Mumbai: Airlines and travel agents are on a collision course. Yesterday, the International Air Transport Association (IATA) informed travel agents that they would have to remit the ticket sale proceeds to airlines every week, in place of the current fortnightly span. IATA has slated the change to come into effect from June 1, even as agents are demanding a deferment in its implementation.
The proposed change, according to a senior executive with a private airline, would bring about a paradigm shift in the way airline ticketing business is done in India. IATA’s billing settlement plan (BSP) is as a payment gateway for travel agents. Twice a month, agents are required to remit to airlines proceeds from ticket sales. For instance, if a ticket is sold by an agent between the 1st and 15th of a month, the agent deposits the amount to the airline on the 25th or the 30th of that month.
Air India, Jet Airways and Kingfisher, all of which are struggling with mounting losses and finding it difficult to pay their vendors in time, took the lead to secure an approval from IATA to change the billing cycle to seven days from fifteen. A resolution to change the billing cycle in India was approved way back in October last year at an IATA conference attended by all member airlines, though it was only yesterday that the new remittance plan was introduced.
06/04/12 Aneesh Phadnis/Business Standard
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