Travel agents, frustrated that many airlines are still not providing their clients with refunds for services that were never delivered, are now taking back control of the booking process, implementing their own airline risk evaluations and blacklisting airlines that do not meet the needs and demands of their clients. Ceo of Asata, Otto de Vries, shares the information that he has gathered on this growing global trend…
As a result of the very poor way that the airlines and Iata’s BSP have acted relating to refunds over the past year, it has come to my attention that many travel agents and OTAs around the world have begun to implement their own airline risk evaluations.
One agency, the largest OTA in Europe in fact, recently shared information on the risk assessment criteria that it is implementing. To start with, the agent turned off displays for all airlines that are not providing clients with refunds. The OTA is also negotiating direct bilateral contracts with airlines wherever possible, with mutually agreeable terms. This OTA is now also settling all payments for sales directly with the airlines, outside of the BSP, which is mitigating the risk of the OTA being left in a powerless situation. Airlines that do not permit direct settlement have been removed from the OTA’s display.
This OTA is also examining the financial statements (where available) of the airlines it has partnered with, to determine their cash status and liquidity. Those in financial difficulty, or in business rescue, whose services may not materialise, are only being displayed for sales purposes for restricted time periods decided by the OTA, and which meet the risk criteria of the agency.
Many agents have been burnt by airlines who load flight data on the GDS for sale and then later cancel the flights at the last minute, without providing the client with the option of a cash refund. Due to these disruptions the OTA’s management is also monitoring these patterns and is restricting fare displays for airlines acting in this manner. The acceptance of agent cards as an approved payment method for airlines is also on the OTA’s agenda.
I’m not surprised that agents are looking to better manage their own risk at this time, as there is very little trust between agents (and their clients) and airlines at present. Agents are currently in the difficult position of having to explain to clients face-to-face when an airline refuses to give them a refund for an undelivered service. Additionally, European package directives require agents to fully refund a service if it cannot be delivered, which puts the onus on the agent to try and redeem funds from the airline for which the agents are personally liable.
This, plus the unilateral decisions that airlines continue to implement, which are not made with the agent community’s interest in mind, is spurring more and more agents to take action.
It looks as though we are on the brink of seeing a huge increase in direct agent sales that circumnavigate Iata’s BSP, for the first time in decades. Agents want a lot more protection for their businesses and they are taking initiatives that allow them to wrestle back control of their booking processes.
It is important to note, however, that this is happening in parallel with ongoing discussions at the PAPGJC (Passenger Agency Programme Global Joint Council) and working groups linked to it. These discussions are focused on reviewing the one-sided nature of an agency programme that does not take airline risk into consideration at all. To this effect we expect some very positive announcements to be made in the coming weeks around refunds within the BSP Link process; an airline risk management framework; and further consideration of forms of payment available to travel agents.
