To:
All Travel Agents (BSP Countries)
Date:
04 March 2015
Subject:
PAConf/37
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Dear Travel Agent,
We would like to provide you more information about the Resolutions adopted at the
PAConf/37 held in San Diego on 16 and 17 October 2014.
You will find the following documents attached:
a) Resolutions adopted for intended effectiveness 1st January 2015 (expedited
implementation)
b) Resolutions adopted for 1st June 2015 implementation
c) Minutes of the Passenger Agency Conference
An interim version of the Travel Agent's Handbook will be posted in the upcoming weeks to
the
Agenthome
web
site
(http://www.iata.org/services/accreditation-travel/traveltourism/Pages/tah.aspx).
Here, you will find the changes to the Local Financial Criteria, effective 1st January 2015.
The Local Financial Criteria are reflected under Section 3.
If you need any additional information, please do not hesitate to contact us through our
customer portal http://www.iata.org/customer.
Best regards,
ISS Operations & Service Center
Europe
International Air Transport Association
Operations & Service Centre Europe
Torre Europa
Paseo de la Castellana, 95
28046 Madrid, Spain
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RESOLUTIONS ADOPTED AT THE
THIRTY-SEVENTH PASSENGER AGENCY CONFERENCE
San Diego, California, 16 and 17 October 2014
FOR EXPEDITED IMPLEMENTATION
PAC/Reso/597
P.O. Box 416
1215 GENEVA 15 AIRPORT
SWITZERLAND
Page | 1
30 October 2014
MEMORANDUM
To:
All Members of IATA
Passenger Agency Conference Accredited Representatives
From:
Director, FDS Operations
Ref:
PAC/Reso/597
Subject:
THIRTY-SEVENTH PASSENGER AGENCY CONFERENCE (PAConf/37)
San Diego, California, 16 and 17 October 2014
ADOPTED RESOLUTIONS FOR EXPEDITED IMPLEMENTATION
_________________________________________________________________________
1.
Attached are the expedited Resolutions adopted at PAConf/37 (San Diego,
California, 16 and 17 October 2014) and the draft minutes of that meeting.
2.
Members are requested kindly to file these Resolutions with their respective
Government authorities, where required, and to advise this office of such
authorities’ reactions when received.
3.
The filing period is 01-14 November 2014 for effectiveness 01 January 2015
(unless otherwise indicated).
4.
You are reminded that these Resolutions will be declared effective upon
receipt of the required Government approvals, in accordance with
Resolutions 001 and 006.
Javier Gallego Alonso
Director, FDS Operations
Page | 2
EXTRACT FROM THE DRAFT
MINUTES OF THE THIRTY-SEVENTH PASSENGER AGENCY CONFERENCE
Hilton Bayfront Hotel, San Diego, California
16 and 17 October 2014
AGENDA ITEM R9 – RESCISSION OF RESOLUTION 824s
M/..
Conference adopted the proposal from the IATA Regional Office Europe to
rescind Resolution 824s effective 1 January 2015 on the basis that this was an
outdated resolution relating to the old paper ticket environment.
AGENDA ITEM R19 – MINOR ERROR POLICY
M/..
The Chairman drew attention to Revision 2 of this document dated 16
October 2014 circulated on site.
M/..
Mrs. Vité explained that this proposal had been developed as a result of
feedback from the three Travel Agency Commissioners, and discussion at PSG and
PAPGJC. It concerned the treatment of ‘administrative errors’ made by Agents which
under resolution would result in Irregularities or Default action, but where no monies
were at risk. The paper set out a proposed ‘Minor Error Policy’ that would enable
IATA to make exceptions for such administrative errors, with the objective of
resolving the vast majority of appeals from Agents in a more satisfactory way,
especially those which would otherwise be escalated to the TACs.
M/..
Outlining the scope of the policy, Mrs. Vité explained that Late Notification of
Change of Ownership or Location were the subject of a separate agenda item (R43).
Late payment of annual fees had also been dealt with previously through resolution
changes effective in 2014. Short payments would be considered on a case-by-case
basis. The paper therefore proposed changes to Resolution 818g as set out in
Attachment ‘A’ to the paper relating to Late Submission of Financial Documents.
M/..
A member advised that they had problems with the suggested changes in
respect of Short Payment included in the Revised paper sent out in the Second
Transmittal. Mrs. Vité confirmed that that had since been removed from 2nd revised
paper distributed on site.
M/..
With this clarification, and on a formal vote on the document dated 16
October 2014, PAConf adopted the changes to Resolution 818g, Paragraph 2.2 in
respect of Late Submission of Financial Documents for expedited effectiveness of 1
January 2015.
AGENDA ITEM R20.8 – CLARIFICATION OF REMITTANCE FREQUENCY – BSP
JAPAN
M/..
Conference noted the revised submission from APJC-JP dated 12 October
2014 and unanimously adopted the proposed amendment to Resolution 818g,
Attachment 'C’ under Reporting & Remittance Exceptions for Japan Only effective 1
January 2015, with a further amendment effective 1 October 2015.
Page | 3
AGENDA ITEM R32 – CHANGE IN PRORATION METHODOLOGY – EXCEPTION
FOR SINGAPORE
M/..
A member presented this paper on behalf of LCAG-P Singapore, explaining
that it was difficult to ensure that an airline’s amount at risk was fully covered by the
industry Financial Security. An airline could use the BSP-SG’s Agent Monitoring
Report to do their own risk management and decide to regulate an Agent’s ticket
stock limits to ensure that the airline’s exposure to financial risk was mitigated in the
event of Agent default. However, there could be situations where a participating
airline, or airlines, chose not to restrict ticketing and provided higher ticket limits,
resulting in the amount at risk being in excess of the value of the Financial Security
provided by the Agent. Under such circumstances, airlines stood to lose significantly
because of the liberal ticketing authority policies of other participating airlines.
M/..
The LCAG therefore proposed an amendment to Resolution 818g for an
exception for Singapore Only in respect of the encashment and proration of any
financial security, whereby each BSP Airline would be provided with a prorated
amount of the Financial Security in proportion to its percentage share in the billing up
to the date when the full amount of the Financial Security was exceeded.
M/..
On a formal vote, Conference unanimously adopted the proposed
amendments to Resolution 818g, Attachment ‘A’, Paragraph 1.10.4 as set out on
pages 2 and 3 of the agenda paper, for expedited effectiveness of 1 January 2015.
AGENDA ITEM R34 – RESOLUTION 818g FOR SUDAN (NORTH) AND NEW
LOCAL FINANCIAL CRITERIA
M/..
Conference endorsed the proposal to migrate Sudan from Resolution 800 to
Resolution 818g upon full implementation of the BSP effective 1 December 2014 and
adopted the supporting resolution changes shown in Attachment ‘B’ of the paper.
M/..
Concerning the proposed new Local Financial Criteria, whilst it was noted that
the new Criteria were unanimously agreed by the APJC, a Member pointed out the
inconsistencies in the wording for the financial security calculation in paragraphs
4.2/4.2.1. Conference therefore adopted the proposed new Criteria shown in
Attachment ‘A’ of the paper, subject to further clarification by the APJC of paragraphs
4.2/4.2.1.
AGENDA ITEM R38 – NUMBER OF IRERGULARITIES TO TRIGGER DEFAULT –
BSP HUNGARY
M/..
PAConf adopted a proposal from APJC Hungary to increase the number of
Irregularities to trigger default in that market within 12 months to six instead of the
existing four, effective 1 January 2015 and the proposed amendment to Resolution
818g, Attachment ‘A’, sub-paragraph 1.7.5.2.
AGENDA ITEM R41 – RESOLUTION REGARDING THE PASSENGER AGENCY
CONFERENCE STEERING GROUP
M/..
Mr. Lugo presented this item, explaining that the purpose of formalizing the
Passenger Agency Conference Steering Group in resolution was to ensure
transparency regarding the roles of the PSG and the Agency Administrator. The new
resolution included a Terms of Reference for the PSG, with a description of the
function of the Agency Administrator and a defined term in resolution 866 for the
Steering Group, as shown in Attachment ‘B’ of the paper. The PSG Terms of
Page | 4
Reference were based on a historical document formerly published in a previous
manual (ISSSPM) and were nothing new.
M/..
The Chairman believed this would be a useful addition to the resolutions and
would put the PSG on a formal footing.
M/..
On a formal vote, the proposed new resolution shown at Attachment ‘A’ and
definition in Resolution 866 shown in Attachment ‘B’ were unanimously adopted for
expedited effectiveness of 1 January 2015.
AGENDA ITEM R44 – DEFINITION OF ‘SALES AT RISK’
M/..
Mrs. Vité presented this item, which proposed new definitions for Resolution
866 shown at Attachment ‘A’ and consequential changes to other resolutions shown
at Attachment ‘B’ of the paper. The new definitions for ‘Sales at Risk’ and ‘Days
Sales at Risk’ had been taken from the best practice guidelines contained in
Resolution 800f. This was an issue in terms of reinstating an Agent following default,
where the Agent is required to furnish a Financial Security covering the sales at risk
although there was no definition in resolution on how IATA should calculate this
amount.
M/..
A member raised the question that this proposal might be in contradiction to
the Local Financial Criteria in individual countries, as not every country had adopted
the rule that the sales at risk should be calculated on the three highest sales months
in a 12 month period. In his country, for example, the requirement to submit a bank
guarantee was based on the previous 12 months’ average, so that could not be
changed in a default case to the 3 highest months’.
M/..
Another carrier had the same problem with this paper, voicing concern at
having this wording in the standard resolution that did not fit with local market
practices and could present a risk. The member could therefore not agree to the
proposed changes.
M/..
The Chairman ascertained that whilst the previous member would be
prepared to abstain on the proposal, the second carrier was not in a position to do
so. He therefore advised that he would declare the item defeated, on the
understanding that the carrier would discuss the matter further with Mrs. Vité during
the break to see if they could find a way to abstain on the proposal.
M/..
Later in the meeting, Mrs. Vité advised that there had been a
misunderstanding and she clarified that the days’ sales at risk meant the number of
days from the beginning of the Agent’s Reporting Period to the Remittance Date in
respect of the Report Period or Periods, plus a margin of five days.
M/..
With this clarification, the member advised that she could abstain on the
proposal. The Chairman then took a formal vote on the item, which was adopted
with two abstentions including KE by name, for expedited effectiveness of 1 January
2015.
AGENDA ITEM R47 – STRENGTHENING RISK MANAGEMENT PROVISIONS
FOR TRAVEL AGENTS
M/..
Mrs. Vité explained that this item aimed at enhancing the current framework
of the programme to enable the Agency Administrator to take action much more
quickly in circumstances when there was clearly a high risk. Given the evolving
Page | 5
nature of the market including the move to etickets and the advent of ecommerce,
the need to develop a more refined and flexible approach to agency risk
management was clear, as illustrated by the recent AFT and Enterprise Travel
defaults. The proposed resolution changes set out a step change in Agency Risk
Management by moving from risk management to risk prevention through the
strengthening of the provisions. The key changes proposed were two-fold. Firstly to
give the Agency Administrator the right to request an immediate accounting and
settlement of monies due and/or require an Agent to restrict its ticketing to credit card
sales only made against the BSP Airline’s merchant agreement under a prejudiced
collection of funds event. Secondly, airlines could notify the Agency Administrator of
irregular activity of an Agent, including violation of the reservation and ticketing rules,
and the Agency Administrator could act upon that information to withdraw ticketing
authority. In terms of restricting sales to credit card only, for the time being this
would be manually controlled, pending GDS capability, but would give IATA the
ability to act within 48 hours instead of the current 60 days.
M/..
The Chairman advised that whilst the Agents had concerns over part of the
wording, they did not object to the proposal.
M/..
Mr. Lugo highlighted that there was a necessary safeguard for the agents in
both the proposed provisions, which would generate an immediate request to the
Travel Agency Commissioner for review. This was an essential requirement,
particularly under EU law.
M/..
Asked what was meant by ‘reasonable variations in sales levels’ under new
paragraph 1.8.4.1, Mrs. Vité explained that this would cover such aspects, for
example, of an Agent having higher sales for the summertime, or for Haj, and
therefore seasonal variations in sales would not be a trigger and the sales pattern of
the Agent over the last 12 months would be taken into consideration.
M/..
On a formal vote, Conference unanimously adopted the resolution
amendments set out in Attachment ‘A’ of the paper for expedited effectiveness of 1
January 2015.
AGENDA ITEM R53 – AGENCY PROGRAMME JOINT COUNCILS
M/..
A member presented this item, which aimed at clarifying participation of
Observers in APJC meetings to set out that they were allowed to participate and
contribute to discussions. If adopted, the member recommended that IATA should
brief Chairmen and Secretaries of APJC meetings accordingly to create awareness
about Observer participation.
M/..
Whilst not having a problem with the proposal, another carrier felt that the
status of an Observer was that they should be there to observe, and they should only
participate in the discussions with the agreement of the chairman.
M/..
The Chairman proposed an amendment to the proposed new text to read
‘Observers are allowed to participate with the permission of the Chairman and
contribute in the discussions’ and on a formal vote, Conference unanimously adopted
the revised amended text for expedited implementation of 1 January 2015.
Page | 6
AGENDA ITEM C1 – ANY OTHER BUSINESS ITEMS
M/… Conference agreed to take a number of Any Other Business items, as
detailed below. Where adopted, these items will be subject to Mail Vote postconference for those members not attending.
AGENDA ITEM C1.1 – CHANGE IN PRORATION METHODOLOGY – EXCEPTION
FOR INDIA
M/… This item had been submitted by the LCAG-P India requesting an exception
for India in r818g, Attachment ‘A’, paragraph 1.10.4 in respect of the encashment of
the bank guarantee. An LCAG member explained the reason behind the request for
the revised proration, noting that this was similar to an earlier agenda item adopted
for Singapore.
M/… On a formal vote, the proposed amendments to r818g were unanimously
adopted for expedited effectiveness of 1 January 2015. The Chairman reminded
members that this item would be subject to Mail Vote post Conference for members
not attending.
AGENDA ITEM C1.4 – CLARIFICATION OF BUSINESS HOLIDAYS – BSP JAPAN
M/… A member presented this proposal from APJC-JP seeking to clarify the
business practice in Japan of the closure of banks and businesses from 29
December to 3 January. The Chairman asked whether this amendment was really
necessary, as there was already provision in the rules saying that in case of bank
holidays, remittance automatically rolled over to the next working day. The member
reported that payment and settlement had never occurred during these days and now
that Japan had migrated to the Singapore hub, it was important to enshrine this
practice in resolution so that those dates were blocked out when the remittance
calendar was produced.
M/… On a formal vote, Conference adopted the proposed additional text for Japan
only in Resolution 818g Attachment ‘C’ effective 1 January 2015, subject to Mail Vote
for members not attending.
Page | 7
OUTLINE OF CONTENTS AND STATUS OF EFFECTIVENESS
Expedited Resolutions adopted at:
Thirty-seventh Passenger Agency Conference (PAConf/37)
San Diego, California, 16 and 17 October 2014
Intended Effective Date: 01 January 2015
(unless stated otherwise)
Resolution
PAConf/37
Agenda
Item
R34, R44
Title
Page
Passenger Sales Agency Rules
2
PAC1(501)818g (except Passenger Sales Agency Rules
USA)
PAC2(501)818g
PAC3(501)818g
4
PAC1(2451)824s
(except USA)
PAC2(2451)824s
PAC3(2451)824s
Adherence to Minimum Security
Standards – Applicable
Indemnity Provisions
10
R19, R20.8,
R32, R34,
R38, R44,
R47, R53,
C1.1*, C1.4*
R9
PAC1(501)866
USA)
PAC2(501)866
PAC3(501)866
(except Definitions of Terms Used in
Passenger Agency Programme
Resolutions
11
R41, R44
PAC1(51)868
USA)
PAC2(51)868
PAC3(51)868
(except Passenger Agency Conference
Steering Group and the Agency
Administrator
12
R41
PAC2(501)800
PAC3(501)800
NEW
*Subject to Mail Vote post Conference for Members not attending.
Page | 1
Resolution 800
PASSENGER SALES AGENCY RULES
(Amending)
PAC2(501)800
PAC3(501)800
Expiry:
Type:
Indefinite
B
1. Amend Resolution 800 as shown below:
This Resolution is applicable in the following countries and/or territories:
Afghanistan, Algeria, Angola, Armenia, Belarus, Bhutan, Brunei Darussalam,
Burundi, Cape Verde, Christmas Island, Cocos (Keeling) Islands, Cuba, Comoros,
Democratic People's Republic of Korea (DPRK), Democratic Republic of Congo,
Djibouti, Equatorial Guinea, Eritrea, Falkland Islands/Malvinas, Gambia, Guinea,
Guinea-Bissau, Indian Ocean Islands, Islamic Republic of Iran, Iraq, Israel, Laos
(Peoples' Democratic Republic), Liberia, Libya, Madagascar, Maldives, Myanmar,
Sao Tome and Principe, Seychelles, Sierra Leone, Somalia, Sudan, Tajikistan, Timor
Leste, Turkmenistan, and Uzbekistan.
