After a prolonged negotiation by the IATA Agency Program Joint Council (APJC) and with the assistance of AFTA, an agreement has been reached that the Billing Settlement Period (BSP) time will be reduced by 3 days from 1 February 2016 for two years till 31 January 2018. From 1 February 2018 the settlement time will be reduced by a further 4 days meaning the Australian BSP will be a 7 day BSP and settled 7 days later.
This change will ultimately bring Australia into line with many BSP’s around the world including the BSP in New Zealand which is already a 7 and 7 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,” said Jayson Westbury, AFTA Chief Executive.
“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,” said Westbury.
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,” said Westbury.
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 7 days with settlement 14 days later.