Travel agent jobs at risk from new payment rules

Travel agent businesses and jobs are under threat from new payment rules being enforced by the airline industry.

This was the warning from the Guild of Management Travel Agents after the airline body, IATA, voted to make agents pay remittance twice a month instead of monthly from 2016.

"The changes present a significant risk to many businesses and their cash flow, meaning there is a real threat to jobs," said GTMC chief executive Paul Wait.

"The addition of further barriers and red tape to businesses that are powering UK economic growth through exports is counter-productive."

Despite widespread opposition from the agent community, IATA yesterday announced it was going  ahead with the new regime.

For some time, airlines have been looking to bring in stricter credit controls to protect themselves from default payments.

Earlier this year, IATA terminated an agreement with US-based agency AirFastTickets claiming it owed over €45 million in late payments.

But agents say the new regime will make it harder for small and medium size companies.

"It is common practise in the UK to have 30, 45 or even 60 day payment terms. 14 day remittance will cause undue financial pressure on successful businesses, especially SMEs," said Wait.

"The GTMC argued vehemently against the need to change the existing IATA payment model. We have stated our disappointment that ‘no change’ was not an option as a result of a directive by the Financial Committee of IATA and its Board of Governors.

"The only options offered were either seven day or 14 day remittance. Very reluctantly, 14 day remittance had to be accepted. The GTMC questions the value of a process that was meant to be consultative."

ABTA chief executive Mark Tanzer said more frequent remittance was not the answer.

"Instead, airlines need to ensure they exercise greater control in their choice of appointed agents," he said.

"IATA and their airline members have been seeking to increase the remittance frequency for several years. We have always maintained that the status quo with monthly remittance should prevail and we are disappointed by today’s decision."

"We understand that IATA and its members want a greater level of credit control, but we do not believe more frequent remittance is the right solution."

But he said he was pleased that the new regime won’t come into place until 2016, giving agents 18 month to prepare.

The changes were originally due to come into force in 2015.

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