Filing Period
01-14 November 2014
Page | 2
Effective/Implementation Date
01 December 2014
Resolution 800
PASSENGER SALES AGENCY RULES
(Amending)
PAC2(501)800
PAC3(501)800
Expiry:
Type:
Indefinite
B
1. Amend Resolution 800 as shown below:
Branch Locations in Other Countries
2.4.2.1 […] Where the Agent is unable to meet the applicable Local Financial Criteria
of the country of the Branch Location, it shall be required to furnish additional security
in the form of a Financial Security to cover the fundsSales at rRisk for that location.
Filing Period
01-14 November 2014
Page | 3
Effective/Implementation Date
01 January 2015
Resolution 818g
PASSENGER SALES AGENCY RULES
(Amending)
PAC1(501)818g (except USA)
PAC2(501)818g
PAC3(501)818g
Expiry:
Type:
Indefinite
B
1. Amend Resolution 818g as follows:
This Resolution is applicable in the following countries:
Area 1: … … …
Area 2 – Africa: Botswana, Central/West Africa1, Egypt, Ethiopia, Ghana, Kenya,
Lesotho, Malawi, Mauritius, Mayotte, Morocco, Mozambique, Namibia, Nigeria,
Reunion Island, Rwanda, South Africa, Sudan, Swaziland, Tanzania, Tunisia,
Uganda, Zambia, Zimbabwe.
Filing Period
01-14 November 2014
Page | 4
Effective/Implementation Date
01 December 2014
Resolution 818g
PASSENGER SALES AGENCY RULES
(Amending)
PAC1(501)818g (except USA)
PAC2(501)818g
PAC3(501)818g
Expiry:
Type:
Indefinite
B
1. Amend Resolution 818g as follows:
1.1 AGENCY PROGRAMME JOINT COUNCIL (‘THE COUNCIL’)
…
…
1.1.1.1 Members and Airlines designated from time to time by the Agency
Administrator, from those having designated a nominee, bearing in mind the local
market conditions. Any Member and Airline without a designated representative may
attend the APJC as an observer at the discretion of the Chairman, whose approval
shall not be unreasonably withheld. Observers are allowed to participate with the
permission of the Chairman and contribute in the discussions. Members/ Airlines
must not designate a General Sales Agents as their APJC representative. GSAs are
also not permitted to attend APJC meetings as observers.;
Finances
2.1.4 The financial stability of the applicant is assessed in relation to the funds Sales
at rRisk, taking into accounts net equity, net current assets compared to the net cash
sales of an average prescribed reporting and remitting period. Such evaluation shall
be in accordance with the Sales Agency Rules and, as the case may be, the Local
Financial Criteria.
…
…
2.1.4.2 To obtain a satisfactory evaluation, the applicant may be required to provide
further information or additional financial support in the form of bank or insurance
bonds or guarantees to cover the funds Sales at rRisk. […..]
Branch Locations in Other Countries
2.1.4.4 […] Where the Agent is unable to meet the applicable Local Financial Criteria
of the country of the Branch Location, it shall be required to furnish additional security
in the form of a Financial Security to cover the fundsSales at rRisk for that location.
2.1.4.5 […] shall not be subject to the inclusion of the Member’s sales by the
applicant in the calculation of the fundsSales at rRisk under the Local Financial
Criteria, as adopted by the Conference and published in the Travel Agent’s
Handbook.
Page | 5
Resolution 818g
Reviews and Consequences of Non-Compliance
2.2 IATA has the right to conduct examinations of the financial standing of Agents
annually and for cause at any time. IATA may request that an Agent must provide
the documents deemed necessary to conduct such examination, by a date no earlier
than seven days from the date of the request for the examination. Failure by the
Agent to submit such documents as prescribed shall be grounds for IATA to apply
two instances of irregularity and to give the Agent 30 days to comply, except where
IATA determines that the Agent has made all reasonable efforts to meet the specified
date, in which case IATA, in its sole discretion, may extend the due date by a further
seven days without penalty. Failure by the agent to comply within 30 days shall be
grounds to give the Agent notice of removal from the Agency List, provided that if the
Agent submits the required documents prior to the removal date the removal shall not
take effect. Where the Agency Administrator gives notice of removal under this
provision, the notice shall specify the date at which it will be effective, which shall not
be before the date specified in clause 13.2 of the Passenger Sales Agency
Agreement;
…
…
2.2.1.2 Additionally, IATA has the right when IATA finds for any reason that funds are
at risk to review at any time the Agent’s fundsSales at rRisk and require an
adjustment to any existing Financial Security provided to ensure appropriate and
sufficient coverage. […]
2. Amend Resolution 818g, Attachment ‘A’ as shown below:
1.7.5 Accumulated Irregularities
…
1.7.5.2 Immediately upon a fourth instance of Irregularity being recorded, six
instances in the case of Hungary, Nepal, India and countries on weekly remittance in
Area 1 except Argentina, Paraguay and Uruguay where eight instances apply, on
such list in respect of a Location during any 12 consecutive months the Agency
Administrator shall take Default Action with respect to all Locations in accordance
with Paragraph 1.10;
…
1.7.8.5 and in circumstances where the Agency Administrator is notified by a BSP
Airline in writing of irregular activity by an Agent, which shall be substantiated,
including but not limited to a violation of the provisions of Resolution 830a
(Consequences of Violation of Ticketing and Reservation Procedures), leading to the
belief that BSP Airlines’ ability to collect monies for STDs may be prejudiced, the
Agency Administrator shall notify the Agent of the irregular activity and may withdraw
all STDs in the Agent’s possession;
Page | 6
Resolution 818g
1.7.8.6 thereupon, the Agency Administrator shall request the Travel Agency
Commissioner, except in cases described under paragraph 1.7.8.4, to review and redetermine the approval of the Agent or Approved Location. Pending this review, the
Agent may request an interlocutory review of the Agency Administrator’s action by
the Travel Agency Commissioner and may also apply for interlocutory relief staying
the withdrawal of STDs. Before granting an interlocutory order under this
Subparagraph staying withdrawal of STDs, the Travel Agency Commissioner shall
require the Agent to provide a bank or other financial guarantee and ensure that all
amounts due as determined under Subparagraph 1.7.8.3(i) are settled at the time the
interlocutory order takes effect.
1.8 PREJUDICED COLLECTION OF FUNDS
1.8.1 in the event that the Agency Administrator receives written information, which
can shall be substantiated, …
1.8.4.1 if at any time IATA finds that an Agent’s funds at risk are not covered by a
Financial Security, or that any Financial Security provided does not sufficiently cover
those funds taking into account reasonable variations in sales levels, IATA has the
right review to the circumstances of the Agent and to demand an immediate
accounting and settlement of monies due through the provision of an interim Billing
report to the Agent and/or require the Agent to restrict its sales of STDs to credit card
sales only made against the BSP Airline’s merchant agreement and in accordance
with Resolution 890;
1.8.4.2 if payment is not received on demand, the Agency Administrator will
immediately notify the Agent and take default action with respect to all locations of
the Agent in accordance with the provisions of Resolution 818g, Section ‘A’,
paragraph 10;
1.10.4 Encashment of Bank Guarantee, Insurance Bond or any other Form of
Guarantee (except India and Singapore)
In the event that an Agent’s BSP bank guarantee, insurance bond or any other form
of guarantee, if applicable is insufficient to provide a full settlement to each of the
BSP participating Airlines concerned listed in the Billing which has been subject to
the Agent’s default, each such BSP Airline shall be provided with a prorated amount
of the bank guarantee, insurance bond or other form of guarantee in proportion to its
percentage share in Billing subject to the default; such calculation shall be without
regard to specific Accountable Transactions. In the event that an Agent has provided
a separate bank guarantee, insurance bond or any other form of guarantee in favor
of a specific BSP Airline for Accountable Transactions, such BSP Airline shall not be
entitled to any payment under the Agent’s BSP bank guarantee, insurance bond or
other form of guarantee until all outstanding indebtedness of the Agent to other BSP
Airlines shall be discharged.
Page | 7
Resolution 818g
1.10.4 Encashment of Bank Guarantee, Insurance Bond or any other Form of
Guarantee (India only)
In the event that an Agent’s BSP bank guarantee, insurance bond or any other form
of guarantee, if applicable is insufficient to provide a full settlement to each of the
BSP participating Airlines concerned listed in the Billing which has been subject to
the Agent’s default, each such BSP Airline shall be provided with a prorated amount
of the bank guarantee, insurance bond or other form of guarantee in proportion to its
percentage share in Billing up to the date when the full amount of the bank
guarantee, insurance bond or other form of guarantee was exceeded.
1.10.4 Encashment of Bank Guarantee, Insurance Bond or any other Form of
Guarantee (Singapore only)
In the event that an Agent’s BSP bank guarantee, insurance bond or any other form
of guarantee, if applicable is insufficient to provide a full settlement to each of the
BSP participating Airlines concerned listed in the Billing which has been subject to
the Agent’s default, each such BSP Airline shall be provided with a prorated amount
of the bank guarantee, insurance bond or other form of guarantee in proportion to its
percentage share in Billing up to the date when the full amount of the bank
guarantee, insurance bond or other form of guarantee was exceeded; such
calculation shall be without regard to specific Accountable Transactions. In the event
that an Agent has provided a separate bank guarantee, insurance bond or any other
form of guarantee in favor of a specific BSP Airline for Accountable Transactions,
such BSP Airline shall not be entitled to any payment under the Agent’s BSP bank
guarantee, insurance bond or other form of guarantee until all outstanding
indebtedness of the Agent to other BSP Airlines shall be discharged.
2.3(a) Agent able to demonstrate financial qualification
When the Agency Administrator is satisfied that the Agent has effected settlement of
all outstanding amounts, he/she shall require the Agent to furnish a bank guarantee
or an approved insurance guarantee or bond equivalent to sSales at rRisk:
Page | 8
Resolution 818g
3. Amend Resolution 818g, Attachment ‘C’ under ‘Reporting & Remittance
Exceptions as shown below:
Effective 1 January 2015
JAPAN ONLY: Recurring dates 29 December through 3 January, considered as
business holidays, must not have remittance scheduled during this window.
*Effective 1 January 2015
JAPAN ONLY If the remittance frequency so established is four times monthly,
Remittances shall be made so as to reach the Clearing Bank not later than its close
of business on the 13th calendar day from the Reporting Date
**Effective 1 October 2015
JAPAN ONLY If the remittance frequency so established is four times monthly,
Remittances shall be made so as to reach the Clearing Bank not later than its close
of business on the 13th 8th calendar day from the Reporting Date.
Filing Period
01-14 November 2014
Page | 9
Effective/Implementation Date
01 January 2015
Resolution 824s
ADHERENCE TO MINIMUM SECURITY STANDARDS – APPLICABLE
INDEMNITY PROVISIONS
(Amending)
Amend Resolution 824s as shown below:
PAC1(2451)824s (except USA)
PAC2(2451)824s
PAC3(2451)824s
Filing Period
01-14 November 2014
Page | 10
Expiry: Indefinite 31 December 2014
Type: B
Effective/Implementation Date
01 January 2015
Resolution 866
DEFINITIONS OF TERMS USED IN PASSENGER AGENCY PROGRAMME
RESOLUTIONS
(Amending)
PAC1(501)866 (except USA)
PAC2(501)866
PAC3(501)866
Expiry:
Type:
Indefinite
B
Amend Resolution 866 as follows:
DAYS’ SALES AT RISK means the number of days from the beginning of the
Agent’s Reporting Period to the Remittance Date in respect of that Reporting Period
or Periods, plus a margin of five days.
PASSENGER AGENCY CONFERENCE STEERING GROUP (usually referred to as
PSG or ‘the Steering Group’) means that group established by the Passenger
Agency Conference to advise and act on behalf of Conference between meetings,
and which functions under the provisions of Resolution 868.
SALES AT RISK is calculated by dividing the Days’ Sales at Risk by 90 days, and
applying that percentage to the BSP cash turnover, or cash turnover as applicable,
amount the Agent made in the highest 3 months in the previous 12 months.
Filing Period
01-14 November 2014
Page | 11
Effective/Implementation Date
01 January 2015
Resolution 868
PASSENGER AGENCY CONFERENCE STEERING GROUP AND THE AGENCY
ADMINISTRATOR
(NEW)
PAC1(51)868 (except USA)
PAC2(51)868
PAC3(51)868
Expiry:
Type:
Indefinite
B
WHEREAS the Passenger Agency Conference Steering Group (PSG) analyses
and makes recommendations to the Passenger Agency Conference on policy,
budgetary and other issues under the jurisdiction of the Conference;
WHEREBY it is hereby RESOLVED as follows:
WHEREAS the Agency Administrator is the IATA official designated by the Director
General as the holder of that office, or his authorized representative, and is
responsible for the management of the Agency Programmes in accordance with the
Rules and Resolutions of the Passenger Agency Conference, and has the authority
to act in extraordinary circumstances;
1. TERMS OF REFERENCE OF THE PSG
1.1 to recommend action to the Passenger Agency Conference in the light of
changing regulatory and market conditions;
1.2 to consider and recommend enhancements to business practices aimed at
improving the industry distribution system;
1.3 to review technological advances of benefit to the Agency Programme and in
particular support the development of tools and techniques serving automation;
1.4 to provide guidance to IATA including the Agency Administrator on managing the
resources allocated to Passenger Agency Programme activities and for determining
relative priorities;
1.5 to provide guidance to the Secretariat with respect to industry distribution matters
in between meetings of the Conference;
1.6 to liaise with other IATA Conferences and Committees on behalf of the
Conference on matters dealing with Passenger Agency Programme Activities;
1.7 to report regularly to Conference, and make policy and organizational
recommendations to improve the effectiveness of Passenger Agency Conference
activities;
Page | 12
Resolution 868
1.8 to act on behalf of the Conference on urgent proposals affecting the programme
provided always that any decision of the PSG will be subject to ratification by the
Conference at either a regular meeting or where appropriate by electronic means;
1.9 to review and endorse proposed mail votes prior to their issuance, to provide
confirmation of the need for urgent resolution together with any recommendations to
improve on the construction of the proposals;
1.10 to create ad-hoc working groups and to address urgent issues which arise
between conferences;
1.11 designated representatives from the PSG will be nominated to the Passenger
Agency Programme Global Joint Council (PAPGJC).
2. COMPOSITION AND MEETINGS OF THE PSG
2.1 The PSG is comprised of the Chairman and Vice Chairman of the Conference,
plus the Chairman of the Joint A4A/IATA Passenger Services Conference (JPSC), as
well as four (4) members from each Conference Area wherever possible, plus one
additional Member at large. Members from each of the Conference Areas shall be
elected for a term of three years. Additional Members may be elected by the
Passenger Agency Conference to serve for a specific term.
2.2 The PSG Chairman shall be the Chairman of the Conference.
2.3 Secretariat support shall be provided by the designated IATA official plus other
IATA staff he/she deems appropriate for the topics under discussion.
2.4 Attendance at meetings shall be restricted to the designated representatives.
2.5 Observers may be permitted to attend by invitation of the Chairman.
2.6 The PSG shall meet at least once a year, or in any event with sufficient frequency
to ensure that it can fulfil its responsibilities.
2.7 Emergency meetings may be called by the Chairman as may be required to
address extraordinary circumstances which affect the good order of the Agency
Programme; such meetings may be held telephonically upon reasonable notice to the
designated representatives.
2.8 Failure of a delegate to attend two successive meetings will result in the loss of
their seat, except where a valid reason is provided.
Page | 13
Resolution 868
3. QUORUM AND VOTING
3.1 Meetings shall be arranged so that at least a simple majority of the designated
representatives – being the quorum – are able to be present.
3.2 To the extent that formal voting is necessary, Steering Group decisions shall be
taken by simple majority vote of members present.
4. AGENDAS AND MINUTES
4.1 The call of meeting for a regularly scheduled meeting and the meeting agenda
shall be circulated to Members of the Steering Group at least 14 days in advance of
the meeting. The call of meeting for an emergency meeting and the meeting agenda
shall be circulated to Members of the Steering Group at least 24 hours advance of
the emergency meeting. The designated IATA official for Passenger shall act as
secretary to the meeting and shall publish minutes promptly following approval by the
Chairman.
5. AGENCY ADMINISTRATOR
5.1 The Agency Administrator is the IATA official designated by the Director General
of IATA as the holder of that office, or his authorized representative, responsible for
the management of the Agency Programme in accordance with the Rules and
Resolutions as established by the Conference.
5.2 The Agency Administrator has the autonomy to act in extraordinary
circumstances to protect the interests of the Agency Programme. Any action taken in
extraordinary circumstances shall be reported immediately to the PSG Chairman and
shall be reviewed by the PSG at the next meeting or at an emergency meeting if
deemed appropriate by the PSG Chairman.
Filing Period
01-14 November 2014
Page | 14
Effective/Implementation Date
01 January 2015
MEMORANDUM
PAC/Reso/601
To:
All Members of IATA
Passenger Agency Conference Accredited Representatives
From:
Javier Gallego Allonso, Director FDS Operations
Date:
10 December 2014
Subject:
Thirty-seventh Meeting of the Passenger Agency Conference (PAConf/37)
San Diego, California, 16 and 17 October 2014
FINALLY ADOPTED RESOLUTIONS
1. Attached are the Finally Adopted Resolutions that were adopted at PAConf/37 (San
Diego, California, USA, 16 and 17 October 2014).
