Serendipity Worldwide Group (SWG) is closing its ticketing platform for ITC members and its wholesale division with immediate effect. The travel company says this decision relates to the impact that R5,5 million in ADMs issued by Kenya Airways has had on its business.
Group operations director for SWG, Dinesh Naidoo, told Travel News that SWG had received R5,5 million in ADMs from Kenya Airways. While Dinesh says that R500 000 has already been deducted through BSP, he adds that the group does not have the immediate cash flow to pay out another
R5 million in ADMs, which is expected to be deducted from BSP tomorrow (July 23). Dinesh says that he expects the default to result in the suspension of SWG’s Iata licence.
Dinesh says he intends to dispute the ADMs and has appealed to Iata to assist the company in the interim. But, he says Iata’s response was that SWG must put up a guarantee for the
R5 million and then proceed with the dispute process, and further adds that Iata was unable to further involve itself in commercial disputes between airlines and agent partners. SWG has applied to its bank to finance the payment of the ADMs but Dinesh says the additional funds have not been granted as the bank feels there is a lack of certainty around whether the money will be able to be recovered at a time when the group is earning very little income.
According to Dinesh, approximately R1,5 million of the Kenya Airways ADMs relate to 50 to 100 tickets that were issued by five SWG ITCs last year around September. The tickets were all booked on Kenya Airways to Kigali but the passengers did not travel on the final Nairobi-Kigali leg. Dinesh alleges that Kenya Airways has penalised SWG more than R50 000 per ticket for “coupon trashing” (often referred to as skip-lagging). He argues that this client behaviour is completely out of SWG’s control and alleges that Kenya Airways has insisted that the penalties will stand as the volume of ticket abuse has revealed an intention to defraud the airline.
Dinesh alleges that the remaining R4 million in ADMs relate to penalties charged by Kenya Airways for flights that were cancelled due to the COVID-19 travel ban implemented in South Africa. He says he also plans to dispute these charges and has already approached the travel agent commissioner about the matter.
“I have been operating an honest business for 25 years. Even during this difficult time SWG has met all of its financial obligations, but our business is not in a position to cope with ADM volumes of this magnitude at this time. As a result, we have decided that it is too risky to continue issuing tickets for agents going forward. We have also made the decision to suspend our wholesale division of the business while the travel ban remains in place,” says Dinesh.
He adds that SWG is not abandoning its agents and that the group’s corporate and leisure travel divisions are still operating. The group will also continue to assist SWG members with refunds and amendments of existing bookings. He says most existing bookings have already been converted into airline vouchers for clients to use in the future and that SWG will assist ITCs to obtain outstanding refunds directly from the airlines.
Dinesh, who has also been serving as president of Asata, says he has taken it upon himself to resign from the position with immediate effect. He could not confirm whether SWG would file for liquidation or not and said only that he was seeking legal opinion on the way forward.
Travel News contacted Kenya Airways for comment about the ADM allegations and is expecting to have a discussion with representatives of the airline. Readers will be updated on the airline’s response as soon as it is received.
