Iata’s move to require agents to move to twice-monthly BSP remittance has triggered criticism from the Scottish Passenger Agents Association (SPAA).
If approved, the new regime will be implemented on June 1, 2016 to give a lead-in period which will allow agents to adjust their business plans accordingly.
But the Scottish group believes that agents are being penalised for airlines’ failure to institute effective safeguards against instances of agents’ sales suddenly increasing exponentially, as happened in the Airfasttickets failure.
Many believe agents being asked to pay indirectly for the failure of Iata and airlines to manage risk appropriately in these types of failure.
Some agents have already opted for more frequent payments, but the new remittance regime will have a serious impact on the business of most Iata licensed agents, according to a number of Spaa members.
An SPAA spokesman said: “Of course it’s understandable that airlines seek to protect themselves against agency defaults resulting from over-trading or mis-selling, but that does not justify a solution that penalises the vast majority of Iata-member agencies and travel management companies, working hard to pursue best management and financial practice at all times.
“These agencies pay significant fees to Iata and fulfill stringent criteria to be approved for an Iata licence, and as a consequence the pursuit of mutually respectful and transparent long-term business partnership between airline and agent should be at the core of the solution, rather than further financial strictures imposed on the latter.”
Although airline Iata members are protected when an agency fails, agency members enjoy no reciprocal protection in the event of an airline failure – an omission that concerns many in the agency community, according to the SPAA.