2. Members are requested kindly to file these Resolutions with their respective Government
authorities, where required, and to advise this office of such authorities’ reactions when
received.
3. The filing period is 10 December – 18 December 2014 and the intended effectiveness
and implementation date is 01 June 2015.
4. You are reminded that these Resolutions will be declared effective upon receipt of the
required Government approvals, in accordance with Resolutions 001 and 006.
Javier Gallego Alonso
Director, FDS Operations
Finally Adopted Resolutions adopted at:
Thirty-seventh Passenger Agency Conference (PAConf/37)
San Diego, California, USA, 16 and 17 October 2014
OUTLINE OF CONTENTS AND STATUS OF EFFECTIVENESS
Intended Effective Date: 01 June 2015
Resolution
Title
PAC2(5051)800
PAC3(5051)800
PAC1(5051)800a (except USA)
PAC2(5051)800a
PAC3(5051)800a
PAC1(5051)800f (except USA)
PAC2(5051)800f
PAC3(5051)800f
PAC1(5051)818g (except USA)
PAC2(5051)818g
PAC3(5051)818g
Passenger Sales Agency Rules
PAC1(5051)820e (except USA)
PAC2(5051)820e
PAC3(5051)820e
PAC1(4751)822
PAC2(4751)822
PAC3(4751)822
PAC1(5051)850 (except USA)
PAC2(5051)850
PAC3(5051)850
PAC1(5051)850p(except USA)
PAC2(5051)850p
PAC3(5051)850p
PAC1(5051)854(except USA)
PAC2(5051)854
PAC3(5051)854
PAC1(5051)866(except USA)
PAC2(5051)866
PAC3(5051)866
Page | 1
Application Form for Accreditation
as an IATA Passenger Sales
Agent
Agents’ Financial Evaluation
Criteria
Page
2-4
5
PAConf/37
Agenda
Item(s)
R10, R15,
R17
R12
6-11
R14
Passenger Sales Agency Rules
12-16
Reviews by the Travel Agency
Commissioner
17-18
R1.1, R1.2,
R2, R3, R4,
R10, R15,
R17, R43,
R50
R17, R26
IATA Numeric Code
19-21
R11
Billing and Settlement Plans
22-23
R6, R7, R8,
R17
Financial Securities
324-26
R22, R39
Electronic Ticketing Systems in
Billing and Settlement Plan
Countries/Areas
Definitions of Terms Used in
Passenger Agency Programme
Resolutions
27-29
R45
30
R39
Resolution 800
PASSENGER SALES AGENCY RULES
(Amending)
PAC2(5051)800
PAC3(5051)800
Expiry:
Type:
Indefinite
B
1. Amend Resolution 800 as shown below:
3.4.1.2 applications for approval of changes of ownership or legal status referred by
the Agency Administrator following his countersignature of the Notice of Change form
execution of provisional Sales Agency Agreement or his granting of provisional
approvals, as the case may be, in accordance with Section 11;
3.5.1.2 any Member or Airline having issued an Electronic Ticketing
Authority to an Agent, may cancel such authority in respect of the Agent, or any
Location of the Agent by so notifying the Agent in writing or by updating the relevant
information online through the BSPlink system;
3.5.1.3 if the update is not performed electronically on BSPlink, the Member or
Airline shall simultaneously advise the BSP of the removal of the Electronic
Ticketing Authority and the BSP Manager shall instruct the System to
inhibit Electronic Ticketing issuance on behalf of that Member or Airline.
11.3.2 on receipt of a Notice of Change form and a duly completed application in time
to enable the Agency Administrator to process the application, the Agency
Administrator shall execute a provisional Sales Agency Agreement countersign the
Notice of Change form with the transferee unless the application reveals or the
Agency Administrator has reason to believe that the application should be
disapproved because it does not meet one or more of the criteria set out in
Subparagraphs […]. Nevertheless if prior to the processing by the Agency
Investigation Panel of the application the applicant eliminates the grounds of
disapproval to the satisfaction of the Agency Administrator, the Agency Administrator
shall execute a provisional Sales Agency Agreement countersign the Notice of
Change form with the transferee;
11.3.3 the transferee’s provisional Sales Agency Agreement Notice of Change form
countersigned by the Agency Administrator shall take effect from the date when the
change of ownership and/or legal status takes place. The transferor’s Sales Agency
Agreement shall terminate or cease to apply to the Location concerned as of the date
when the change of ownership and/or legal status takes place, without prejudice to
the fulfilment of all obligations accrued prior to the date of termination;
11.3.4 a provisional Sales Agency Agreement shall Notice of Change form will be in
the same form and have the same effect as a Sales Agency Agreement. The Agency
Administrator shall notify all Members of the execution of a provisional agreement
Notice of Change form and on receipt of such notice Members may do business with
Page | 2
the transferee as if he were an Accredited Agent. A provisional Sales Agency
Agreement shall Notice of Change form will remain in effect until the Agency
Investigation Panel has processed the application; provided that, if at any time
between the effective date of the provisional Sales Agency Agreement Notice of
Change form and the processing by the Agency Investigation Panel, information
becomes available to the Agency Administrator which causes him to believe that the
transferee fails to meet one or more of the criteria referred to in Subparagraph 11.3.2
of this Paragraph, the Agency Administrator shall notify all Members accordingly;
11.3.5 if the Agency Administrator is unable to execute a Sales Agency Agreement
either because the applicant does not meet the criteria for approval or because
insufficient notice of the proposed change has been given to enable the Agency
Administrator to process the application, the Agency Administrator shall notify all
Members accordingly. If subsequent to the above action but prior to the next meeting
of the Agency Investigation Panel the transferee has removed the grounds that
prevented execution of a provisional agreement Sales Agency Agreement the
Agency Administrator acting under Subparagraph 11.3.2 of this Paragraph may
execute such agreement pending final processing at the next appropriate meeting of
the Agency Investigation Panel.
11.6.1 in the case of a change processed under the provisions of Subparagraph
11.3.2 of this Section, if the application is approved, the provisional Sales Agency
Agreement shall cease to be provisional and shall become a Sales Agency
Agreement with effect from the date of such approval will be signed by the transferee
and by the Agency Administrator. The Agency Administrator shall notify the
transferee and all Members accordingly and shall make any necessary amendment
to the Agency List;
11.7 EFFECT OF DISAPPROVAL
11.7.1(a) if the application is disapproved and the change of ownership has already
taken place, the Agency Administrator shall notify the Agent (or transferor), the
transferee and all Members accordingly, and shall simultaneously;
11.7.1(a)(i) in the case of changes described in Subparagraph 11.2.1 or in Paragraph
11.2.2 of this Section, by notice to the transferor confirm that its Sales Agency
Agreement, or its application to the Location concerned, terminated at the date when
the change of ownership took place, and by notice to the transferee terminate its
provisional Sales Agency Agreement, if executed the Notice of Change form will no
longer have effect as a Sales Agency Agreement,
Section 14 – Measures Affecting an IATA Agent’s Standing
14.1 EFFECT OF REPRIMAND
When a reprimand is issued to an Agent under any of the provisions of these Rules
the Agency Administrator shall record the reprimand against the Agent and notify the
Agent that this has been done.
Page | 3
Section 15 - Indemnities and Waiver
15.2 the Agent recognises that Members (whether acting individually or collectively),
the Director General, the Agency Administrator, and ISS Management are required to
issue notices, give directions, and take other action pursuant to these Rules and
other applicable Resolutions, including in the circumstances therein provided giving
notices of irregularity and default, notices of alleged violations and notices of grounds
for removing an Agent or any of its Locations from the Agency List or for
reprimanding an Agent. […]”
Filing Period
10-18 December 2014
Page | 4
Effective/Implementation Date
01 June 2015
Resolution 800a
APPLICATION FORM FOR ACCREDITATION AS AN IATA
PASSENGER SALES AGENT
(Amending)
PAC1(501)800a (except USA)
PAC2(501)800a
PAC3(501)800a
Expiry: Indefinite
Type: B
Amend Resolution 800a as shown below:
8.7 Please indicate the GDS with which you have signed a contract:
Filing Period
10-18 December 2014
Page | 5
Effective/Implementation Date
01 June 2015
Resolution 800f
AGENTS’ FINANCIAL EVALUATION CRITERIA
(Amending)
PAC1(5051)800f (except USA)
PAC2(5051)800f
PAC3(5051)800f
Expiry: Indefinite
Type: B
Amend Resolution 800f, Appendix ‘A’, as shown below:
AGENTS' FINANCIAL EVALUATION CRITERIA
1. GENERAL RULE
1.1 Audited Accounts means accounts reviewed by an auditor recognised as
competent by the regulatory authority in that country to perform an audit that are
provided to IATA. Certified accounts will be applicable in those countries where
APJCs accept certified accounts according to local law. In all instances the
established accounting rules in a country will apply.
1.2 If an Agent provides Audited Accounts to IATA with an audit report or local
regulatory equivalent in relation to the possibility to apply the financial tests under
Section 2 and:
1.2.1 the qualified audit report does not set out the adjustments which
should be made to the Audited Accounts to enable the auditor to provide an
unqualified audit report, the Agent will be required to provide a Financial
Security calculated in accordance with the amount at risk applicable to the
Agent under this Resolution.
1.2.2 the qualified audit report does set out the adjustments which
should be made to the Audited Accounts to enable the auditor to provide an
unqualified audit opinion report, the Audited Accounts will be referred to a third
party financial assessor selected by IATA who will determine how the Audited
Accounts will be restated as a result of adjustments set out in the qualified audit
opinion report. The restated Audited Accounts will be used in the financial
assessment subject to the financial tests set out in Section 2.
1.2.3 The determination made by the third party financial assessor under section
1.2.2 will be final, subject to the provisions of Resolution 820e.
Multiple IATA Numeric Codes
1.3 If an Agent is granted an additional IATA numeric code(s) then any
Financial Security already provided by the Agent will be re-calculated based on
the gross BSP sales 60 days after the date that the additional IATA numeric
code(s) is granted based on the Amount at Risk applicable to that Agent.
Page | 6
2. 1 . CRITERIA FOR EVALUATION OF AGENTS' ACCOUNTS
21.1 All financial information used in the financial criteria will be extracted from the
Agent's Audited Accounts.
2.2 If an Agent's Audited Accounts are adjusted and restated in accordance with
Section 1.2.2 of this Resolution 800f, the restated accounts must be used in
calculating the financial tests set out in sections 2.3.1–2.3.5 below.
2.3 1.2 The following financial tests apply to the evaluation of an Agent's Audited
Accounts:
2.3.1 1.2.1 There must be positive Net Equity.
2.3.2 1.2.2 Net Equity divided by long-term debt and other long-term liabilities must
be greater than 0.5.
2.3.3 1.2.3 EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortisation
and extraordinary items) must be positive save in exceptional circumstances.
2.3.4 1.2.4 The EBITDA must exceed the interest payable Interest Expense by a
factor of a minimum of two and ideally three.
2.3.5 1.2.5 Adjusted Current Assets must exceed Current Liabilities.
1.2.6 The Audited Accounts must not have a qualified audit opinion or local regulatory
equivalent.
2. ANNUAL FINANCIAL REVIEWS
Agents accredited for two years or less
32.1 All Agents must provide Audited Accounts not more than 12 months old at the
time of submission to become an Agent for the purposes of evaluation against the
financial tests in Section 2 1 of this Resolution 800f. If an Agent has been in
business for less than 12 months at the time of application, an opening balance
sheet must be provided instead.
32.2 All Agents must provide Audited Accounts no later than 4 months after
each financial year end, or as required by legislation, during the first two
years of accreditation for the purposes of evaluation against the financial tests in
Section 1 of this Resolution 800f.
32.3 All Agents must provide a Financial Security during the first two years as an
Agent in accordance with Section 54 of this Resolution 800f.
Agents accredited for more than two years
32.4 All Agents must provide Audited Accounts no later than 4 months after
each financial year end, or as required by legislation, of that Agent for the
purposes of evaluation against the financial tests in Section 2 1 of this Resolution
800f.
Page | 7
32.5 If an Agent passes all the financial tests and satisfies all the points below, the
Agent will not be required to provide IATA with a Financial Security:
32.5.1 The Agent has not had any of the following in the last 12 months:
(i) a default (including defaults resulting from an accumulation of
irregularities) and removal from the Agency List.
(ii) a change of ownership subject to the conditions in Section 65.
32.5.2 The Agent also passed all of the financial tests under Section 21 of this
Resolution 800f based on the Audited Accounts provided for the previous two years.
32.6 If an Agent fails to pass any of the financial tests, the Agent must provide a
Financial Security in accordance with Section 54 of this Resolution 800f.
43. INTERIM FINANCIAL REVIEWS
43.1 For any Financial Review conducted for cause at a time other than in
respect of an Agent's financial year end, IATA may conduct a Financial Review in
accordance with Section 3 2 of this Resolution 800f, as applicable to that Agent by
reviewing the internal monthly management accounts of the Agent showing the
results for each month since the last accounting date, the cumulative results to date
and the latest balance sheet.
54. FINANCIAL SECURITY
54.1 An Agent will not be accredited or will not continue to be accredited until any
Financial Security required to be provided to IATA has been received by IATA and
confirmed to IATA by way of written confirmation received directly from the third
party supporting the Financial Security that the Financial Security was issued by
that third party and is valid.
54.2 Financial Securities will be subject to a minimum notice of termination period on
the part of the Financial Security Provider of ninety (90) days and ideally be valid for
an unlimited period but will be expected to be valid for a minimum of at least one
year.
4.2.1 If an Agent is granted an additional IATA numeric code(s) then any Financial
Security already provided by the Agent will be re-calculated based on the gross BSP
sales 60 days after the date that the additional IATA numeric code(s) is granted based
on the Amount at Risk applicable to that Agent.
54.3 For the purposes of calculating the amount of a Financial Security the following
definitions apply:
54.3.1 “Days' Sales at Risk” means the number of days from the beginning of the
Agent's Reporting Period to the Remittance Date in respect of that Reporting
Period or Periods, plus a margin of up to five days.
54.3.2 “Amount at Risk” is calculated by dividing the Days' Sales at Risk by 90 days,
and applying that percentage to the BSP cash turnover, or cash turnover as
applicable, amount the Agent made in the three month period referred to in
Section 54.5 or 54.7 of this Resolution 800f, as applicable:
‘Amount at Risk’= “Days’ Sales At Risk” × BSP cash turnover in applicable 3 month period
90
Page | 8
Agents accredited for two years or less
54.4 All Agents must provide a Financial Security with a minimum amount of USD
50,000 to be accredited.
54.5 After the first three months of accreditation and after the first 12 months of
accreditation, the amount of the Financial Security required must cover at a
minimum the higher of:
54.5.1 the Amount at Risk calculated as per Section 54.3 using the cash turnover
amount equal to the average net monthly cash sales of the Agent during the previous
three month period; or
54.5.2 USD 50,000.
If the existing Financial Security is insufficient to cover the Amount at Risk, the
amount of the Financial Security required will be increased to cover the Amount at
Risk.
54.6 Except for the amount of the initial Financial Security, all calculations of the
amount of Financial Security required under this Resolution 800f or the Passenger
Sales Agency Rules for Agents accredited for two years or less will be reviewed
and calculated under Section 54.5 of this Resolution 800f.
Agents accredited for more than two years
54.7 The amount of the Financial Security required must cover at a minimum the
Amount at Risk calculated as per Section 54.3 using the BSP cash turnover,
or cash turnover as applicable, amount equal to the average of the 3 months
highest net cash sales in the previous 12 months. If the existing Financial
Security is insufficient to cover the Amount at Risk, the amount of the Financial
Security required will be increased to cover the Amount at Risk.
54.8 All calculations of the amount of Financial Security required under this
Resolution 800f or the Passenger Sales Agency Rules for Agents accredited for
more than two years will be calculated under Section 54.7 of this Resolution
800f.
65. CHANGES IN OWNERSHIP
65.1 This section applies to all changes in ownership or control or any other
Review resulting from a change of ownership or control of the Agent in accordance
with the Passenger Sales Agency Rules.
65.2 The Agent must provide Audited Accounts, no later than 90 days after the
change of ownership or control is effected. The Accounts must cover a period of 12
months including, at a minimum, the first month after the change of ownership or
control takes effect and IATA will use these Accounts to conduct the Financial
Review applicable to the Agent under this Resolution 800f.
65.3 For Agents that have a change in ownership or control that necessitates a new
Passenger Sales Agency Agreement, consideration will be given by the local APJC
as to whether a Financial Security is required.
Page | 9
65. CHANGES IN FINANCIAL YEAR END
65.1 All Agents must notify IATA immediately of a change in its financial year-end.
65.2 The Agent must provide both:
65.2.1 Audited Accounts within 60 days after the change is made and IATA will
conduct the Financial Review applicable to the Agent under this Resolution 800f.
65.2.2 Audited Accounts for the financial year end that would have applied to
the Agent before the Agent changed its financial year end. These must be
provided to IATA within 60 days of the former financial year end.
