travelBulletin

Keeping pace with changes: AFTA view

By Jayson Westbury, chief executive AFTA

For the many travel agencies that continue to hold an IATA accreditation for the purpose of BSP settlement the news of the pending change to the BSP billing settlement timetable in Australia may have come as a bit of a shock.

In part this is because it is difficult to communicate a process that has taken nearly two years to negotiate, and AFTA’s role in communicating the working arrangements of another organisations’ processes.

For IATA it is also difficult to know when to release information about a proposed change during a protracted negotiation. But nevertheless the simple fact is that credit is becoming far more difficult to get worldwide. Many BSP’s around the globe are making significant changes to settlement times as the airlines and IATA work to close the gap on credit.

The BSP needs to keep pace with the modern payment regimes that are now available. What this means for Australia is a shortening of the settlement timetable.

From 1 February 2016 the BSP settlement cycle will be shortened by 3 days, meaning that IATA agents and anyone purchasing tickets from an IATA agent will need to remit the weekly BSP funds to IATA earlier. Presently, the 7 day BSP is settled 14 days later meaning it is a 21 day cycle. From 1 February 2018 (two years time) a further 4 days will be taken off the cycle meaning funds will be remitted to IATA 7 days after the BSP closes.

The reason why there is a timetable associated with this change is to allow agents time to organise themselves for the change. At the time of going to print the IATA Passenger Agency Conference (PAConf/38) has not taken place and this process needs to ratify this change and bring it formally into effect. I don’t see any reason why that will not happen.

Australia remains one of the more consolidated markets around the globe with agents finding it simpler and more convenient to ticket via consolidators. This is not the case in all world markets and the value of IATA accreditation is something that is constantly considered by travel agents as they make their strategic and structural decisions about what works best for their business.

As new forms of payment make their way into the travel industry landscape and options become more open and available to new innovative ways to settle with suppliers one of the biggest challenges facing IATA is to ensure that the BSP remains relevant, fit for purpose and an affordable way for agents to settle with airlines knowing that they have the right mutual protections in place for when things might go wrong. To finish it is important to say that the announcement about this change to the IATA BSP settlement cycle might have come as a bit of a surprise to many, but I can assure you that this has been a protracted and prolonged negotiation with the outcome one of mutual compromise.

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