BSPZA’s Agency Programme Joint Council (APJC) is currently engaged in talks about the introduction of temporarily revised local financial criteria (LFC) for Iata bank guarantees that will better reflect COVID trading conditions.
The devastating effect that COVID-19 has had on the travel industry means many travel companies have had little to no income since South Africa’s travel ban was implemented in March and these companies are currently facing a cash crisis.
Ceo of Asata, Otto de Vries, told Travel News that the APJC was looking at options to deliver a temporary LFC to the market that was more fit-for-purpose in the current environment.
Iata licence bank guarantees are currently calculated based on 12 months of previous sales for an agency. A calculation based on agency sales for the past six months, as an example, would provide a more accurate reflection of the agent’s true ticket sales position, said Otto. He explained that if the LFC were adjusted accordingly this would result in agents being able to access substantial cash reserves that were currently being held in trust to cover their agency’s Iata guarantee. This would vastly improve the agency cash flow situation across the country.
“We have found the airlines extremely willing to understand the commercial reality that our agent community is currently facing. Once the APJC has collectively agreed on a temporary LFC it will be drafted into a proposal that will be submitted to the PaConf for a vote of approval during September,” said Otto.
Otto added that BSP’s monthly remittance option fell away on August 1. As such, agents who had been making use of this payment option were also expecting a reduction of their Iata bank guarantee due to the shorter remittance period.