87. SIGNIFICANT CHANGE IN GROSS BSP SALES
87.1 A significant change means any change in the business of the Agent
which results in a change in gross BSP sales of more than 20% as compared
to the previous 12 months. A change can be an increase or a decrease in gross
BSP sales.
87.2 An Agent must notify IATA of any significant change as soon as the Agent
becomes aware of it.
87.3 An interim Financial Review may also be initiated by IATA where IATA
becomes aware of a significant change in gross BSP sales in accordance with
Section 4 3.
DEFINITIONS OF TERMS USED IN THESE GUIDELINES
Adjusted Current Assets–are defined as Current Assets as in the Balance Sheet of
the Accounts after deducting:
– Stocks and work in progress,
– Deposits given to third parties other than IATA,
–
Loans to Directors, Associate Companies, (including any subsidiary, associate
or company under common ownership),
– Doubtful debtors,
– Blocked funds, except for funds held in favour of IATA.
These generic descriptions may be modified to terms specifically defined under the
applicable local Generally Accepted Accounting Principles (GAAP) and disclosed in
the financial statements.
Audited Accounts means the Agent’s financial and accounting records and
procedures that have been reviewed and certified by an auditor recognized as
competent by the regulatory authority in that country to perform an audit that are
provided to IATA and which includes the auditor’s opinion of those accounts.
Certified accounts will be applicable in those countries where APJCs accept certified
accounts according to local law. In all instances the established accounting rules in a
country will apply.
Current Liabilities – are defined as Current Liabilities as in the Balance Sheet of
the Accounts.
EBITDA–Earnings Before Interest, Taxation, Depreciation and Amortisation.
Page | 10
Financial Irregularity means an irregularity applied as a result of any failure to
adhere to the reporting and remittance procedures described in Resolution
818g Attachment “A” including but not limited to those irregularities described in
Resolution 818g Attachment “A”.
Financial Review means a review of an Agent's financial position or the calculation
of the amount of Financial Security required in accordance with this Resolution
800f, or both.
Interest Expense means an income statement account which is used to report the
amount of interest incurred on debt during a period of time.
Irregularity means any irregularity applied under the Passenger Sales Agency
Rules for non-compliance with those Rules including but not limited to Financial
Irregularities.
Net
–
–
–
–
–
Equity or Shareholders'/Owners' Funds–consists of:
Share capital
Share premium
Retained earnings
Other distributable reserves
Shareholder's loans if subordinated less declared dividends.
Long Term Debt – All debt liabilities where repayment is due more than twelve
months after the end of the financial period.
Long Term Liabilities – all liabilities where repayment is due more than twelve
months after the end of the financial period.
Review means any assessment or evaluation of an Agent's continuing compliance
with the Passenger Sales Agency Rules.
Filing Period
10-18 December 2014
Page | 11
Effective/Implementation Date
01 June 2015
Resolution 818g
PASSENGER SALES AGENCY RULES
(Amending)
PAC1(5051)818g (except USA)
PAC2(5051)818g
PAC3(5051)818g
Expiry:
Indefinite
Type:
B
1. Amend Resolution 818g as follows:
2.2.2 if subsequent to the action taken under Subparagraphs 2.2.1.1 through 2.2.1.3
2.2.1 above, but prior to the removal date, the Agent satisfies IATA that the
prescribed conditions have been met, the removal shall not take place, the double
irregularity shall remain in place and IATA shall notify the Agent and all BSP Airlines
accordingly;
2.5 ELECTRONIC TICKETING (ET)
The following provisions shall apply in any country/area in which a BSP is in
operation, where Electronic Ticketing has been implemented.
2.5.1 Granting and Termination of Electronic Ticketing Authority
2.5.1.1 a BSP Airline participating in the Billing and Settlement Plan may
issue an ET Authority to a Head or Branch Office Location of the Agent;
2.5.1.2 any BSP Airline having issued an Electronic Ticketing Authority to an
Agent, may cancel such authority in respect of the Agent, or any Location of the
Agent by so notifying the Agent in writing or by updating the relevant information
online through the BSPlink system;
2.5.1.3 if the update is not performed electronically in BSPlink, the BSP Airline shall
simultaneously advise the BSP of the removal of the Electronic Ticketing Authority
and the BSP Manager shall instruct the Ticketing System to inhibit Electronic
Ticketing issuance on behalf of that BSP Airline;
3.2.4 IATA will may arrange for at least one an inspection to assist in determining
whether the applicant meets the qualifications necessary to become an Accredited
Agent or for a Branch Office Location, as applicable. IATA may arrange for an
inspection, to determine whether an Agent meets the qualifications necessary for a
Branch Office Location;
10.3.6 the provisional Sales Agency Agreement Notice of Change form, if executed,
shall take effect from the date when the change takes place. The previous Sales
Agency Agreement will then terminate or cease to apply to the Location concerned
Page | 12
as of the date when the change takes place, without prejudice to the fulfilment of all
obligations accrued prior to the date of termination;
10.3.7 the Agency Administrator shall notify all BSP Airlines of the countersignature
of the Notice of Change form execution of the provisional agreement and on receipt
of such notice BSP Airlines may do business with the Agent or the new owner as if it
were an Accredited Agent.
10.5.2 if the report shows that the requirements are satisfied, the Agency
Administrator shall notify the Agent or the new owner that the provisional Sales
Agency Agreement shall cease to be provisional and shall become and sign a Sales
Agency Agreement with the Agent or the new owner effective 15 days from the date
of the publication by the Agency Administrator. The Agency Administrator shall notify
all BSP Airlines accordingly and, when required, make any necessary amendment to
the Agency List.
10.6 EFFECT OF DISAPPROVAL
10.6.1(a) if the Agency Administrator is unable to execute a Sales Agency
Agreement with the Agent or, if applicable, the new owner, the Agency Administrator
shall promptly notify the Agent and/or the new owner and shall, simultaneously;
10.6.1(a)(i) in cases of a change requiring a new Agreement, by notice to the Agent
and, if applicable, the new owner, confirm that the Sales Agency Agreement or the
application for accreditation to the Location concerned terminated on the date when
the change of ownership took place, and by notice to the new owner, terminate the
provisional Sales Agency Agreement, if executed, the Notice of Change form will no
longer have effect as a Sales Agency Agreement,
10.8 CHANGE OF LOCATION OR NAME
10.8.1(a) when an Agent moves from an Approved Location to another location not
so approved, such Agent shall:
10.8.1(a)(i) as far in advance as possible but in any case before effecting the move
not later than 30 days after effecting the move, notify the Agency Administrator of the
new address and remit the appropriate fee,
10.8.1(a)(ii) if requested submit as soon as practicable two photographs of the
interior and exterior of the new location;
[…]
10.8.2(a) when an Agent changes its name, such Agent shall:
10.8.2(a)(i) as far in advance as possible but in any case before effecting the
change, providing it can legally do so, notify promptly the Agency Administrator of the
new name, and
10.8.2(a)(ii) remit the appropriate application fee;
[…]
Page | 13
10.12 LATE NOTIFICATION OR ABSENCE OF NOTIFICATION OF CHANGE
10.12.1 in respect of a change of ownership or status if the notification and, when
required, the completed application is not received by the Agency Administrator or is
received after the change has taken place, the Agency Administrator shall will
remove the STDs and the Agent will be informed by IATA to provide the required
Notice of Change form within 5 days. If within 5 days the Agent provides the required
Notice of Change form, the removal of STDs will no longer apply. If within 5 days the
Agent does not revert to its previous ownership or submit the required Notice of
Change form then the Agent will be given notice of termination of the Sales Agency
Agreement. From the Agency List and notify the transferor that its Sales Agency
Agreement is terminated as of the date of the change. The Agency Administrator
shall notify all BSP Airlines accordingly and the provisions of Subparagraph 13.4.1 of
Section 13 of these Rules shall apply. The transferor or Agent may within 30 days of
the dte of the notice of termination removal of STDs notice invoke the procedures set
out in Resolution 820e for review of the Agency Administrator’s action by the Travel
Agency Commissioner and may also apply for an interlocutory order staying
termination or removal pending the outcome of the review. Before granting an
interlocutory order under this Subparagraph, the Commissioner shall require the
Agent to provide a bank or other financial guarantee. Any future application from the
transferee shall be processed in accordance with the provisions of Section 3 of these
Rules;
10.12.2 failure to notify the Agency Administrator of a change of name within 30 days
of prior to the change being made can will result in a removal of the STDs and the
Agent will be informed by IATA to provide the required application for a change of
name within 5 days.double irregularity being recorded and a review to ensure such
?Agent continues to meet the Accreditation criteria. The notice of double irregularity
and the cost of undertaking the review, which shall be paid for by the Agent, will be
confirmed in writing. If within 5 days the Agent provides the required application for
a change of name, the removal of STDs will no longer apply. If within a further 30 5
days the Agent does not revert to its approved name or submit the required
application for a change of name then the Agent shall will be given notice of
termination of the Sales Agency Agreement and this will result in the removal of
STDs. . The termination shall take effect on a date that is not before the date
specified in clause 13.2 of the Sales Agency Agreement. The Agent may within 30
days of the date of a double irregularity the removal of STDs notice invoke
Resolution 820e for review of the Agency Administrator’s action by the Travel Agency
Commissioner and may also apply for an interlocutory order staying removal of STDs
and termination pending the outcome of the review.
13.4 EFFECT OF REMOVAL OR SUSPENSION OR REPRIMAND
13.4.3 Reprimand
when a reprimand is issued to an Agent under any of the provisions of these Rules,
the Agency Administrator shall record it against the Agent and notify the Agent that
this has been done.
14.3.3 if an Agent whose Agreement had been terminated under Subparagraph
14.3.3 14.3.2 of this Paragraph subsequently remits the correct fees within 30 days,
Page | 14
following such termination, the Agency Administrator may reinstate the accreditation
of an Agent. Such Agent’s name shall then be re-entered on the Agency List and a
Sales Agency Agreement shall be executed or re-instated;
Section 15-Indemnities and Waiver
15.2 the Agent recognises that BSP Airlines (whether acting individually or
collectively), the Director General, the Agency Administrator, are required to issue
notices, give directions, and take other action pursuant to these Rules and other
applicable Resolutions, including in the circumstances therein provided giving notices
of irregularity and default, notices of alleged violations and notices of grounds for
removing an Agent or any of its Locations from the Agency List or for reprimanding
an Agent. […]”
2. Amend Resolution 818g Attachment ‘A’ as shown below:
1.6.2.1(a) if the Remittance Frequency so established is monthly, Remittances shall
reach the Clearing Bank not later than its close of business on the date established
by the Conference. This date shall not be earlier than the tenth nor later than the
fifteenth day of the month following the month covered by the Billing,
AND
1.6.2.1(b) Whereso agreed by the PAConf if the Remittance Frequency so
established is monthly, Remittances shall reach the Clearing Bank on the date
established by the Conference which shall not be earlier than the tenth nor later
than the fifteenth day of the month following the month covered by the Billing;
provided that the method of payment used assures that the funds are in the Clearing
Bank in time for the Remittance to be made into the BSP Airlines’ account on the
date so established.
1.7.4.3 In all cases a bank letter must be provided to IATA:
(i) The original bank letter must be sent to IATA within 10 working days by
registered post or courier, fax or as a scanned copy via email stating the
nature of the error and reason for the delay in remittance;
(ii) A copy of the bank letter may be sent to IATA via fax or as a scanned copy
via email;
(iii) The bank letter must be signed by a Manager including name, job title or
designation;
(iv) The bank letter must stipulate that the Agent had sufficient available funds on
Remittance Date in the stipulated bank account(s), stating the account
name and the account number(s).
1.10.5 Disputes and Withdrawal of Defaults
1.10.5(a) an Agent may register the existence of a dispute with the Agency
Administrator over a billing of a specified amount as part of its billing. Provided
written evidence of such dispute is provided by the Agent to the Agency
Administrator, the Agency Administrator will ensure that no irregularity or default
action will be applied, except where notification is received that the Aagent has failed
Page | 15
to comply with the provisions of Resolution 890 and action as proscribed prescribed
under paragraph 1.7.7 of these rules is being taken by the Agency Administrator;
2.3.1(c) following reinstatement the Agency Administrator shall conduct a financial
review of the Agent to determine if the Agent is still required to furnish a guarantee
meets the Local Financial Criteria. Such review will only be conducted based on the
financial position and audited accounts of the Agent dated no earlier than 6 months
following the date of reinstatement and full settlement of all previous outstanding
amounts, and not later than the next annual financial review after this date. He/she
The Agency Administrator may, by letter to the Agent request that documents be
provided by a specific date which date shall be no earlier than seven days from the
date of the request
3. Amend Resolution 818g Attachment ‘B’ adding a box for countersignature
by IATA in the Notice of Change form:
RECEIVED AND ACKNOWLEGED:
……………………………………………..
IATA Agency Administrator
Dated:………………………………………..
Filing Period
10-18 December 2014
Page | 16
Effective/Implementation Date
01 June 2015
Resolution 820e
REVIEWS BY THE TRAVEL AGENCY COMMISSIONER
(Amending)
PAC1(5051)820e (except USA)
PAC2(5051)820e
PAC3(5051)820e
Expiry: Indefinite
Type: B
Amend Resolution 820e as shown below:
1.2.2.4 where a request for review is accompanied by an application for interlocutory
relief to stay action by the Agency Administrator, the Commissioner may grant the
interlocutory relief, if:
a) Acceptance of the request for review is within the Commissioner’s jurisdiction; and
b) The Applicant makes an appropriate showing in support of its application for
appropriate interlocutory relief; and
c) The Commissioner decides after affording the Agency Administrator, Member or
other respondent the opportunity to respond, that interlocutory relief is appropriate
and can be granted without materially affecting any airline credit risk.
The Commissioner may grant the interlocutory relief. In addition to those Resolutions,
which provide that the Commissioner shall require, as a condition for granting any
request by an Agent/applicant for interlocutory relief, that the Agent/Applicant provide
a bank or any other form of financial guarantee, if airline funds are considered to be
at risk., the Commissioner, the Commissioner shall have the power to require an
Agent/applicant to provide such a guarantee in other circumstances he deems
appropriate, or upon an appropriate an appropriate showing by the Agency
Administrator, Member or other respondent, as the case may be. The bank or other
guarantee shall cover the amount in dispute or any other amount deemed
appropriate by the Commissioner in light, in particular, of the financial risk associated
with the dispute. The Commissioner may require if appropriate an immediate
accounting and settlement of all monies due at the time the interlocutory order takes
effect. If there is no financial risk associated with the dispute, the interlocutory relief
may be granted upon the Commissioner’s decision without requiring any form of
financial guarantee. The Commissioner may, in addition or in the alternative, require
an immediate accounting and settlement of all monies due at the time the
interlocutory order takes effect. (…)”.
Page | 17
3.3 DECISIONS OR REVIEWS INITIATED BY THE AGENCY ADMINISTRATOR
Consequent on a review initiated by the Agency Administrator, the Commissioner
may decide that one or more of the following actions be taken:
3.3.4 the Agent be reprimanded
Filing Period
10-18 December 2014
Page | 18
Effective/Implementation Date
01 June 2015
Resolution 822
IATA NUMERIC CODE
(Amending)
PAC1(4751)822
PAC2(4751)822
PAC3(4751)822
Expiry:
Indefinite
Type:
A
Amend Resolution 822 as shown below:
Section 4—VALIDATOR
SETTLEMENT PLAN
DIES
OR
PLATES—OUTSIDE
BILLING
AND
4.1 validation of Traffic Documents at places to which an IATA Numeric Code has
been allocated shall be effected by t he elect r onic t ick et ing ser vice
pr ovider in accor dan ce wit h t he pr o visio ns of Resolut ion 85 4 . use of a
validator with a metal or plastic die or plate. The use of a rubber or plastic
stamp for such purpose shall not be permissible. The specifications of the validator die or plate shall be as follows:
4.1.1 maximum size 3.5 cm. (1 in.) width by 2.8 cm. (1 in.) depth;
4.1.2(a) dies or plates shall set forth information as illustrated
each location in the following sequence:
herein
for
4.1.2(a)(i) name of issuing entity,
4.1.2(a)(ii) IATA Numeric Code of location,
4.1.2(a)(iii) date of issue, with day and year in figures and month abbreviated in
three alpha characters such as JAN/APR/JUL/OCT/ etc.,
4.1.2(a)(iv) street address (optional),
4.1.2(a)(v) city and country,
Note: the country when abbreviated shall be shown by using the International
Standards Organisation (ISO) code
4.1.2(b) Examples:
AGENT X Y Z
20-2 0000 3
30 APR 90
RUE DE LYON 8
GENEVA/SWITZERLAND
Page | 19
AGENT X Y Z
20-2 0000 3
30 APR 90
RUE DE LYON 8
GENEVA/CH
4.1.2(c) Exception:
when passenger accountable forms are validated by imprinter, the location
information may be divided for entry in more than one position, with the order
sequence varied as well,
4.1.2(d) Examples:
20-2 0000 3
AGENT X Y Z
30 APR 90
RUE DE LYON 8
GENEVA/SWITZERLAND
20-2 0000 3
AGENT X Y Z
30 APR 90
RUE DE LYON 8
GENEVA/CH
4.1.3 IATA Agents shall, upon request, furnish the Agency Administrator
with an impression of the validator die or plate for each Approved Location;
Section 5—VALIDATION OF PAPER AUTOMATED TRAFFIC DOCUMENTS *
when automated Traffic Documents are issued, the data specified in
Subparagraph 4.1.2(a) of this Resolution, if computer generated, shall be shown
in accordance with the provisions of the applicable Passenger Services
Conference Resolution.
