IATA billing period to decrease

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Travel agents need to be prepared for a reduced Billing Settlement Period (BSP), which will drop for the first time next year.

From February 1 2016, the BSP will be reduced by three days for two years until January 31 2018. After this, the settlement time will be reduced by a further four days, meaning the Australian BSP will be a seven-day BSP and settled seven days later.

The agreement came after a prolonged negotiation by the IATA Agency Program Joint Council (APJC) with the assistance of AFTA, with the change ultimately bringing Australia into line with many BSP’s around the world, including the New Zealand BSP, which is already a seven and seven arrangement.

“We have been in negotiations with IATA and the airlines for more than 18 months about this change and it is pleasing to see a phased approach that will allow the Australian agency community the time necessary to adjust their business arrangements to accommodate this reduction,” AFTA’s chief executive Jayson Westbury said.

“With the ever more electronic platforms that the travel industry now enjoys and the strengthening of financial criteria and industry professionalism in the new industry-led environment, this change is timely for all involved in the travel value chain.”

This change will not only impact and alter the cash flow arrangements for IATA agents, but will also flow on to other areas of the agency community as commercial agreements are updated to accommodate these new arrangements.

“This is a significant industry change and importantly the two year phase in period will allow adequate time for the agency community to plan and adjust,” Westbury added.

This change is yet to be passed by the governance process of IATA and is scheduled to be presented at the Passenger Agency Conference to be held in Geneva in October of this year. Once passed the change will become enforceable and official.

The current Australian IATA BSP is seven days with settlement 14 days later.

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