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A move to stricter payments terms for Iata-accredited agents was given the green light today at a meeting of the association’s Agency Programme Joint Council.
The move was opposed by trade body Abta, which sits on the APJC, having argued that it wanted to see the status quo of monthly payments maintained.
However some airlines, thought to be mainly from the US and the Middle East, have sought to bring the UK into line with the rest of Europe.
This follows a number of significant losses for airlines working with Iata agencies, most notably AirFastTickets, which was subject to a £14 million default in the UK.
A source confirmed the decision for new Iata members to pay weekly from 2015 and existing agencies to move to fortnightly payments from 2016.
One concession has been that the change will come in from 2016, as opposed to next year, for existing members.
The decision was said to be not unanimous and for it to be given final approval it will have to gain unanimous support among airlines at a future Iata symposium. Agency groups are expected to continue lobbying airlines.
The APJC operates under a strict confidentiality agreement, but Abta has confirmed the decision made at a meeting today.
An Abta spokeswoman said: “Iata and their airline members have been seeking to increase the remittance frequency for several years.
“We have always maintained that the status quo with monthly remittance should prevail and we are disappointed by today’s decision.
“We understand that IATA and its members want a greater level of credit control, but we do not believe more frequent remittance is the right solution; instead, airlines need to ensure they exercise greater control in their choice of appointed agents.
“Abta has argued strongly that Iata agents must be given sufficient time to plan for implementation of any changes.
“We are at least pleased to see that agents will be given 18 months before the remittance frequency increases in June 2016 – giving agents a transition period to prepare for and mitigate the impact of the new regime.”
Ken McLeod, corporate director at Advantage Travel Partnership said: “The decision is one thing, but the whole lack of transparency is another.
“It’s not the fault of the agencies involved on the APJC, but the Iata requirement for non-disclosure on the subject to allow other interested parties to be involved is insulting to Iata agencies UK wide.”
“It’s not the fault of the agencies involved on the APJC, but the Iata requirement for non-disclosure on the subject to allow other interested parties to be involved is insulting to Iata agencies UK wide.”
The move to fortnightly payments will largely impact the business travel agency sector, although it will have an effect on leisure suppliers who are Iata-accredited.
Last month sources in the industry told Travel Weekly that they feared the move would force some agents out of business.
“Many [agencies] will not receive more credit from their bank, so they either go bust or pay additional cost for borrowing or servicing by card. Each of these methods takes profit away from the agency,” said one.
Kevin Thom, speaking in his capacity as managing director of QA Travel, said: “For the vast majority of independent TMCs this could have a very damaging effect on cash flows.
“It could potentially, for some, be the straw that breaks the camel’s back. It could result in some agencies going bust, which is the reason IATA want to implement this in the first place so they could protect the airlines from such events.
“Iata agencies pay fees to Iata and have to fulfil stringent criteria to be approved for an Iata licence, yet Iata do not fairly represent or protect the agency community or its clients.”
It is understood that airlines pushing for change were threatening to force through weekly payments if the APJC did not accept the move to fortnightly.