travelBulletin

Who really owns the customer?

By Steve Jones

I have a hunch, and a pretty strong one, that few people would disagree with the observation that airlines and agents don’t always see eye to eye.

There are, of course, exceptions and there will be many examples of harmonious relationships where the two work together like brothers in arms.

That harmony certainly appears to exist between the two industry bodies; the International Air Transport Association and the Australian Federation of Travel Agents. For two years, on and off, they were involved in negotiations over changes to IATA’s Billing and Settlement Plan (BSP), the system by which IATA-accredited travel agents transfer money to airlines.

The result of such negotiation led to the agreement of a two-year transition period for a processing restructure that will see IATA reduce the credit given to agents from 14 days to seven.

While hardly catastrophic for agents, retailers will, as AFTA acknowledged, lose “significant” amounts of interest they accrue on trust accounts where client monies are held.

On the surface, airlines seem completely within their rights to demand their money earlier (and this is most certainly a demand, not a request).

But is it really their money? If I buy a Qantas ticket today for a flight to the UK next March, can my $2500 really be considered their money to demand?

Not according to Express Travel Group CEO Tom Manwaring, who argues that the funds remains those of the customer until the product is supplied.

No one is suggesting the cash belongs to the agent. But there is a strong case for arguing that neither does it belong to airlines, yet they are the ones, via IATA, demanding payment earlier.

It’s akin to the age-old quarrel of who owns the customer. Is it the agent or the supplier? The answer of course is neither, and certainly not in this business environment of an empowered consumer.

AFTA has done well to negotiate such a long transition period – it was never going to prevent the BSP change from happening – and IATA had the power to implement this way before 2018. But once again it rather feels as though agents have drawn the short straw.

At the very least it will see several more retailers relinquish their IATA accreditation, a scenario that won’t displease consolidators. As IATA accreditation becomes ever more onerous for agents, the more the likes of Air Tickets and Consolidated Travel will become the principal connection between the trade and IATA. 

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