The airline ticket payment system between carriers and intermediaries is near collapse, according to the
European Travel Agents' and Tour Operators' Association (ECTAA).
In a letter to the European Commission, the organization 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.
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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 March 31 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.”
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 E.U. 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 organization 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.