Section 6—LEGIBILITY OF IATA NUMERIC CODE
particular care shall be exercised to ensure that the IATA Numeric Code is clearly
legible on each coupon of the Traffic Document issued.
Section 7 5 —PUBLICATION
the IATA Numeric Codes allocated pursuant to Subparagraphs 3.1.1, and 3.1.3
of this Resolution shall be published by the Agency Administrator as directed by
the Passenger Agency Conference; ARC and IATAN shall be responsible for the
publication of IATA Numeric Codes made available to them pursuant to
Subparagraph 3.1.2 of this Resolution.
Section 8—THEFT OR DISAPPEARANCE OF VALIDATOR DIES OR PLATES
in the event of the theft, loss or disappearance of a validator die or plate
bearing an IATA Numeric Codes allocated pursuant to Subparagraph 3.1.1 or
3.1.3 of this Resolution, the party to which such IATA Numeric Codes has been
allocated shall immediately notify the Agency Administrator. Immediately upon
receipt of such notifi- cation, the Agency Administrator shall, if circumstances
warrant, allocate a new IATA Numeric Codes and advise the notifying party and
all Members, Thereafter, the notifying party shall, in respect of the location
concerned, destroy any validator dies or plates in its possession and replace them
by new validator dies or plates bearing the newly allocated IATA Numeric Codes.
Page | 20
Section 9 6—REVIEW OF AGENT
failure by an IATA Agent without good cause to comply with any of the
requirements provided herein shall constitute adequate grounds for the Agency
Administrator to initiate review under the provisions of the Sales Agency Rules.
*
Note: this provision is not applicable in IATA BSPs
Filing Period
10-18 December 2014
Page | 21
Effective/Implementation Date
01 June 2015
Resolution 850
BILLING AND SETTLEMENT PLANS
(Amending)
PAC1(5051)850 (except USA)
PAC2(5051)850
PAC3(5051)850
Expiry: Indefinite
Type: B
1. Amend Resolution 850, Paragraph 14, as shown below:
14. VOLUNTARY TERMINATION
14.1 a BSP Airline may withdraw from a given BSP by serving written notice of not
less than three months, nor more than 13 months. The length of the notice shall be
mutually agreed between ISS Management and the BSP Airline. It shall take into
account the extent of negative impact, on other BSP Airlines’ costs, the terms of that
BSP’s contracts with suppliers and the likely effect of that particular carrier’s
withdrawal on the BSP Airlines’ continuing participation in the BSP concerned. As a
minimum, the BSP Airline and shall be liable for their share of management and
other established fees for the calendar year in which they serve notice of withdrawal;
all costs through to the end of the notice period.
14.2 a BSP Airline terminating its participation without giving the minimum period of
advance notice, shall pay their share of the Management and the otter costs, in the
same way as if ist participation had continued to the end of the 13 month notice
period. Where a BSP Airline terminates its operations to the country or area of a
BSP, no such payment need be made.
2. Amend Resolution 850 Attachment ‘C’ Counterindemnity Agreement by
adding a footnote as shown below:
This document must be signed at the Airline’s Head Office, by the Chief Executive
Officer, Chief Financial Officer or Director General.
3. Amend Resolution 850 Attachment ‘E’ as shown below:
3. The Airline acknowledges that it has received copies of the following documents
together with such explanation of their contents as it requires:
(a) Passenger Agency Conference Resolution 892 (Dis- closing another
Member's Position taken at an IATA Meeting);
(b) The applicable Resolution for the Passenger Sales Agency
Rules
appertaining to that BSP, i.e. Application of Minimum Security Standards
for premises and systems; Reprimand, Suspension, Removal or Voluntary
Relinquishment;
Reviews
under
Authority of IATA Travel Agency
Commissioner;
Page | 22
4. Amend Resolution 850 Attachment ‘E’ Form of Concurrence by adding a
footnote as shown below:
This document must be signed at the Airline’s Head Office, by the Chief Executive
Officer, Chief Financial Officer or Director General.
Filing Period
10-18 December 2014
Page | 23
Effective/Implementation Date
01 June 2015
Resolution 850p
FINANCIAL SECURITIES
(Amending)
PAC1(5051)850p(except USA)
PAC2(5051)850p
PAC3(5051)850p
Expiry:
Indefinite
Type:
B
1. Amend Resolution 850p as follows:
“WHEREAS certain Sales Agency Rules provide that an Agents may meet the
financial criteria by the provision of additional a financial security in the form of a
bank guarantee, insurance bond, or default insurance scheme (“DIP”
scheme)(including trust fund);”
“WHEREAS the Passenger Agency Conference (hereafter referred to as “the
conference”) wishes to make a wide range of Financial Securities available to
Agents; and
WHEREAS non-payment of a claim against a provider of such Financial Security will
result in financial loss to Members and Airlines;
It is hereby RESOLVED that,
1. DEFINITIONS
1.1 The definitions of terms and expressions used in this Resolution are contained in
Resolution 866.
1.2 Bank means a financial institution that is authorised to provide banking services
in the jurisdiction in which that bank will guarantee the payment to Members or
Airlines through any acceptable Financial Security set out in section 2.1 in the event
of default by an Agent.
1.23 “FINANCIAL SECURITY PROVIDER’ (hereinafter referred to as “Provider”)
means any independent third party entity other than a bank that guarantees payment
to Members or Airlines through any acceptable Financial Security set out in section
2.2 , through provision of an insurance bond or other instrument(excluding bank
guarantees), in the event of the default of by an Agent.
Page | 24
2. ACCEPTABLE FINANCIAL SECURITY TYPES
2.1 The following individual financial security types provided by a Bank:
2.1.1 Bank Guarantee
2.1.2 Standby Letter of Credit
2.1.3 Letter of Credit
2.2 The following individual financial security types provided by a Provider:
2.2.1 Insurance bond
2.2.2 Surety bond
2.3 Default Insurance Programme
2.4 Any Provider of the acceptable financial security types in 2.2 – 2.3 are required to
meet the criteria as referred to in section 3 of Resolution 850p.
23. EVALUATION OF PROVIDERS AND THEIR PRODUCTS
23.1 IATA shall will establish criteria for the consistent evaluation and approval of
Providers and Provider products, and shall will make such criteria available to all
interested parties. The cCriteria shall will be subject to review and amendment by
IATA annually, or more frequently as may be necessary due to changes in the
Financial Security and/or the insurance markets;
23.1.1 No Provider or Provider product shall will be accepted for the purposes of an
Agent meeting the Local Financial Criteria by the provision of additional Financial
Security where permitted by the applicable Sales Agency Rules unless such Provider
or Provider product has been approved by IATA in accordance with this Resolution.
23.2 IATA shall will conduct, at a minimum, an annual review of all Providers and
Provider products previously approved by IATA. After such review(s), IATA shall will
determine whether such Provider or Provider product meets criteria in effect at that
time;
23.3 The result of the initial and periodic evaluation shall be reported to the LCAGP
and APJC as appropriate. Their views shall be relayed to IATA, who shall will decide
whether to accept financial security instruments from the Provider; after consultation
and recommendations developed with local Airlines’.
23.4 The result of the evaluation shall will be advised to the Provider, LCAGP and
APJC as applicable.
Page | 25
3. EXCEPTIONS
3.2 INDIA ONLY: Travel Agents’ Association of India (TAAI) and Travel Agents’
Federation of India (TAFI) and/or any National Association of Accredited Agents’ in
India (Association) - JOINT BANK GUARANTEE AGREEMENT. Whereas IATA may
enter into an Agreement with the Associations to provide a Financial Security subject
to all participating Airlines’ agreement on terms and conditions of the Scheme. It is
hereby RESOLVED that the aforesaid Agreement is excepted from the provisions of
this Resolution 850p insofar as the Association/s is/are accepted as a Provider/s and
the Joint Bank Guarantee Scheme/s provided by the Association/s is/are accepted as
Financial Security notwithstanding the provisions of Section 2 above
Filing Period
10-18 December 2014
Page | 26
Effective/Implementation Date
01 June 2015
Resolution 854
ELECTRONIC TICKETING SYSTEMS IN BILLING AND SETTLEMENT PLAN
COUNTRIES/AREAS
(Amending)
PAC1(5051)854(except USA)
PAC2(5051)854
PAC3(5051)854
1.
Expiry: Indefinite
Type: B
Amend Resolution 854 as shown below:
ELECTRONIC TICKETING SYSTEMS IN BILLING AND SETTLEMENT
PLAN COUNTRIES/AREAS
7.2.3 That all transmission channels used by the Electronic Ticketing Service
Provider, its agents or service providers to transmit files and reports to all
relevant entities, including but not limited to Airlines, and Data Processing
Centres, shall be PCI compliant.
7.2.4 That all Electronic Ticketing Systems Providers shall submit annually to
IATA a Certificate of Compliance as described by the PCI Security Standards
Council (SSC).
7.3 Effectiveness and Implementation
This Section 7 becomes effective as of 1 January 2014.
2.
Amend Resolution 854 Attachment ‘A’ as shown below:
2.9 fully comply with the Payment Card Industry (PCI) Data Security Standards
(DSS) as mandated by the International Card Payment Schemes, to include adjusting
its processes and procedures, at no expense to IATA, to reflect any amendments or
modifications to the PCI DSS; and, if the System Provider becomes aware that it is
no longer in full compliance with the PCI DSS, the System Provider must promptly
provide written notice to the Coordinator of such non-compliance, and in no event
should such notice be provided later than 72 hours after the System Provider
becomes aware or should have become aware of such non-compliance.
Written notice shall be provided to:
__________________________
(name
__________________________ (address).
Page | 27
of
Coordinator)
at
5. COMPLIANCE WITH PCI DSS
The System Provider agrees that if it is unable to fully comply with the PCI DSS, the
Coordinator shall review the situation with the System Provider, and the System
Provider shall propose a remediation plan not to exceed 60 days in duration. If,
following the implementation of such remediation plan, the System Provider is still
unable to fully comply with the PCI DSS, the Coordinator may, at its discretion,
terminate this agreement.
6. 5. CONFIDENTIALITY
The System Provider will take all reasonable measures to safeguard the information
of airlines which may come into its possession pursuant to this agreement; it will
ensure that data received from any airline will not be used by it or any subsidiary,
affiliate or other company controlled by it directly or indirectly, for purposes unrelated
to the operation of the System; treat as confidential any such information and ensure
that its officers and employees also treat such information as confidential. The
System Provider will be liable for any loss (including monetary loss) or damage which
an airline may suffer by reason of confidential information being disclosed by the
System Provider to a third party without authority of the airline concerned.
7.
6. LIABILITY
7.1
6.1. the System Provider shall not be liable for any loss, including monetary
loss, injury or damage, which airlines jointly or individually may suffer by reason of
any failure or malfunction of the System or by reason of any incorrect or unauthorised
operation of the System by the Agents, including, but not limited to, loss sustained
directly or indirectly by airlines jointly or individually in consequence of any claim
against airlines jointly or individually by the Agents or by the travelling public or by
any airline or person, except where such loss, injury or damage results directly from
wilful misconduct or negligence of the System Provider or its employees;
7.26.2. the System Provider will take all reasonable measures to prevent
unauthorised or fraudulent use of computer generated document numbers for
issuance of Electronic Tickets and to prevent unauthorised alteration of issued
Electronic Ticket data held by the carrier whose Electronic Ticket has been issued.;
7.3 the System Provider assumes full and sole responsibility for the security of any
Card Holder data obtained by or provided to the System Provider, while such data is
in the System Provider’s possession or control, including but not limited to its secure
handling, storage, transmission, and destruction, and agrees to indemnify, defend,
and hold harmless the Coordinator, IATA, and IATA’s officers and employees, for any
and all third party claims, loss, injury, or damage, resulting or arising from the loss,
misuse, or unauthorised access to, or unauthorised acquisition or disclosure of,
identifiable customer information obtained by or provided to the System Provider,
while such data is in the System Provider’s possession or control, where such loss,
misuse, unauthorised access to, or unathorised acquisition or disclosure of,
identifiable customer information is caused by the System Provider’s failure to comply
with PCI DSS;
7.4 the Coordinator and/or IATA shall provide the System Provider with reasonably
prompt notice of any claim for which indemnification may be sought hereunder. The
System Provider shall be entitled to control the handling of any such claim and to
defend or settle any such claim, in its sole discretion, with counsel of its own
choosing, provided that, in the case of any such settlement, the System Provider
shall obtain written release of all liability of the Coordinator, IATA, and IATA’s officers
Page | 28
and employees, in form and substance reasonably acceptable to IATA; and further
provided that IATA shall have the right, but not the obligation, to participate in the
handling, defense, or settlement of any such claim with counsel of its own choosing,
at IATA's sole cost and expense.
8. 7. FORCE MAJEURE
The System Provider shall not be liable for failure to comply with the terms of this
Agreement or for delay in complying with same if such failure or delay is due to
causes or conditions entirely beyond its control.
9. 8. TERM OF AGREEMENT
This Agreement shall become effective on the day of signature and shall continue in
full force and effect indefinitely thereafter until terminated either pursuant to
Paragraph 4 of this agreement or upon not less than sixty (60) days' prior written
notice from one party to the other party.
10.
9. AMENDMENTS AND GOVERNMENT LAW
This Agreement may be modified only by a further written agreement signed by the
parties hereto. This Agreement and any amendments thereto shall be governed in its
interpretation and performance by the laws of ....(country).
11. 10. ARBITRATION
Any disputes or claim concerning the scope, meaning, construction or effect of this
Agreement or arising therefrom shall be referred to and finally settled by arbitration in
accordance with the Rules of Arbitration of the International Chamber of Commerce
and if necessary, judgement on the award rendered may be entered in any court
having jurisdiction thereof.
12. 11. NOTICES
All notices hereunder shall be in writing and sent by registered mail or recorded
delivery mail, or teletype message as follows:
To IATA:
________________________________________
(name and address of Coordinator)
(including TTY & Fax Numbers)
1.
To the System Provider:
________________________________________
(name and full address)
(including TTY & Fax Numbers)
_________________________________________
Place,
Date
2.
For the System Provider: For IATA, by the Coordinator:
by the Coordinator:
_________________
_______________
(Signature)
(Signature)
_________________
_______________
name, title
name, title
Filing Period
10-18 December 2014
Page | 29
Effective/Implementation Date
01 June 2015
Resolution 866
DEFINITIONS OF TERMS USED IN PASSENGER AGENCY PROGRAMME
RESOLUTIONS
(Amending)
PAC1(5051)866(except USA)
PAC2(5051)866
PAC3(5051)866
Expiry:
Indefinite
Type:
B
Amend Resolution 866 as follows:
BANK GUARANTEE means a guarantee issued by a bank ensuring that the
liabilities of the agent will be met in case of a default; limit sum (BG amount) defined.
STANDBY LETTER OF CREDIT means a letter from a bank where the bank acts as
an insurer and pays IATA in case the Agent defaults (payment of last resort) should
the Agent fail to fulfill a contractual commitment with IATA.
LETTER OF CREDIT means a letter from a bank guaranteeing that the Agent's
payment to IATA will be received on time and for the correct amount. In the event
that the Agent is unable to make payment the bank will be required to cover the full
or remaining amount of the purchase.
INSURANCE BOND means a bond offered by an insurance company ensuring that
the liability of the agent will be met in case of a default - payment of claims to be
made by the insurance company
Limit sum (Bond amount) defined.
SURETY BOND means a bond issued by an entity on behalf of the Agent,
guaranteeing that the Agent will fulfill its obligation to IATA. In the event that the
obligations are not met, IATA will recover its losses via the bond - payment of claims
to be made by the Agent.
DEFAULT INSURANCE PROGRAMME means one insurance policy to cover
multiple declared agents with a maximum coverage for all agents is defined in the
policy.
Filing Period
10-18 December 2014
Page | 30
Effective/Implementation Date
01 June 2015
10 December 2014
MEMORANDUM
To:
All Members of IATA
Passenger Agency Conference Accredited Representatives
From:
Director, FDS Operations
Ref:
PAC/Meet/230
Subject:
THIRTY-SEVENTH PASSENGER AGENCY CONFERENCE (PAConf/37)
Hilton Bayfront Hotel, San Diego, CA, 16 and 17 October 2014
MINUTES
_________________________________________________________________________
Kindly find enclosed the Minutes of the Passenger Agency Conference that took
place at the Hilton Bayfront Hotel, San Diego, CA on 16 and 17 October 2014.
The Expedited Resolutions and Finally Adopted Resolutions adopted at that meeting
were circulated under cover of Memoranda PAC/Reso//597 and PAC/Reso/601 of 30
October 2014 and 10 December 2014 respectively.
