12/06/2013
The United Federation of Travel Agents' Associations (UFTAA) has urged the International Air Transportation Association (IATA) to consider postponing the introduction of the weekly payment system.
In a letter addressed to Aleks Popovich (Senior Vice President, Industry Distribution and Financial Services, IATA), UFTAA said that their Indian members, TAAI, IAAI and TAFI “alerted” them “to the impending threat in introducing the weekly payment, by IATA accredited agents, in the very near future.”
Earlier in 2011, the airlines, through a vote during the Passenger & Agency (PA) Conference in Singapore, mandated the implementation of weekly period remittance in India, effective July 1, 2012. However, IATA had deferred its implementation to November 1, 2012 after stiff opposition from several travel trade associations in India. The weekly settlement system was then further deferred to June 30, 2013.
“TAAI, IAAI and TAFI strongly feel that the time frame is not sufficient for such imposition, taking into consideration that the current credit cycles are enormous and that credit cards are still not being frequently used,” UFTAA president, Joe Borg Oliver wrote in his letter.
“I am also of the opinion that IATA organizes a meeting with the parties concerned to find an amicable way out that will enhance our future cooperation to our mutual benefit,” he added.
Terming the weekly settlement plan “the last nail in the Travel Agent’s coffin”, Biji Eapen, President, IAAI, told India Tourism Review that most travel agents used to extend more than 30 days credit facilities to corporates.
“Almost 500,000 dependent staff disappearing would ring death knell to the trade. The issue needs meticulously ardent re-consideration. Globally, the decision to implement Weekly Payment is country specific and conducive to the local travel trade. The proposal moved by the Indian carriers was pre-planned and as a part of larger conspiracy to erase more than 80 % of the small and medium travel agents. Ultimately, this may lead to cartelization in the Industry,” Eapen said.
When asked if UFTAA’s suggestion can be implemented in India, Eapen said, “In view of the healthy relationship of IATA with UFTAA and WATAA who represents the travel industry associations can consider such exceptional requests for the benefit of the industry at large. If the Conference determines that the economic and financial indicators may no longer warrant the weekly reporting /remittance system, the Conference shall review its decision.”
“Since, weekly payment was unanimously recommended by APJC-India (by agents representatives), it mandates a new resolution, unanimously passed by APJC – India requesting to defer weekly payment and must prove that India do not support such payment system,” he added.
Eapen concluded saying that the Indian travel trade can still defer the weekly payment plan if they remained united and spoke in a single voice.