TRAVEL consultants in Sri Lanka are mired in a dispute with IATA over the shortening of credit cycles from the current 10 down to seven days, with IATA “threatening” to withdraw its payment programme should the industry not comply.
According to the trade, the shortened credit cycle would throw the entire industry off gear.
Travel consultants say in the case of more than 200,000 Sri Lankans who annually go abroad for work, the air ticket is often issued even before they obtain a visa. “The employer does not pay for the ticket until they arrive for employment at their destination. These payments are made weeks later and sometimes after more than a month,” one consultant said.
Sasi Ganeshan, CEO, VMS Group of Companies, remarked: “We would have to provide a bank guarantee to each and every airline and hire more staff to maintain more accounts while the airlines would also have more work.”
In a statement released over the weekend, the IATA Agents Association of Sri Lanka (IATA-AASL), said: “If the payment cycle is reduced to seven days, it would make it impossible for travel (consultants) to conduct their business.”
Praising the Sri Lankan government, IATA-AASL said in the same statement: “Even though its own rules require it to comply with government action in each country in the application of the rules of that country, IATA is threatening the government with withdrawal of the entire programme unless the directive is withdrawn. Such discrimination by IATA (against) Sri Lanka should not be tolerated.”
Sri Lanka joined IATA’s payment scheme six years ago, which allowed all travel consultants to provide a single bank guarantee to IATA. Without such a plan, travel consultants would need to put up bank guarantees to each airline.
Despite IATA’s announcement in March that it wanted credit cycles reduced to seven days, members of IATA-AASL unanimously agreed to continue with the 10-day payment cycle.
IATA has also since written to the Civil Aviation Authority of Sri Lanka to say that the shortening of the credit cycle must be approved by a mail vote of all airlines worldwide.
IATA-AASL has challenged this, pointing out that IATA is insisting on implementing the seven-day credit cycle although only four airlines have voted against the original 10-day cycle.
IATA had not responded to TTG Asia e-Daily’s request for comments by publication time.