Javier Gallego Alonso
Director, FDS Operations
MINUTES
OF THE
THIRTY-SEVENTH PASSENGER AGENCY CONFERENCE
San Diego, California, USA
16 and 17 October 2014
P.O. Box 416
1215 Geneva 15 Airport
Switzerland
MINUTES OF THE THIRTY-SEVENTH PASSENGER AGENCY CONFERENCE
Hilton Bayfront Hotel, San Diego, California
16 and 17 October 2014
M/1
These Minutes bear the references used in the agenda and documentation of the
th
37 Passenger Agency Conference (PAConf/37).
AGENDA ITEMS A1, A2, and A3 – OPENING OF MEETING
M/2
Mr. Christopher Gilbey, Chairman of the Passenger Agency Conference, opened
PAConf/37 at 14.00 hours on Thursday, 17 October 2014 at the Hilton Bayfront Hotel in San
Diego, California. He thought this was a particularly fitting venue for the Conference,
recalling that the first ever Passenger Agency Conference had also been held here some 36
years ago, when a joint meeting of representatives from all Trade Association Conferences
was held.
M/3
In welcoming delegates, he extended a warm welcome to many new delegates
attending Conference for the first time. He introduced with him at the top table Mr. Aleks
Popovich (Agency Administrator and SVP FDS), Mr. Javier Gallego Alonso (Director, FDS
Operations), Mr. Noel Gilmartin (Head, Distribution Management) and Mrs. Livia Vité (Head,
Agency Management). The Chairman also welcomed Mr. Leslie Lugo, IATA Senior Legal
Counsel and Ms. Janet Mekkaoui, Manager Agency Policies.
M/4
The attendance record is enclosed separately.
M/5
The Chairman recalled that the Conference had been convened by Memorandum
PAC/Meet/227 of 16 July 2014.
Further documentation had been issued under
Memorandum PAC/Meet/228 of 15 August 2014 (1st transmittal), Memorandum
PAC/Meet/229 of 16 September 2014 (2nd transmittal), and email of 12 October 2014 (1st
onsite documents). In addition there were a number of other onsite papers being distributed.
M/6
The credentials of representatives present at the meeting had been verified and
found to be in order. Each delegate was thus entitled to vote. The Chairman reminded
members that the confidentiality rules of Resolution 892 applied to Conference deliberations.
M/7
The Chairman explained how he intended to run the meeting. He advised that there
was a large number of items on the agenda and time was tight. In the interests of efficiency
he intended to take some items together as a package. He would also address all the ‘R’
items before dealing with other parts of the agenda. In all instances, where comments had
been made by the Travel Agents, he would draw attention to those comments before
proceeding with the item.
M/8
Following the opening items, the Chairman advised that the formal Conference
agenda would be set aside to allow for a special information session where members would
benefit from detailed presentations on some important topics. He hoped Members would
take advantage of this session to raise questions or clarify matters. Conference would still
be in formal session during this time.
AGENDA ITEM A4 – COMPETITION LAW COMPLIANCE
M/9
Mr. Lugo reminded Conference of its obligations under antitrust laws and provided a
brief statement on competition law.
AGENDA ITEM A5 – APPROVAL OF MINUTES OF PREVIOUS MEETING
M/10 The Minutes of PAConf/36 (Dublin, Ireland, 29 and 30 October 2013) published
under cover of Memorandum PAC/Meet/226 on 27 November 2013 were approved as
written.
INFORMATION SESSION
M/11 At this point, the Conference set aside the formal agenda to receive a series of
presentations, as outlined by the Chairman in his opening remarks.
M/12 By way of introduction, Mr. Popovich advised that, as with any industry activity, IATA
was constantly looking for renewal and the Passenger Agency Programme remained a vital
component for managing agency and industry funds. The common factor with the four
themes that would be presented was the need for renewal and would cover the following:
(1) The first theme was about skill and experience within the industry in relation to the
Agency Programme. Did people have enough skill and understanding of the rules
and how the programme worked? IATA was relaunching internally its Global Skills
Assurance Programme (GSAP), with the aim of ensuring that nobody could touch
industry funds without being professionally trained. The training would cover staff in
the centres, the hubs and the field offices. Mr. Gilmartin would be talking about an
external dimension of this training and taking a professional approach to risk
management beyond the boundaries of IATA.
(2) The second area they would be hearing about was the renewal of the IATA
Settlement Systems, through New Gen ISS (NGI). As Members were aware, there
had been some recent episodes in terms of major defaults - for example with Air Fast
Tickets - but even prior to that IATA had recognised through the NGI project the need
for renewal in terms of a more effective and proactive approach to agency risk
management. This was really at the heart of New Gen ISS, and IATA would be
talking about the actions, in the short, medium and long term, that it would be taking
to be more effective in terms of risk management.
(3) The third area was about making the management of ISS more customer centric.
IATA had set itself objectives for transformation in its customer centricity – the
customers being both the airlines and the agents.
(4) The fourth area was the subject of agility. In the longer run, IATA had a strategy to
make sure that the systems underpinning the IATA Settlement Systems for both
Passenger and Cargo were built for agility, quality, control and effectiveness. In
practice that meant ownership of a front-end system, the BSPlink system, and one
operating system underpinning that front-end system to give IATA leverage with the
data processing centres. That would be good for the future of this programme, rather
than being locked into legacy systems and relationships.
Having set the scene, he then handed over to Mr. Gilmartin for the first presentation.
Secretariat Note: A copy of all presentations will be sent out separately to PAConf members
only.
ACHIEVING BETTER AGENCY RISK MANAGEMENT
M/13 Mr. Gilmartin advised that he would be speaking today about industry skills and
experience to achieve better agency risk management, and a proposed programme of
action. The industry had been through some difficult times lately, especially with the Air Fast
Tickets and Enterprise Travel defaults, resulting in losses in three key markets of over €49
million. Carriers would therefore be keen to know what action IATA was taking to ensure
better agency risk management in terms of providing solutions to this issue, and ask
themselves whether they were doing enough as the Conference and its Steering Group to
focus on this so that they were clear on how they could solve this problem going forward. It
was the responsibility of all of them in terms of the industry to tackle the problem. There had
been a big reaction to the recent defaults from across the industry. Other groups - the
Financial and Legal Committees amongst others – were also looking to get involved in this
area. It was therefore time for them to look at renewal in terms of risk management going
forward and he would be showing them a few facts and statistics illustrating where they were
right now, and where they might need to go to improve risk management and minimise
losses in the future.
M/14 During the presentation, he asked members how they could mobilise the governance
machine in a more systematic way to ensure a joined-up approach to tackling risk
management in key markets. Another dimension was how airline HQ people coordinated
with their local representatives on APJCs worldwide, and even in which APJCs they
participated. Were carriers acting with one voice within the same airline?
M/15
IATA was proposing to help by taking some basic action:
-
There was a need to make sure that everyone here as well as people in the field
actually understood the rules and how the system worked. This was a key point area
and internally IATA was relaunching its GSAP training programme for head office,
regional and field office operational staff to ensure they understood how the
programme worked, what the resolutions provided for particularly in respect of
agency risk management. The training would be validated by taking an examination
on those topics, to make sure that IATA staff handling airlines’ money were
professionally qualified.
-
IATA would be offering similar governance training for airline managers – either at
the airlines’ head office or an IATA regional hub to assist in forming a coordinated
approach within the airline in respect of agency risk management. Airline staff also
had to understand the rules and what the APJCs should be doing in respect of local
financial criteria or remittance frequency to ensure a coordinated approach at all
levels within the airline.
-
IATA was also proposing that there should be the appointment of a Credit Risk
Officer within each airline, someone who had the role of coordinating and defining
what the strategy with regard to ARM should be. The Credit Risk Officer would be
expected to coordinate and establish within each airline’s HO departments use of
IATA management information reports, and drive the implementation of the strategy
agreed within each airline for improvements to LFC/remittance frequency with the
airline’s local APJC representatives worldwide.
M/16 After sharing some statistics on the sporadic nature of airline participation in APJCs
worldwide, Mr. Gilmartin summed up by saying that there was a clear need to improve
agency risk management, by working together and with IATA providing training to its own
staff and to the airlines to ensure everyone understood the governance machine from the
head office down to the local APJCs. They needed to agree a strategy to tackle a prioritised
list of target markets that had the largest losses, and to ensure that the right airlines were on
the right APJCs in order to have the right focus and leverage to effect change.
M/17 A member stated that his carrier would like to participate in more APJCs but it was
not always possible due to a restriction on numbers. The Chairman thought there should be
some form of rotation of members but if this was a concern, the topic could be looked at by
the PSG to see how many APJCs had full participation and for how long some airlines had
been members of those APJCs.
M/18 Another carrier commented that this was a sensitive and important area. Some of
the major problems of coordination stemmed from the IATA side and the way in which IATA
approached the airlines. IATA needed to have a better understanding of the organisation of
the airlines, which varied greatly between carriers and was the reason why IATA got the
wrong representation most of the time. In his view, there was a lot of education needed
within IATA. Of course it was the responsibility of the airline to give IATA a copy of their
organisation chart and work with IATA to ensure matters went to the right person. The
problem was that in most airlines IATA did not have a focal point of contact, and he could
give many examples of where an IATA project had been sent to the wrong place within his
carrier.
M/19 Mr. Gilmartin thanked the member for his very useful comments, and agreed it was
definitely a two-way street. They needed to be open and work together to be clear on who
did what, roles and responsibilities, and the person in the airline responsible for tackling
agency risk management. It was critical to establish the reality of those relationships in
terms of working together in a proper partnership. If members could give feedback on where
IATA was falling short and examples of how it could improve, this would be very welcome
input.
M/20 A carrier voiced the opinion that there were too many APJCs, especially in Europe.
In the Americas region they had managed to group countries together which facilitated
airline attendance and perhaps they could look at doing something similar in other regions.
Another carrier from that region raised the issue of attending 6 different APJCs and thought
they should look into creating one APJC for the entire region.
M/21 Mr. Gallego advised that the idea of merging APJCs in Europe had been discussed
on previous occasions. The first problem was language, which was a big issue in Europe,
mainly for the agent community where having to talk in a different language would
completely destroy the dynamics of the APJC. Second, it was tradition to have APJCs in
almost every country. He personally was completely in favour of multi-country APJCs but if
this were to happen it would have to be the airlines taking the initiative. To date, however,
the reaction from both the airline and agents side had not been positive.
M/22 A delegate felt they should look at the history of the BSP and the terms of reference
of the APJCs when they were first formed. Most of the content of the ToR of the APJCs had
been lost and the airlines had lost interest in participating unless they had an awareness of
the importance of attending and developing the LFC. He felt this was becoming an issue
and suggested that they should look into the following:
-
Selection criteria for members of the APJC and how the local airlines on an APJC
were chosen
-
APJC Terms of Reference
A better understanding of airlines’ organisational structures by IATA
A better understanding of IATA’s organisation by the airlines
M/23 In his view, the APJCs should be restructured and he suggested that perhaps a Task
Force could be formed to look at this issue.
M/24 The Chairman advised that at a meeting held the previous day, the travel agents had
also commented about the way the APJCs operated. He therefore suggested that it would
be timely to put this topic on the agenda of the next meeting of the Steering Group and
Conference agreed with this action.
Action:
PSG
M/25 A member reported that his home market would move to weekly remittance in 2015.
However an online travel agent (OTA) could start issuing tickets in another country where
the remittance frequency was not so frequent. Although he had heard calls for a unified front
in tackling risk management, in his view this was best left to IATA because not all carriers
had a presence in every country in the way that IATA had. IATA would know when an agent
was present in several countries and things were happening in other countries that the
airlines would not necessarily see fast enough. He therefore did not think that an individual
person in each airline would make much difference and it would be easier to leave it to IATA
as it had the global perspective.
M/26 The Chairman thanked members for their comments and advised that this would be a
topic for the next PSG.
NEW GENERATION ISS
M/27 Mrs. Vité gave the next presentation on New Generation ISS, explaining that the
vision was to create a customer centric organisation and a faster environment within an agile
governance framework that would deliver accreditation and risk management solutions in a
safer and more relevant way for the industry. New Gen ISS would introduce a new agency
programme and today she wanted to share with PAConf the framework for that, primarily
focusing on accreditation and new agency risk management.
Accreditation and Agency Risk Management
M/28 Today, there was a one-size-fits-all approach to accreditation. All agents were
accredited in the same way and all had the ability to issue an unlimited number of tickets.
This was not conducive to all business models. In the future, risk management would be
tied to the risk profile of an agent, and that would determine the agent’s credit conditions.
This would provide the ability through dynamic credit management to mitigate risk exposure.
Agents would be able to choose which model was relevant to their business needs.
M/29 New Gen ISS would also be looking at alternative methods of payment in relation to
payments of tickets. Today it was either cash or credit card. The intention was also to look
at methods for prepayment, full and partial as well as pay-as-you-go.
M/30 The last stream, BSP enhancements, would focus in 2015 on looking at the concept
of a super BSP, mainly for multi-country agents, to provide for the possibility to pay all their
billings at once through one BSP, in the currency of their choosing.
M/31 Moving to the key focus, enhanced accreditation and agency risk management, there
was a very strong case for change. The current programme had been in place for about 40
years and had not changed very much, although the industry and business in general had.
Industry evolution had seen a move from a paper environment to an e-ticketing environment;
with increasing globabilization and moving across borders. Meanwhile, the rules had not
adapted. The evolution of e-commerce, in particular, was one of the reasons that had
exacerbated IATA’s concern in terms of major defaults. There was a need to make sure the
rules were flexible and that IATA was able to whatever was necessary to protect the airlines’
monies.
M/32 Mrs. Vité then took PAConf through the new accreditation models and key
dimensions of agent choice and risk management. The new model would provide for three
tiers of agents, the first tier for agents with no cash facility (Accreditation ‘Lite’), the second
tier for agenda with standard accreditation with cash facility; and the third tier for multicountry accreditation. The roadmap to going live in 2017 would be the result of resolution
submission to a Special PAConf in March 2016.
M/33 The Chairman thanked Mrs. Vité for the presentation and stated that this was a major
change. He called for any questions or comments.
M/34 In respect of the way the credit management would operate, a member noted that
after five days if an agent reached the credit limit, he could be restricted to a different form of
payment. Had discussion begun yet with the GDSs on this capability and what was the
transition plan in countries where there were smaller GDSs?
M/35 Mrs. Vité advised that one of the key dependencies in restricting methods of payment
was GDS capability and IATA would need to be very careful that all GDSs had this ability
before any implementation, for competition reasons. IATA had already started discussions
with the GDSs, who were looking into it but so far there did not seem to be any
showstoppers.
M/36 Another member asked whether, in light of the AFT default, there was any
opportunity in the new programme to introduce an individual credit limit or weekly remittance
for new agents? In terms of credit limit management, Mrs. Vité explained that that was
something IATA was trying to implement right now, but it would only be done on a manual
basis. As would be seen by another item on the agenda, IATA was planning to monitor
sales on a daily basis and providing reports to the airlines of all agents that had substantially
increased sales, together with the percentage of the financial security utilised. These reports
were currently available in Europe BSPs countries today through BSPlink.
M/37 A carrier asked whether this would recognise any symptoms common to the recent
cases and catch those, or simply restructure risk management?
M/38 Mrs. Vité asked whether this question related to certain behaviour in terms of OTAs?
What she was presenting here was related to credit limit management. The new system
would mitigate much of the risk in cases like AFT because there would be a certain credit
limit established beyond which the agent would not be able to issue tickets on a cash basis.
M/39 The Chairman added that the Steering Group had recently established a Task Force
specifically to look at OTAs and it was very possible that some of the rules might need to be
changed in respect of how they operated.
M/40 A delegate asked how the scheme in Mexico would work, and what type of control
there would be if agents were forced to credit card only sales. Mrs. Vité explained that in
terms of the Mexico Agency Solution (MAS) it was correct that this was very much a version
of ‘accreditation light’. In terms of control, and anything that changed the obligations of the
GDSs, there were specific provisions that the GDSs had to comply with under Resolution
854 and it was there that changes would be needed to avoid having to enter into a separate
agreement with agents.
M/41 Recognising that the new accreditation model would involve an enormous amount of
work and the revised programme would mean many major changes, the Chairman asked
whether any carrier had difficulty with the concepts presented so far. No carrier raised
concerns in this respect. The Chairman accepted that there was still a lot of work to be
done, and advised that any issues raised during discussions here would be fully examined.
Alternative Methods of Payment
M/42 Ms. Andrea Simoes took over the presentation at this point to explain the features of
IATA EasyPay and how the process would work. This new method of payment was already
being piloted in Spain and South Korea, as endorsed by the PSG/ISSWG Task Force and
additional pilots were envisaged later on.
M/43 A member asked whether the EasyPay facility would be considered as a credit or
debit card payment, and how it would work in respect of Resolution 890, particularly section
1.4. Mr. Gallego explained that this was not a credit card payment. It was a new form of
payment and would be completely outside r890.
M/44 Besides the fact that this form of payment would be cheaper, another carrier could
not understand the point of the scheme, because the principle was the same that the agents
would have to have cash in the bank in order to pay.
