The decision by IATA member airlines to enforce internationally standardised BSP remittance periods, which would eliminate the long-standing capacity of local markets to decide credit terms through shared governance, has been strongly opposed by the Universal Federation of Travel Agents’ Associations (UFTAA). The proposal to amend Resolution 812, Section 6.5.3.7 on IATA’s Global Standardisation of BSP Remittance Periods was adopted in the recently ended Mail Vote by the Conference, and UFTAA has communicated its grave concerns to IATA.

Concerned Raised by UFTAA

This action, according to UFTAA, is a major intervention in the market and not a technical correction. Through IATA, airlines collectively are exercising structural monopolistic control over the global airline clearing system by centrally mandating credit and remittance terms globally. Unilateral modifications to the BSP’s credit terms are considered violations of collective control since it is a required and essential settlement infrastructure. 

One of the main components of economic policy is credit terms. Local business practices, banking systems, and payment cultures are effectively overridden when standard requirements are imposed across various markets, interfering in national economies without a mandate from the government or democratic legitimacy. There is no economic rationale based on research to back up a one-size-fits-all strategy. Additionally, UFTAA points out that no other international industry has ever seen a situation where suppliers use a private group to jointly impose credit conditions on intermediaries in all countries.

The Move will Hamper Fairness and Competitive Balance

Serious questions concerning competitive balance and market fairness are brought up by this extraordinary behaviour. Travel agencies won’t be the only ones affected. Intermediaries are forced to pre-finance airline earnings due to shortened and strict remittance times, which raises the cost of liquidity. Passengers will undoubtedly pay more, have fewer options, and experience less reliable service as a result of these expenses. The decision’s underlying governance imbalance is as troubling. Airlines are the only organisations that can adopt binding resolutions, and agents, who are financially impacted, are not able to vote. This poses a risk to systemic competition legislation when combined with dominant control over settlement infrastructure. UFTAA advises a return to the previous resolution, which is locally administered, economically justifiable, and appropriate for arrangements that protect competition, market integrity, and the long-term interests of passengers. It also demands that the global remittance decision be immediately reconsidered.

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