14 April 2009
A few days after issuing directives threatening the very existence of many travel agencies in the UAE and the GCC, the International Air Transport Association (Iata), said the move will positively impact the region's travel industry.
As per the Iata directive all agencies in the region working under the SSIs (Sponsored Sales Intermediaries) had until December 31, 2009 to apply for Iata accreditation to run their businesses. But now the aviation body has mandated an implementation date of 2010 enabling existing SSIs enough time to change their participation status to either Iata-accredited agents or General Sales Agents (GSAs).
The move, opposed by most travel agents in the region, would eventually prove to be beneficial for them, according to a senior Iata executive. "This is the only market in the world with SSIs and we are confident that with the agents' co-operation we will be able to align the Gulf market with the world markets," Dr Majdi Sabri, Iata's Regional Vice-President, Middle East and North Africa, told Emirates Business.
Listing out the benefits for travel agents, Sabri said: "They will have a stronger identity and brand due to their affiliation with Iata and will be introduced to the world's international scheduled airlines with a unique identification code in the travel industry. They will also have a single standard agreement that simplifies their business, and allows them to sell most airline products without having to negotiate a separate contract with each individual airline."
With regards to bank guarantees, Sabri said Iata agents provide a single industry financial security while SSIs are required to provide individual bank guarantees to every airline to receive ticketing authority, representing a huge financial burden. "Importantly, the consumer benefits from a financially secure and well regulated travel agent environment," he said.
Travel agents, on the other hand, seem to have largely succumbed to Iata's decision. "Travel agents have no authority to dispute Iata's decision. The new regulation is bound to come in. So we will just be wasting time if we try and fight it. We may as well accept the inevitable," said V Jayaram, Managing Director of Sharaf Travels.
He added that Iata's move is not likely to negatively impact the travel agents in the region. "There will be no impact as such. The situation of SSIs has been unique to this part of the world so far, and now we would be alligning with the world practice. It is after all in the larger interest of the travel industry," Jayaram said.
Samer Ascha, General Manager, Skyline Travel Tourism and Shipping, said: "The only thing travel agents can do is buy some more time from Iata. It is a regulation by Iata that has to come in eventually. So, we cannot really fight it."
He said the new rule will bring along with it "additional financial responsibilities" for travel agents.
According to Iata, about 40 per cent travel agents in the Gulf are Iata-accredited agents at present. "And the number is increasing daily as many SSIs are voluntarily migrating to full Iata accreditation by knowing the benefits resulted from such participation," Sabri said, adding that Iata accredits travel agencies to "reduce the financial risk" posed to airlines participating in the BSP (Billing Settlement Plan).
Effective January 1, 2010 only GSAs (who issue tickets on behalf of a given airline) or Iata-accredited agents will be able to participate in the BSP in the Gulf, Sabri said. "The change only affects SSIs," he said.
However, this is not Iata's decision, Sabri said. "The local criteria for agent participation in BSP is determined by the local Agency Programme Joint Council a body of airlines and agents with equal representation (in the case of Gulf: 18 representatives with airlines and agents having nine representatives each) that discuss and where necessary vote on proposals such as changes to existing criteria," he said.
A few days after issuing directives threatening the very existence of many travel agencies in the UAE and the GCC, the International Air Transport Association (Iata), said the move will positively impact the region's travel industry.
As per the Iata directive all agencies in the region working under the SSIs (Sponsored Sales Intermediaries) had until December 31, 2009 to apply for Iata accreditation to run their businesses. But now the aviation body has mandated an implementation date of 2010 enabling existing SSIs enough time to change their participation status to either Iata-accredited agents or General Sales Agents (GSAs).
The move, opposed by most travel agents in the region, would eventually prove to be beneficial for them, according to a senior Iata executive. "This is the only market in the world with SSIs and we are confident that with the agents' co-operation we will be able to align the Gulf market with the world markets," Dr Majdi Sabri, Iata's Regional Vice-President, Middle East and North Africa, told Emirates Business.
Listing out the benefits for travel agents, Sabri said: "They will have a stronger identity and brand due to their affiliation with Iata and will be introduced to the world's international scheduled airlines with a unique identification code in the travel industry. They will also have a single standard agreement that simplifies their business, and allows them to sell most airline products without having to negotiate a separate contract with each individual airline."
With regards to bank guarantees, Sabri said Iata agents provide a single industry financial security while SSIs are required to provide individual bank guarantees to every airline to receive ticketing authority, representing a huge financial burden. "Importantly, the consumer benefits from a financially secure and well regulated travel agent environment," he said.
Travel agents, on the other hand, seem to have largely succumbed to Iata's decision. "Travel agents have no authority to dispute Iata's decision. The new regulation is bound to come in. So we will just be wasting time if we try and fight it. We may as well accept the inevitable," said V Jayaram, Managing Director of Sharaf Travels.
He added that Iata's move is not likely to negatively impact the travel agents in the region. "There will be no impact as such. The situation of SSIs has been unique to this part of the world so far, and now we would be alligning with the world practice. It is after all in the larger interest of the travel industry," Jayaram said.
Samer Ascha, General Manager, Skyline Travel Tourism and Shipping, said: "The only thing travel agents can do is buy some more time from Iata. It is a regulation by Iata that has to come in eventually. So, we cannot really fight it."
He said the new rule will bring along with it "additional financial responsibilities" for travel agents.
According to Iata, about 40 per cent travel agents in the Gulf are Iata-accredited agents at present. "And the number is increasing daily as many SSIs are voluntarily migrating to full Iata accreditation by knowing the benefits resulted from such participation," Sabri said, adding that Iata accredits travel agencies to "reduce the financial risk" posed to airlines participating in the BSP (Billing Settlement Plan).
Effective January 1, 2010 only GSAs (who issue tickets on behalf of a given airline) or Iata-accredited agents will be able to participate in the BSP in the Gulf, Sabri said. "The change only affects SSIs," he said.
However, this is not Iata's decision, Sabri said. "The local criteria for agent participation in BSP is determined by the local Agency Programme Joint Council a body of airlines and agents with equal representation (in the case of Gulf: 18 representatives with airlines and agents having nine representatives each) that discuss and where necessary vote on proposals such as changes to existing criteria," he said.
By Shweta Jain
© Emirates Business 24/7 2009