M/45 Mr. Gallego advised that from an airline point of view, the main advantage was that it
would be cheaper because there was no merchant bank in the middle and it would simplify
the current process. From the agents’ perspective, it would be like a cash payment but
payment would not wait until remittance day, it would be immediate. It was a purely
voluntary option. In 30-40% of countries worldwide today, there was a requirement for
mandatory bank guarantees. In one of the two countries where this initiative was being
piloted, it was the travel agency market that had requested implementation of the scheme,
because it was an opportunity for agents rich in cash to reduce the level of their BGs.
Although he did not expect it would appeal to all agents, it was a good alternative to offer,
especially when introducing risk control or credit limits, because it would enable an agent to
continue doing business if cash transactions were switched off because the agent had
reached the maximum level of its credit. Having this option meant IATA could be more
flexible in terms of competition in allowing the agent to continue to do business by prepaying,
and it was important for the new environment to be compliant with competition laws. It also
allowed the implementation of the ‘lighter’ accreditation model which would give agents the
option of paying for those transactions directly.
M/46 Responding to another question, Ms. Simoes confirmed that IATA would be aligning
all the road maps in terms of timing for this project and the previous presentation on
accreditation and agency risk management.
M/47
The Chairman thanked Ms. Simoes for the presentation.
ISIS2 MIGRATION
M/48 Mr. Gallego started his presentation by saying that the previous presentations had
been about the strategy in terms of reforming the agency programme. This presentation
would be about how better to manage the back office operations, mainly focusing on the
DPC side. ISIS2 was an IATA-owned reporting and billing processing software required to
operate the BSPs. The first ISIS software was developed some 15-20 years ago and was a
very old platform. At this stage, the project was called ISIS2 but the name would be
changed to avoid any confusion. It would provide completely new technology that would
improve system security and user access, automating processes and generating
standardised output reports. ISIS2 was a huge project. The biggest impact would be on
IATA’s side, but he wanted to ensure that the airlines were 100% aligned in terms of the
level of outputs.
M/49 The Chairman thanked Mr. Gallego for the presentation. It was another area
involving big change and he asked members to raise any questions they wished about the
project.
M/50 A member asked whether this would have any effect on the BSPlink product, as in
his view the BSPlink product should be developed alongside the ISIS2 product.
M/51 Whilst agreeing on the need to redevelop BSPlink also, Mr. Gallego stated that it was
a question of priorities. It was not possible to deliver a project like ISIS2 that required 5
years and a huge investment and at the same time redevelop BSPlink. In the short term,
IATA was starting to work on delivering agency risk management information to the airlines
that could be integrated into their systems, through BSPlink. In the future IATA would like to
have a very good agency risk management tool in BSPlink and in the short term was taking
little steps, but the BSPlink product itself would not be renewed at least until 2016/17.
M/52 The member found that very disappointing. Going back to the AFT situation, had the
carriers been able to use the BSPlink product in the same way that IATA did, they might
have been able as individual airlines to have made more immediate decisions in terms of
how to deal with those agencies, recognising that the airlines themselves should also be
taking responsibility for better risk management.
M/53 Mr. Gallego clarified that IATA would be providing the tools and data to the airlines to
do that from January 2015, but it was not possible to rebuild everything in BSPlink now.
IATA would provide on a weekly basis a report that could be managed by every single airline
in the world, giving details of the BG coverage, sales discrepancies etc. It would not be
possible to integrate this in BSPlink because that would require more time to develop.
M/54 The Chairman advised that they would talk later in more detail about the
Management Information Reports as a separate item on the agenda. Meanwhile he thanked
Mr. Gallego for the presentation and asked that it be attached to the minutes as there was a
lot of information to take in.
CUSTOMER SATISFACTION
M/55 The last item for the Information Session concerned Customer Satisfaction, where
Mr. Gallego wished to share the results of the latest survey and the action plan over the next
three years.
M/56 As background, he reminded members that 2013 had been the year of migrating
operations to the regional hubs and 2014 had been the year for stabilising those activities.
As IATA changed to a more customer centric organisation in the way it provided customer
services to the airlines and the agents, it was the right moment to move from the pure CS
survey concept to a numeric method to assess the level of satisfaction on a scale of 1 to 10
and from next April would be introducing two new indicators to measure satisfaction levels –
the Net Promoter Score (NPS) and Customer Effort Score (CES). IATA would use the new
scale, which was used by all the multinational companies, to measure CS going forward.
The feedback received would be translated in to action plans to improve service delivery in
the future.
M/57 He then shared the results of the most recent survey, comparing the 2013 results
with 2014, and the overall satisfaction scores by region and customer type. Some key points
highlighted were a decrease (5%) in terms of the overall IATA image; 3 out of 4 customers
considered the services provided by IATA had improved over the previous year; but IATA
was not an easy company to do business with. In 2014, the year of stabilisation, ratings had
increased by 1%, which was good but still not good enough. Of the regional scores, there
had been a remarkable improvement in the results for the MENA region. The response rate
overall had also improved by 1%.
M/58 More than 50% of customers (airlines and agents) were unhappy with communication
but IATA provided customer services in more than 30 languages from the five regional hubs.
Many factors needed to be considered – language, content, tools, etc. Also, more than 65%
of people contacted IATA more than twice before getting a solution to a query. Ideally, this
should be more like 10%. 92% of customers also expected a response within 2 days and
the statistics showed that over 90% of cases were closed within one day.
M/59 IATA’s plan was to reach an 85% satisfaction level over the next 3 years, and to
cover all the areas of improvement mentioned here. The purpose of this presentation today
had been to share the latest results with PAConf, to stress that this was a key area for IATA,
and to show that there was a concrete plan that would be delivered by the IATA teams to
achieve the expected level of customer satisfaction.
M/60
The Chairman thanked Mr. Gallego for a very comprehensive presentation.
AGENDA ITEM A6 – REPORT FROM SENIOR VICE PRESIDENT, FDS
M/61 Having concluded the information session, the Chairman advised that he now
planned to ask Mr. Popovich to give his SVP Report and to cover in particular any issues
relating to the recent default cases, particularly AFT. He would deal with items R33 and
R47, which were the proposed solutions in the short and long term to avoid a similar AFT
situation in the future and how IATA could help the airlines and the airlines themselves could
help IATA. The reason why he was taking time to introduce this item was to make sure that
if there were any issues relating to the AFT situation and the way it had been handled, these
were brought out into the open.
M/62 Mr. Popovich asked PAConf to consider this verbal update as his SVP report. Since
the last meeting of the IATA Board of Governors in June, he had been spending most of his
time on the AFT episode. This was a key issue for the programme going forward and he
wanted to share with them highlights of the report he had made to the Board earlier in the
year. Every June he gave the Board a report on managing industry funds and the key
messages at that time in terms of managing the BSP was that on-time settlement
performance was relatively strong at 99.98% and IATA was then exceeding the targets set
by the Board.
M/63 Another target was for ‘safe funds’, or minimising unrecovered debt. The BSPs and
CASS in a year typically settled nearly $300 billion of airline funds. There had been $145
million of unrecovered debt from the travel agency community in the previous year. When
the Board’s attention had been drawn to that number, IATA had been tasked with focusing
on this matter and a Board target had been set of achieving an unrecovered debt goal of
0.025%, or cutting in half or more the current $145m unrecovered debt figure.
M/64 His response to the Board was that if they wanted a strategy to tackle unrecovered
debt, then they needed to look at which markets were driving unrecovered debt the most, on
the 80/20% rule, and he had showed them a league table of the BSP markets that over the
last 5 years had generated the most unrecovered debt. Interestingly, a number of these
were in Europe (Spain, France, UK, Greece), and some in Africa as well as India and Brazil.
M/65 His challenge to the Board was frankly one of education. On the one hand the Board
appointed the delegates around the table here to the Passenger Agency Conference to be
accountable on behalf of the airline to act for the industry. What had struck him was the
amount of education he had had to do with the CEOs. There may have been a time when
the CEOs were highly educated about the programme, but now there was a big disconnect
about the governance and this was prior to AFT issue.
M/66 The other message he had given to the Board was that to tackle unrecovered debt,
the airlines would need to have a joined up approach within their own companies in respect
of agency risk management, because in many airlines there were conflicts between the
commercial side wanting to make as many sales as possible, and the financial side where it
recognised the need to generate revenues but also to manage risk. The BoG agreed with
the need for a unified approach within the airlines. IATA was responsible for managing risk
on the airlines’ behalf under the rules set at conference. IATA needed to be clear who was
the focal point within each airline to talk to about risk management. His first point therefore,
was who was the right person in the airline that IATA should engage with in respect of risk
management? Who was the network accountable person in each airline – was it the PAConf
member? This was something that needed to be clear in the eyes of the CEO.
M/67 His second point was, if they were seriously going to tackle the issue of unrecovered
debt, then they were on a tough journey because they had to think about their travel agent
partners in finding the right balance and approach. There was a very important consultation
process that to go through in consulting with the travel agents before arriving at any
decisions here.
M/68 One other message he had put across was that tackling unrecovered debt would
require the leadership of the airline community and obviously in those key markets IATA
would support the carriers but things would only happen with leadership from the airlines in
those markets.
M/69 That summed up his message to the Board in June. Then the AFT episode had
occurred, and the education within the airlines had rocketed. What had struck him then, was
that there was a big job to do to educate the airline community about the importance of the
conference system and how risk management was done. The CEOs, CFOs, Legal
Committee, Financial Committee were now all highly engaged in this issue since the AFT
episode and it was an important topic for the future of the Agency Conference.
M/70 The other thing he would like to add and which he would go into in more detail later –
was, what had IATA done since AFT? With the advice of the Steering Group, a number of
actions had been taken. One was to grant the Agency Administrator interim powers to act
should a similar episode occur, powers which he had not had previously which would have
allowed him to intervene in the AFT case.
M/71 Secondly, in close consultation with IATA Legal, IATA would be giving more
management information to the airlines in the form of weekly reports made available through
the BSP. The prime customer for these reports was IATA because it was IATA’s job to
manage members’ funds on their behalf, but it had become clear that IATA needed to share
these management information reports with the airlines on a regular basis, so that each
airline could make its own judgement on whether or not to take any action.
M/72 These reports were implemented within a matter of weeks for Europe region and the
intention was to provide them worldwide as from January 2015. He wanted to stress that it
was not about relying on programmes of action in 3-5 years’ time, this was about the action
that IATA was taking now.
M/73 That concluded his report as he had wanted to focus his comments on this particular
episode and see what they could do together to improve matters.
M/74 The Chairman wanted to flush out any questions or comments before getting into the
detailed proposals under items R33 and R47.
M/75 A member thought that the reports and different tools that they would now have
access to would definitely help in future situations like this but unfortunately the reaction was
after the fact. She thought they should think about other things if something were to happen
and did not think that that was necessarily the airlines’ responsibility but IATA’s, who had
that information. The CEOs could certainly be trained and briefed but they were dealing with
other things and it was unfair to suggest that the CEOs should be made to feel responsible
for this in any way. That was why she and her colleagues were here at Conference to
represent their airlines. At the end of the day, the data was handled by IATA. The idea of
the reports and everything was good but they needed to have a more proactive and not
reactive attitude in the future.
M/76 Mr. Popovich fully agreed with the member. He reiterated that the prime user for the
management information reports was IATA in terms of executing its responsibility for risk
management on the airlines’ behalf but it was also important for the airlines to see the
reports. IATA was ramping up its proactive approach to risk management, and the
management information reports was but the first step. He would value feedback as to what
else IATA could do on behalf of the members.
M/77 Another member thought that seeking to appoint a risk champion within each airline
as IATA’s main point of contact was not necessarily the way to go. As a smaller carrier, his
airline would not necessarily know if anything was happening to an agent in a country where
they did not have a presence. Whereas IATA was present in every market and therefore
should be taking the lead and then presenting that information to the carriers.
M/78 Mr. Popovich repeated that risk management was the responsibility of IATA in this
regard. He could not stress this strongly enough. He thought there would be value in
building a community of risk managers where within clear legal boundaries they could share
information together and IATA would be better for that. This was about IATA’s leadership
role in terms of risk management, using a network of risk managers from each airline.
M/79 Mr. Gilmartin agreed it was IATA’s role to lead and take responsibility for risk
management, and operationally that was what the airlines had tasked IATA to do. That was
totally recognised and accepted. In the case of AFT as a key example of what happened
operationally, there had been strong feedback from the airlines that IATA did not
communicate effectively enough about situations that were arising operationally. So while
on the one hand it was IATA’s responsibility to keep the airlines’ money safe and take the
appropriate action, at the same time the airlines also wanted to have real management
information as well because the airlines had the ability to intervene themselves in terms of
removing an agent’s ticketing authority. There might be situations where an individual airline
would want to take its own action in advance of any action IATA might be contemplating. In
any event, it was certainly the case that where IATA saw a situation like this building in the
future, its intention was to intervene and not allow such a case to happen again.
M/80 Whilst not against the idea of a risk champion a carrier felt they should recognise this
was not going to be an IATA employee. The carriers had different rules and structures and
not every carrier would be able to afford this kind of position, some larger carriers may be in
a position to do so, but smaller carriers would not necessarily. Thinking that this particular
role was going to solve the situation in the future was probably misleading. On a second
point, he heard very clearly that risk management and risk assessment rested with IATA but
the communication process had to be improved and that was also with IATA. He wanted to
see risk management put together with communication. Thirdly, in an age of eCommerce
where OTAs could rapidly grow and exponentially increase their turnover, this was where
there was a lot of risk and something that should also be looked at. Finally, going back to
the point raised about the APJCs, relying on the local team was simply not enough from the
carriers’ perspective. He thought IATA needed to show leadership in the local markets in
order to provide the necessary information.
M/81 A member was quite shocked at what he was hearing. This was biggest default in
IATA’s history. Irrespective of whether it was IATA or the airlines, there was very leaky hole
in their defense as a result of that default. There were a number of things involved in the
way that the trade was going on, especially with online agencies. The switch-ticketing
concept which was beginning to affect the industry was quite a change where the agent shut
down and switched ticketing to another operation. Something they should all cognisant of
because it affected both the airlines and IATA.
M/82 Picking up on comments made earlier regarding BSPlink, the member advised that
his airline used BSPlink to examine everything but the system did not give them the data
they needed to be able to see what IATA was seeing. He did see an element of blame being
directed at the airlines and it was easy to say that everyone should be perfect at risk
management but it did not work like that. For example, a major carrier in the UK from China
might not understand the way that particular market worked as well as others. BSPlink was
an excellent product if the airlines could have access to the data that IATA was seeing so
that they could make those judgements as well.
M/83 The BSPlink system in the UK and a number of other markets was not a very good
product. His airline had examined both aspects of the product, but could not use it in the
way they wanted as it was simply not good enough. To the extent that they did not want an
AFT to happen again, his carrier was very disappointed. Even today they were receiving
communication that AFT was still operating and it was difficult to reconcile with that. Whilst it
was true that the airlines’ had some responsibility, and should be more on the ball, they were
not perfect and to be more effective they needed IATA’s help and better systems to do risk
management so that this type of situation did not happen again.
M/84 Another member thought that the new reports focusing on sales would be a good
indicator of potential risk, but only one indictor. He thought they should make best use of
local information of any kind that could also be a good indicator for default cases, be it a
change of ownership or other things that could be pre-warning indicators beyond the
financials and the assessments and the risk occurring. The local organisation of the airlines
and IATA were key to a pre-warning system beyond just the financial figures.
M/85 Responding to the issues raised, Mr. Popovich noted that the new management
information reports may not be sufficient and they should look at working together in a
collaborative manner to develop their risk management approach to see what else IATA
should produce. He took note of the comments about BSPlink and wanted to understand
the information that the carriers felt they were lacking and what more they would like to see,
through whatever channel. This was something that they should pick up together. The
management information reports were already available through the BSPs in Europe and he
would value feedback from carriers on the content, format and aggregation of the data.
M/86 The Chairman suggested that the best way of doing this, was for the carriers to
consider what they would like to see in the reports and send their suggestions in to IATA by
31 December. The input would then be reviewed by the Steering Group. A member added
that it was not only the reports, it was also module amendments. The Chairman therefore
advised that the scope would extend to cover all aspects, from BSPlink through to the
reports.
M/87 If they were putting all the topics on the table and looking at the way forward, another
carrier returned to the proposal for the appointment of a credit risk manager within each of
the airlines. It seemed to him a little inefficient to devolve that role to each of the carriers as
the airlines had very different organisations and means, and asked whether this was not
something that IATA should be carrying, a BSP Manager or local BSP person responsible
for looking at risk for the local market?
M/88 Mr. Popovich agreed that it was the role of the field office to be the eyes and ears for
risk management in the local markets. IATA was taking the lead on this issue and that
included the field office responsibility. For example, the hubs shared the management
information reports with the country managers and it was their responsibility to talk about the
risk to the airlines. In addition to this lead role, he had heard from a number of airlines that it
was also important that they receive for themselves the same risk management information.
