The airline
ticket payment system between carriers and intermediaries is near collapse,
according to the European Travel Agents' and Tour Operators' Association.
In a letter to
the European Commission, the organisation says that the IATA Billing and
Settlement Plan, the mechanism for settling the sale and refund of tickets for
the indirect channel, is on its knees.
Pawel
Niewiadomski, president of ECTAA, says billions of Euro in refunds,
because of the COVID-19-related cancellations in recent weeks, are now due to
agents to enable them to pay back their customers.
Airlines,
however, have stopped the automatic refund process, leaving agents unable to
refund customers.
The seriousness of the situation was also highlighted last week by
France-based online travel agency MisterFly in an open letter to IATA's CEO,
published in French newspaper L’Echo.
Like
MisterFly,
ECTAA goes on to say that agents are still being forced to meet payment
obligations for BSP.
“In
practical terms, if IATA remains allowed to require payment in cash on 31 March
for all tickets issued, including those in the meantime cancelled or in the
process of being cancelled (as a result of a decision of the airlines or of the
governments), accredited agents will only, if at all, obtain a credit in a
distant future BSP remittance.”
RELATED: BTA urges airlines to stick to refund rules
It
goes on to highlight the potential for customers to be owed billions of Euro in
unpaid refunds.
ECTAA,
which represents 70,000 agents and operators in Europe, claims airlines are not
respecting EU regulations that require them to refund air tickets and issue
non-refundable vouchers.
“There
are no reasons for airlines to breach the law: all companies in the travel
industry are fighting hard to survive this crisis that will last months."
The
organisation says IATA does not appear to understand how grave the situation is
and calls on the European Commission to postpone the BSP deadline and provide a
guarantee, backed by state aid, to cover all “entitled refunds.”
Earlier
this week, EUTravelTech,
which represents the digital travel and distribution sector, called on the EC
and member states to include the whole travel ecosystem in any measures
taken to help hotels and airlines.
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This article first appeared in Business Travel News' sister publication PhocusWire