Travel agents in Colombo, shocked to find out on Thursday they would be compelled to reduce their payment period to airlines from the present 10 days to a seven day period, during an emergency meeting, resorted to seek legal advice for a resolution of this matter. “It’s a shock for the travel community,” International Air [...]

The Sundaytimes Sri Lanka

Travel agents get tough with IATA

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Travel agents in Colombo, shocked to find out on Thursday they would be compelled to reduce their payment period to airlines from the present 10 days to a seven day period, during an emergency meeting, resorted to seek legal advice for a resolution of this matter.
“It’s a shock for the travel community,” International Air Transport Association Agents Association of Sri Lanka (IATA –AASL) President S. Paramanathan said on Thursday in an interview with the Business Times. IATA accredited travel agents use a business settlement plan (BSP) through IATA’s network when making payments on airline reservations.

IATA sent a response from Singapore on Wednesday evening stating they would not go back on their decision to implement a seven day payment period from the existing 10 day period.

Civil Aviation Authorities in Sri Lanka wrote to IATA insisting that they allow the 10 day payment period to be retained for the travel agents in Colombo citing it as a ruling given by the local authorities and had further stated that the law of the land supersedes all implementation/decisions of IATA.

In this backdrop, during an emergency meeting of the IATA-AASL on Thursday afternoon agents remained adamant on the 10 day payment period and requested to seek legal advice on the matter to resolve the issue.

Mr. Paramanathan noted that in this respect, the association sent a response to IATA in Singapore on Friday requesting them to abide by the ruling given by the local authorities as it was impossible to “bend the rules of the land.”

Agents accrue total sales amounting to Rs.2.8 billion with remittances for SriLankan Airlines at 30-35 per cent of the sales and rest for foreign carriers.

Mr. Paramanathan pointed out that should the seven day period be implemented it would amount to a large loss in foreign exchange for the travel agents.

Further, he said that with Sri Lanka having an increased number of holidays the weekly settlement for five working days would be difficult.

It was pointed out that this would amount to adding pressure on the agents as they would be compelled to work on a higher bank overdraft level that would cause a reduction of the profits to their organization. This would have a ripple effect amounting to either cuts in staff bonus, increments or reduction of staff altogether, Mr. Paramanathan explained.

In 2006 IATA-BSP managed to convince the airlines not to trade with any travel agent which has not obtained the IATA accreditation as a result of which all travel agents were forced to join this payment system.




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