Plans by Iata to impose stricter payment terms on accredited third parties in the UK are to be strongly opposed by the trade.
Travel Weekly understands the international airlines trade body has begun a process to bring the UK in line with other parts of Europe, moving from monthly to weekly payments under Iata’s Billing Settlement Plan (BSP).
The issue is not new but the trigger for change is understood to have come from airlines left out of pocket following online retailer AirFastTickets’ €45 million default, issued by Iata in June.
According to industry sources, one major US and some Middle Eastern carriers took the biggest hit, while others, including British Airways, had mitigated their exposure to AirFastTickets.
One source, who confirmed Iata was considering the BSP change, described the AirFastTickets situation as “manna from heaven” for airlines who want agent payments more quickly.
“Iata is concerned about losses, but these airlines could clearly see what was going on [with AirFastTickets] and did not take action to stop it,” he said.
Another source claimed BA was opposed to weekly payments. It is understood a counter-proposal was put to Iata that airlines should be bonded.
Talks are said to be taking place behind closed doors at Iata. A sub-committee of the UK’s Agency Programme Joint Council – the industry liaison group – is due to report within months.
Any change to the BSP is likely to be approved by Iata in June 2015, leaving companies just months to adapt to what was described as a “fundamental change” that could take years to evaluate.
Travel Weekly has learned that some Iata-accredited leisure suppliers have deep concerns but the biggest impact would be on corporate travel agencies.
Ken McLeod (pictured), Advantage corporate director, said the UK operated very differently to other European markets, adding: “We’ve got enough fundamental change coming without the need for change to the way BSP works.”
An Abta spokesman said: “We would like to see the status quo maintained.”