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Make the most of travel deregulation says AFTA chief

July 2, 2014 Corporate, Headline News 2 Comments Email Email

egtmedia59With travel agency deregulation now a fait accompli in Australia, having been introduced yesterday, AFTA chief executive Jayson Westbury is urging agents to make the most of the extra freedom the new era brings.

In a continuation of the interview with Global Travel Media published yesterday, Westbury defends ATAS and advises agents to take advantage of the new environment.

AFTA’s marketing and communications manager, Joanne Tralaggan, says ATAS now includes about 1400 locations, including branch locations.JW_headshot_close

Westbury expects more will join as the reality of the new environment sinks in.

“We have increased our staff as the result of inquiries,” he confirmed. “And as people decide what they are going to do, we have no reason to believe that they are not going to join.”

Westbury also expects more insurance providers will come on stream. “Evidence from most deregulated markets around the world shows that competition becomes the key thing to its success, so I have no reason to believe there won’t be other operators come into the market.”

Westbury poured cold water on suggestions that the TCF and ATAS could continue to run in parallel for a time.

“The political potentiality of that occurring is so far from being even remotely possible that it’s a ridiculous assertion. It literally can’t happen. We’ve just finished putting through the repeal of the Travel Agents Act, so physically within the Australian Government infrastructure, there is no legislative vehicle to go and just make that [a revival of the TCF] happen.”

While the TCF will continue to exist for a year, to process claims received for collapses before 30 June 2014 (such as the collapse of All Travel at Toukley a week ago), Westbury says there is no practical way it could suddenly be revived and made operational again.

“You would have to get some government to agree to the proposed legislation, get it passed through cabinet, get it passed through two houses of parliament – and that’s just one state.  Potentially you’d then have to get all the other states to do the same thing or get the Federal Government to do it in a hostile Senate environment. The political reality of the assertion is ridiculous.”

Westbury went on to answer a few questions put by agents to AFTA.

Here’s one: Why was the board of AFTA so determined to see the finish of a body [the TCF] that provided consumer protection at a minimal cost to agents, and have it replaced with an AFTA-led body that provides no protection but at a considerably higher fee, with the option to purchase consumer protection at prices that most small agents cannot afford?

“I don’t agree with any of those statements,” Westbury said, going on to say that for many small agents, ATAS costs AUD 475 to join if the agent is a member of AFTA.

“And they can open a Macquarie Bank trust account; it’s interest-bearing and it’s free. ATAS will promote the use of travel agents to consumers. Whereas the previous scheme paid, depending on circumstances, compensation to a consumer when a competitor went broke.

“So that particular agent seems to think it’s a good idea that he or she should be funding a scheme that pays money out to a consumer when one of their competitors goes broke. That was one of the fundamental policy discussions that we had, maybe five years ago. We don’t believe that was fair or sustainable long-term, particularly when you look at the supplier collapse of Air Australia, where AUD 36 million of consumers’ money was lost in one airline collapse.

“AUD 6 million of it was stuck in travel agent world, which the TCF has nothing to do with. Those agents who were sitting there with the AUD 6 million collapse in their laps aren’t very happy because the scheme did nothing for them. Now, in the new environment, they’ve got the ability to buy an insurance product to protect them against that risk, should they so choose. Whereas before, those insurances were not available – the scheduled airline failure insurance, that is.”

Here’s another question from an agent: What right does AFTA have to decide that AFTA members pay considerably less for ATAS than non-AFTA members, considering the money they were given to develop ATAS came from all agents, not just AFTA members?

“ATAS is not a TCF replacement, for starters,” Westbury responded. “It’s just no good making a continued comparison between ATAS and the TCF because they are not the same thing. And secondly, they [agents] were all legislatively forced to be part of the TCF. We are a voluntary scheme, which is a really important point. The other point is that AFTA “got the right” to determine how much it would charge for the scheme that it built – because it built the scheme. As for the TCF funds, AFTA represents 80% of the members of the industry, and we managed to get the government to agree to give us that money.”

There was never any possibility of the money being distributed to the industry, Westbury said.

“The trust deed clearly states that no money would be returned to the industry in the instance of the fund being dissolved. So AFTA did a good job in ensuring the money was used for the good of the industry. Now that person [the agent who put the question] doesn’t agree with that, but that’s one person’s opinion. It’s a democracy; they are entitled to have that opinion.”

Finally, for persistent ATAS critics, Westbury adds another point. “If you don’t like ATAS so much, why don’t you make your own? It’s a democracy in a deregulated environment. We are not the keeper of the only mortgage.”

Written by Peter Needham

Currently there are "2 comments" on this Article:

  1. AgentGerko says:

    So for Q1, Mr Westbury states that ATAS only costs $475 “if you are a member of AFTA”. The unmentioned part is if not a member you are looking at over $1500. And all you are really buying is a certificate. It offers no more guarantee of solvency than the old licence number did. And ATAS does nothing to remove the possibility of another Air Australia type collapse. Thats where the hideously expensive insurances kick in.

    And for Q2 it did not make a TCF vs ATAS comparison. It merely pointed out that the old TCF money was supplied by all agents and then given to AFTA who have decided to reward some agents to the detriment of any agent who feels that AFTA may not be a truly industry-wide body. And to state that they can decide who pays what “because they built the scheme” sidesteps the point that the govt expected them to create a system that was fair to all, not just to some.

    And finally, to say “if you don’t like ATAS build your own” is interesting, if somewhat bizarre. I’ll make up a sticket proudly announcing we comply with The Gerko Standard of Travel Ethics and wack it out the front. It’ll mean as much to Joe Public as anything AFTA can come up with.

  2. Robyn says:

    Ahhh Jayson – Always the lobbyist! Just once it would be nice for you to actually answer a question!

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