The airline ticket payment system between carriers and intermediaries is near collapse, according to the European Travel Agents’ and Tour Operators’ Association (ECTAA).
In a letter to the European Commission, the organization says that the IATA Billing and Settlement Plan, the mechanism for settling the sale and refund of tickets for the indirect channel, is on its knees.
Pawel Niewiadomski, president of ECTAA, says billions of Euro in refunds, because of the COVID-19-related cancellations in recent weeks, are now due to agents to enable them to pay back their customers.
Airlines, however, have stopped the automatic refund process leaving agents unable to refund customers.
The seriousness of the situation was also highlighted last week by France-based online travel agency MisterFly in an open letter to IATA’s CEO, published in French newspaper L’Echo.
Like MisterFly, ECTAA goes on to say that agents are still being forced to meet payment obligations for BSP.
“In practical terms, if IATA remains allowed to require payment in cash on March 31 for all tickets issued, including those in the meantime cancelled or in the process of being cancelled (as a result of a decision of the airlines or of the governments), accredited agents will only, if at all, obtain a credit in a distant future BSP remittance.”
It goes on to highlight the potential for customers to be owed billions of Euro in unpaid refunds.
ECTAA, which represents 70,000 agents and operators in Europe, claims airlines are not respecting E.U. regulations that require them to refund air tickets and issue non-refundable vouchers.
“There are no reasons for airlines to breach the law: all companies in the travel industry are fighting hard to survive this crisis that will last months.“
The organization says IATA does not appear to understand how grave the situation is and calls on the European Commission to postpone the BSP deadline and provide a guarantee, backed by state aid, to cover all “entitled refunds.”
Earlier this week, EUTravelTech, which represents the digital travel and distribution sector, called on the EC and member states to include the whole travel ecosystem in any measures taken to help hotels and airlines.