Following pressure from the Agency Programme Joint Council (APJC), Iata has relaxed the financial criteria required for agents to renew their Iata licences.
Travel News confirmed with Asata ceo, Otto de Vries, that, as documented in a recent Iata memorandum, there is no expectation for agencies to show profitability or nett equity over the course of the next year.
“This is a great win for agencies and for the APJC as it substantially relaxes financial criteria for Iata licence renewals and allows agents to hold on to their licences, even if they were unable to make a profit, due to the impact of COVID-19, during the course of the year,” said Otto.
The tables below represent the essential information that agency owners need to know. Agencies are no longer required to prove that they have a nett equity greater than zero in year one but must show that their nett equity is greater than zero in years two and three. Likewise, agencies are not required to show profitability in year one but must be able to show this in years two and three in order to renew their Iata licence. This has been amended both for agencies generating less than R1m in cash sales per month, and for those generating more than R1m in cash sales per month.
Agencies that generate less than R1m in cash sales per month (average of past 12 months):
|
Financial ratio benchmark |
Ratio |
|
1. Nett equity |
Y1<0 and Y2>0, Y3>0 |
|
2. Profitability |
Y1 <0 but Y2 & Y3>0 |
|
3. Current ratio |
0.6:1 |
Agencies that generate more than R1m in cash sales per month (average of past 12 months):
|
Financial ratio benchmark |
Ratio |
|
1. Nett equity |
Y1<0 and Y2>0, Y3>0 |
|
2. Profitability |
Y1 <0 but Y2 & Y3>0 |
|
3. Current ratio |
0.7:1 |
