Travel Agents: IATA Flexible on BSP Payments but Picks Vouchers Over Refunds

Alexandre de Juniac, the director general and CEO of the International Air Transport Association (IATA), on Thursday said that travel agents can make settlements to the BSP billing system “a bit later”, without penalties, due to the crisis the coronavirus (Covid-19) pandemic has caused to the industry.

“We know that our members and business partners rely on us to recognize the extraordinary challenges they are facing and to show as much flexibility as possible under the circumstances. We are doing our best to meet these expectations without risking the viability of the systems that are the financial backbone of the industry,” de Juniac said in an open letter to the global travel agent community.

Referring to IATA’s electronic billing system BSP (billing and settlement plan), de Juniac said that the association is allowing settlements to be made a bit later, without penalties.

IATA Director General and CEO Alexandre de Juniac.

“While remittance periods have been kept in accordance with BSP Calendars, we are taking a flexible approach and preliminary figures confirm this, showing that default rates in 2020 are a bit below the year-ago period—despite the stresses on the system in 2020,” he said.

Further, IATA’s CEO said the association was allowing agents to continue selling—using secure methods—even when they are late with remittances.

“We also recognize that in today’s environment, when it may be difficult to impossible to get audited financial statements, or arrange a financial guarantee, we are offering to extend deadlines for these statements by up to a month,” de Juniac added.

Vouchers not refunds

On the issue of airlines withholding ticket refunds in the BSP, or issuing vouchers in lieu of refunds, de Juniac said that his message “is not one that will provide comfort” to travel agents.

Stressing that most airlines are spending more cash in reimbursing their passengers than they receive in new booking revenues, IATA’s CEO underlined that the most urgent need of airlines is to keep their remaining liquidity to pay salaries and face their fixed costs.

“In this context, we believe the best answer for both airlines and travel agents is for regulators to ease requirements for cash refunds and allow airlines to issue vouchers instead,” de Juniac said, adding that the vouchers can be managed through the BSP by using processes and procedures that already exist today.

“This would remove the pressure that is currently on agents to issue cash refunds at a time when airlines are making decisions based on their own need to preserve cash,” he added.

According to de Juniac, IATA is willing to engage in open and collaborative discussions with the travel agency community represented in the Passenger Agency Programme Global Joint Council to formulate a structure for these vouchers that will bring value for airlines, travel agents and consumers.

To read Alexandre de Juniac’s open letter to the travel agent community, press here.