IATA will introduce a new weekly payment system in India from June 1, 2012, a move that is likely to impact Indian travel consultants the most.
The association recently informed travel consultants of the new remittance frequency in the India billing and settlement plan (BSP), which will see ticket sale proceeds remitted to airlines every week, instead of the current fortnightly arrangement.
Indian travel consultants who are already in dire straits due to reduced commissions and direct bookings have expressed their unhappiness over the move. The weekly payment system is expected to hit mainly the small- and medium-size consultants – comprising more than 80 per cent of the business segment in India – who often give long credit periods to their clients.
On the other hand, the increased frequency is expected to improve cash flow to struggling Indian carriers. Air India, Jet Airways and Kingfisher were reportedly instrumental in securing the approval from IATA to change the billing cycle.
According to sources, the weekly payment system was first mooted by the national carrier Air India back in 2009. IATA approved a resolution to change the billing cycle in India at its conference in October last year.
Reporting by Divya Kaul
