 14- to 15-day window after receiving an ADM to submit a dispute if it was issued in error. The dispute process is managed through BSPLink or ARC’s systems, where supporting documentation is uploaded for review. Proper training, periodic audits, and adherence to airline ticketing and fare rules help agencies minimize ADM occurrences.
