IATA row threatens industry status-quo

A furious row has broken out between worldwide travel agency leaders and IATA after the association’s airline members blocked a revised Passenger Sales Agency Agreement.

The Global Consultative Committee (GCC), which consists of eight airline and eight agency representatives, has taken two years trying to bash out a new contract because the existing agreement was thought to be too one-sided in favour of the airlines. But on Friday (June 28) the new deal – which needed unanimous approval – was quashed by the airlines at the IATA Passenger Agency Conference in Miami and the meeting suspended.

Past Guild of Business Travel Agents chairman Don Lunn (left) – who led the European travel agents contingent on the GCC – said the blame for the negotiations’ collapse fell squarely on the airlines. He told TravelMole: “The airline industry wants to go to zero commission/ renumeration but wants agencies to continue to do a lot of work on its behalf. The requirements put on agents are quite onerous. The airlines want all the fundamental obligations to remain in place but not to pay for those services and it is quite unfair and unacceptable.”

But an IATA spokesman told TravelMole that he had been informed that the “intransigence and unrealistic expectations“ of the agency representatives led to the failure of the talks. He added: “The current financial situation facing the airlines doesn’t make this sort of negotiation very easy.”

In a statement the GCC said it was clear that “some members of IATA have no intention of changing the status quo.” It added that it is now calling on agents worldwide to:

– call on their respective governments to review the antitrust immunity granted to IATA members to control the distribution system

-initiate an urgent study into the development of an alternative to the present IATA accreditation system

-establish an industry task force to immediately implement a global alternative to the IATA BSP system

-actively support and participate in legal class actions against airlines

-suspend until further notice all dialogue and consultations within the IATA Agency Programme.

Mr Lunn warned that the large majority of airlines are being manoeuvred out of business by the minority with a vested interest in destabilising the industry. He said this was placing travel agents at risk, as well as airlines who depend so heavily on the IATA Agency Programme for over 80% of their sales.