‘We need to renegotiate IATA terms’

As domestic flights slowly resume, there is an urgent need for agents to get complete clarity on credit shell redemption as well as renegotiate terms with IATA keeping in mind a slackening demand for international travel. Fair and appropriate cancellation policies of airlines would help build passenger confidence.

Hazel Jain

Lucknow-based travel agent and former Chapter Chairman (UP & Uttarakhand), Travel Agents Association of India (TAAI), Sunil B Satyawakta is urging outbound travel agents across the country to rethink their terms with IATA. The Director of Civica Travels says, “It is good that ‘Unlock 1’ has started and domestic flights are gradually taking off. But these are unusual circumstances, especially for international travel and I don’t see bookings happening before October or even November 2020. This is why I feel that all IATA agents should re-negotiate the terms with IATA.”

He explains, “I am expecting that our ticket sales will be down at least 50 per cent in the next financial year. Keeping this in mind, we must ask IATA to bring down our bank guarantee and our targets by a minimum of 50 per cent. Normally, the amount of financial security is based on the agency’s 20 days’ average turnover in the last 12 months.” The submission deadline for Bank Guarantees is June 24, 2020 for the period beginning July 1, 2020 and ending June 30, 2021.

“As circumstances would not change much in the coming 12 months, we must voice this concern to them before the deadline. It will give agents a little solace and comfort, and their liabilities will be a little less,” Satyawakta adds.

Suggestions for redeeming credit shells

Satyawakta also feels strongly that agents need to get complete clarity on the credit shells that lie with the airlines. “It is high time that the airlines spell out if there is any change in their cancellation policies since resuming operations from May 25. It is important for us to know about this quickly so that our clients are briefed of the same while issuing tickets, especially the fate of refunds in case of cancellation of flights,” he says.

He brings up many questions that don’t have clear answers yet. Will credit shells remain? Will the agent be allowed to withdraw money from their airline ID account to refund to passengers if the money is refunded to the agents’ ID? “We all know that credit shells were issued against refunds to passengers because airlines did not have ready money to refund. While we agents were working from home with very limited staff, it was difficult for us to explain and convince our clients about these credit shells against their refunds for the flights cancelled due to COVID-19. It is difficult for us to convince them as to how it is going to work if we ourselves don’t have complete clarity,” he says.

Satyawakta also has suggestions for airlines with regards to the credit shells. “Airlines should also allow refund of difference of fares in cases of down-sell. In case credit shell is used by passenger 6-12 months later, he should be given at least 10% extra value of the amount of credit shell since airlines have enjoyed interest-free money from passengers,” he says.