The airlines also wanted to see additional modules and more functionality. In respect of
BSPlink, he thought it would be good to go deeply into the issue with a number of airlines to
get some depth and understanding in terms of requirements. He would therefore be setting
up a meeting with the carrier raising the issue, as well as others, in the near future to discuss
the issue.
M/89 A member noted that the existing reports for Europe were produced weekly but
thought that there might be a need to produce the reports more frequently, especially for
BSPs on weekly settlement. He also asked whether the parameters of the reports could be
varied for those BSPs with smaller volumes, which would make the information more
meaningful.
M/90 Mr. Gallego thought these were very valid comments but suggested that all input was
collected in an organised way, as suggested earlier by the Chairman.
M/91 Mr. Lugo reminded Conference that it was essential that any suggestions received
were evaluated by IATA Legal under competition law because this was a conference
comprised of competitors and there were certain decisions that each competitor could only
make in its own individual capacity.
M/92 The Chairman thanked Mr. Lugo for the reminder and asked carriers to submit their
input to IATA by the end of December.
M/93 A carrier commented that Regional Hubs could never be the eyes and ears in the
local markets for the whole world. In his view, one of the reasons things did not go right was
because there was no Country Manager actually located in the country for which they were
responsible. How could they then effectively be the eyes and ears in the local market?
M/94 The Chairman thanked members for their comments and then took items R33 and
R47 which addressed action IATA was taking to strengthen its risk management activity.
AGENDA ITEM A7 – COMMENTS ON THE PAConf AGENDA
M/95 The Chairman advised that he would inform members of any comments made by the
Travel Agent community through the PAPGJC when addressing the individual agenda items.
He then turned to the ‘R’ items on the agenda.
AGENDA ITEM R1 – EDITORIAL CHANGES TO PASSENGER AGENCY RESOLUTIONS
M/96 The Chairman took items R1.1 and R1.2 as a package as these both contained only
editorial changes. Conference unanimously adopted the resolution amendments shown in
Attachments ‘A’ to the papers.
M/97
It was recorded that at this point the QF delegate left the room.
AGENDA ITEM R2 – BONA FIDE BANK ERROR
M/98 The Chairman believed this was another editorial amendment to update resolution
818g to reflect that irregularities will be withdrawn upon receipt of the bank letter received in
original hard copy, or fax copy, or scanned copy sent by email.
M/99 A Member suggested that the wording be amended to state that the Agent should
request the bank to send a copy of the letter by email directly to IATA with a copy to the
agent. Mr. Gallego advised that the banks would not agree to do this due to their own
internal policies. This was a huge problem for the agents when no monies were at risk. This
proposal was an attempt to clarify a way to manage the process, to enable IATA operations
to act faster in removing irregularities and as a result having less impact on an agent’s
business.
M/100 The Chairman took a vote on the original wording in the agenda paper and the
proposed resolution amendment shown at Attachment ‘A’ to the paper was unanimously
adopted.
AGENDA ITEM R3 – FINANCIAL REVIEW FOLLOWING REINSTATEMENT AFTER
DEFAULT
M/101 Mrs. Vité spoke to the paper, explaining that currently the timing of the financial
review of an agent following reinstatement after default was open-ended. This was causing
confusion for both Agents and IATA operational staff. This item therefore proposed changes
to Resolution 818g to clarify that such review would not be earlier than six months after the
date of reinstatement.
M/102 Conference unanimously adopted the changes to resolution set out at Attachment ‘A’
of the paper.
AGENDA ITEM R4 – REMOVAL OF PHYSICAL INSPECTIONS
M/103 Mrs. Vité advised that this proposal concerned the removal of mandatory physical
inspections for new agents, explaining that the key risks and legal requirements for new
agents were addressed by the receipt and review of the documents listed in the paper.
Considering the high costs involved in performing these physical inspections, and the fact
that the inspections did not achieve any mitigation of risk, Conference was asked to adopt
resolution changes to discontinue the mandatory requirement for physical inspections.
M/104 The Chairman advised that the Travel Agents were in support of this proposal.
M/105 On a formal vote, Conference unanimously adopted the resolution changes shown at
Attachment ‘A’ of the paper.
AGENDA ITEM R5 – AGENT DIRECT PAYMENTS TO AIRLINES
M/106 This item was taken on the second day of conference. Mr. Gilmartin explained the
proposal was to remove clause 1.1.1.c from Resolution 818g, Attachment ‘A’ to eliminate the
right of airlines to demand direct payments due to the BSP. This was another very important
proposal in terms of its potential effect on the ability of airlines to acquire monies from
agents. This provision had been in place for a long time but current circumstances, as
discussed earlier and especially in terms of the AFT default, had highlighted some issues
with regard to the operation of the programme in exactly these circumstances. The concern
was about the principles under which the BSP operated, the fairness aspect and equitability
of the monies processed through the BSP, which should be the same for all participants in
that BSP irrespective of the size of the carrier in a particular market. The BSP protected that
fairness so that when there was a default and any shortfall in monies available from the
agent in terms of their financial security, then there was a clear process for prorating those
monies on a basis which was fair to all participants owed monies from that BSP.
M/107 However if this clause was invoked, which had been case with AFT, then some
airlines were jumping the gun when they saw that an agent was in difficulty and possibly
going into default, and demanding payment directly from the agent. IATA had seen three
cases in relation to AFT where monies had been extracted from the agent in advance of the
default. The principle of fairness was brought into question here as to whether that was a
desirable arrangement under the BSP rules. Was it desirable that airlines had the right to do
that or should they be bound by the rules of the club, so to speak, in that IATA should be the
one to manage the sharing out of monies under the bank guarantee in the event of default.
IATA was proposing that this clause should be removed from 818g in support of the principle
of fairness.
M/108 A member wished to say a few words about the French market. The previous day,
there had been a lot of discussion about risk management and a joining of hands by IATA
and the airlines to build an efficient network and methodology in order to avoid future
defaults. The Indian, French and Spanish markets had been singled out at least three times
as a tail light regarding BSP remittance frequency and local financial criteria. He would like
to provide some background to the French market situation. In 2010, the market had
introduced revised LFC with a new liquidity ratio. They had also introduced weekly and
semi-monthly remittance for agents on a voluntary basis or after default.
This
implementation was planned over 4 years from 2010 and 2014 and was the result of
negotiation between IATA, his carrier, other airlines, and the travel agency union. In his
opinion, that timescale had been too long. In early 2013, given the bad results in the French
market, his airline and IATA had decided to bring the issue to the APJC. After strong
discussion between IATA, himself and the travel agency union chairman, they had decided
to launch a new working group, but on one condition, that IATA would perform an analysis
based on the 2012 travel agents’ balance sheets applying the new relevant criteria in order
to have an idea of the impact that would have on the market. This analysis was ready one
year later, meaning at the beginning of 2014 summer. The working group had now been in
place since the beginning of September and aiming to come up with a solution to present to
Conference in December. As they were all aware, the French market was still in a bad
shape. If the member agreed on the amendment proposed here, it would ruin any chance of
taking legal action. There was a legal process in France which allowed the carriers to refer a
case to a judge if they had any suspicions about an agent but this had to be done within 70
hours of any liquidation of the agency. This process was also a way to put pressure on the
agencies and helped the market. If he was not mistaken, IATA had to wait until the
settlement date to act, which was often too late. The member apologised to Conference as
he was unable for legal reasons to provide any further comments but on the advice of his
Legal Counsel, it was impossible for his carrier to vote in favour of the R5 proposition.
M/109 Another member thought that R5 looked good on paper if there was a level playing
field. However, again taking into consideration the discussions the previous day, if for
example his carrier was able to ascertain that an agent in the local market was in trouble and
informed IATA, what would be IATA’s position? Would IATA act in the name of all the
carriers in that market? What would happen if some of the other carriers did not feel the
same way about that particular agent? If the airline itself acted upon the information, then it
was their responsibility.
M/110 The Chairman felt this was a valid point. He hoped that when IATA received
information from a carrier that an agent was in difficulties, providing it could be substantiated,
then IATA would take action immediately to get the money from the agent.
M/111 Mr. Gallego confirmed that was the action IATA would take. He agreed that the major
risk with the existing wording in the resolution was that an airline could take advantage of the
situation but at the end of the day the overall debt between that particular agent was with the
overall airline community. That was the major concern and why IATA was raising the issue.
The intention of this paper was that all the money collected belonged to the entire airline
community, not only to one airline.
M/112 The previous member did not think his issue had been properly addressed. In a
scenario where his airline was the major carrier in a market and had concerns about an
agent, which was a gut feeling and not necessarily something that could be substantiated, if
he passed that information on to IATA, IATA probably would not be able to act simply based
on hearsay. But for the carrier, who had the most to lose in this market, would probably act
upon the hearsay. He was not saying this was correct either way, merely raising the issue.
M/113 Another carrier felt this clause should remain in the resolution. He was more
concerned about the collection procedures that IATA followed and that there was no further
development of R13 in respect of Online Agents. He believed that IATA needed more
assertive collection procedures and better collection of the debts before his carrier would
consider implementing R5 at this point.
M/114 A member thought that the clause should be deleted. It stated that a Member ‘may’
demand immediate settlement. That did not mean that the carrier would get the money, in
the same way that IATA had the same right to demand payment if members’ money were
prejudiced. In that case IATA could do exactly the same on behalf of all members in a BSP
and that was more meaningful than doing something on an individual basis where
individually an airline could ask for immediate payment but might not get it. However if IATA
demanded payment, it could result in a default situation and that action would make sense.
M/115 Turning to a pervious comment, Mr. Gilmartin advised that if any carrier had
intelligence about an agent in a market, notwithstanding the role of the Country Managers as
discussed earlier being the eyes and ears in the local markets, the airlines locally had their
own sales teams and resources, and ways of knowing what the position was with any
particular agent. It was vital that that information was shared with IATA so that IATA could
take action in the way highlighted by the previous speaker under the Prejudiced Collection of
Funds provision. That was the provision that they were strengthening in order for IATA to
make an intervention if there were any concerns about an agent. He was well aware that the
airlines would be watching IATA in light of the AFT disaster. IATA would make interventions
as required but did need to be able to substantiate any action it took. He respectfully
suggested that carriers should also be very careful in terms of taking precipitative action on
payment from an agent and should take into account the legal implications of putting an
agent effectively out of business, as such action may ultimately end up in court with IATA or
the carrier having to defend their position. They should therefore be responsible about how
they operated but at the same time they needed to be effective, so it was a careful balancing
act.
M/116 The Chairman took a formal vote on the item, which revealed four negative positions.
He asked how he could help the opposing carriers.
M/117 One carrier reiterated their concern about the collection process. It had not been
possible to implement the default recovery service operated in the UK until the total
resolution procedures had been exhausted. For him, this agent was a unique situation.
Even today AFT was still testing the system. Although the work IATA had done in trying to
get the funds from AFT had been admirable, it was not assertive enough in pursuing those
types of agencies and trying to recover funds due to the members. This was why he was
concerned about the withdrawal of R13, although he understood that PSG had set up a
working group to look at this in more detail. If he could see better procedures for tracking
those agents who were really going for the system, and if there was a better collection
process or legal follow up or even a suggestion of IATA collecting on behalf of the airlines
legally, he would be willing to look at that situation.
M/118 Mr. Gilmartin thought they all agreed with what needed to be done, the question was
how to do it. It was clearly IATA’s role to manage risk and collect the money on the airlines’
behalf. He suggested that they should make sure that the resolutions delivered what the
members required rather than relying on the sort of provision in this paper which basically
left the door open for anyone to take whatever action they deemed necessary. IATA should
be the one taking that action and it should be clear on what grounds IATA should act.
M/119 The Chairman advised that this item would be put on the PSG agenda again in March
and he hoped that would help the carrier.
M/120 Another member advised their opposition to the proposal was because there could be
circumstances when an airline may be required to collect funds where it saw that there was
a need and funds were at risk. Whilst agreeing in principle with IATA’s comments on
fairness of the system, the carrier put forward a proposal to amend the current resolution text
with additional wording as an alternative for Conference consideration.
M/121 The Chairman asked the member to provide the wording to the Secretary so it could
be printed up. He then asked another negative carrier if he was a firm negative, or whether
the carrier might consider abstaining if it was applicable worldwide except for France. The
carrier advised that he would give further consideration but asked if it would be possible to
have a deferred vote for 15 days in order to consult internally within his airline to see if they
could abstain on the proposal.
M/122 The Chairman advised a deferred vote would be a decision for Conference. There
was still one other carrier opposed to the proposal. He asked that carrier to print out the
amendment they had proposed earlier and to discuss it with him during the break.
M/123 Later in the meeting, the Chairman returned to this item, reminding members that at
the last vote he had had 3 negative positions. He believed one carrier would be willing to
abstain and another was considering an exception for France. Before he went any further,
he asked for a show of hands from those carriers who supported the proposal as originally
presented. At least 10-15 carriers indicated their support and on this basis, he believed it
was worth pursuing.
M/124 A member then drew attention to their counterproposal and showed on screen the
new wording they proposed to add to the existing provision, reading as follows:
1.1.1(c) in circumstances where a BSP Airline determines that its ability to collect
monies for STDs may be prejudiced by the Agent’s financial position such BSP
Airline may demand immediate settlement of all such monies and advise IATA prior
to such action being taken. In the event the agent fails to settle its total BSP dues to
IATA for the same reporting period, the BSP airline would be required to pay the
monies collected from the agent to IATA immediately, failing which IATA would
deduct the amount from the next settlement due to each BSP airline.’
The member felt that this amendment would address their own concerns, give all carriers an
opportunity to collect funds and by having to advise IATA of such action, also address that
concern.
M/125 The Chairman took a vote on the counterproposal, which would be applicable
worldwide except for France, on the understanding that PSG would review the collection
process at its next meeting. A carrier indicated he would be opposed because if there was
an exception for France, he would also require an exception for Portugal.
M/126 The Chairman re-took the vote, this time for applicability worldwide except France
and Portugal, and PSG review of the collection process.
M/127 A member asked for clarification. He assumed that the exceptions related to the
original proposal, in which case the current text would remain in for France and Portugal but
not for other countries. He did not see any reason why there should be exceptions if the text
in the counterproposal was adopted. Another carrier also did not understand why there
should be any exceptions in the counterproposal.
M/128 Mr. Lugo was puzzled by the suggested amendment and curious to understand how
the airlines would see this working with the Prejudiced Collection of Funds provision. The
member proposing the new text explained that in exceptional cases, when an airline felt its
funds were at risk and had some intelligence but no proof it could provide to IATA, it would
llike to reserve the right to collect those funds from the agent rather than lose the funds if the
agent went into default.
M/129 The Chairman took a final vote on the counterproposal, applicable worldwide with an
exception for France and Portugal. The proposal was adopted with 12 carriers abstaining.
M/130 A member thought the high number of abstentions was a very bad sign, and basically
conference had not agreed to the change. He suggested the item be taken up at the next
PSG meeting.
M/131 The Chairman recognised that France and Portugal had some difficulties with this
item. He also acknowledged that others were nervous about what had been adopted. He
therefore suggested putting an effectiveness date of 1 January 2016 on the revised text, in
order to give time for review at the next PSG meeting to see whether the revised text could
be improved upon for presentation to the next Conference. Members agreed with this way
forward.
Action:
PSG
AGENDA ITEM R6 – AMENDMENT TO RESOLUTION 850 – ATTACHMENT ‘C’
M/132 Conference unanimously adopted this proposal originating from IATA Airline
Participation Management to amend Resolution 850 Attachment ‘C’ by adding a footnote to
the Counterindemnity Agreement to ensure the document is signed by the Airline’s Head
Office, CEO, CFO or Director General.
AGENDA ITEM R7 – AMENDMENT TO RESOLUTION 850 – ATTACHMENT ‘E’
M/133 Conference unanimously adopted this proposal originating from IATA Airline
Participation Management to amend Resolution 850 Attachment ‘E’ by adding a footnote to
the Form of Concurrence to ensure the document is signed by the Airline’s Head Office,
CEO, CFO or Director General.
AGENDA ITEM R8 – RESOLUTION 850 PARAGRAPH 14 – VOLUNTARY TERMINATION
AGENDA ITEM R10 – CANCELLATION OF ELECTRONIC TICKETING AUTHORITY
AGENDA ITEM R11 – AMENDMENT TO RESOLUTION 822 – IATA NUMERIC CODE
AGENDA ITEM R12 – AMENDMENT TO RESOLUTION 800a – APPLICATION FORM
M/134 The Chairman thought these items were straightforward and took them together as a
package, commenting that the Agents were opposed to item R10.
M/135 On a formal vote, items R8, R10, R11 and R12 were adopted as presented.
AGENDA ITEM R9 – RESCISSION OF RESOLUTION 824s
M136 Conference adopted the proposal from the IATA Regional Office Europe to rescind
Resolution 824s effective 1 January 2015 on the basis that this was an outdated resolution
relating to the old paper ticket environment.
AGENDA ITEM R13 – ONLINE AGENT AND PREJUDICED COLLECTION OF FUNDS
M/137 This item was withdrawn and the issue dealt with under items R33 and R47.
AGENDA ITEM R14 – IMPROVEMENTS TO RESOLUTION 800f
M/138 The Chairman presented this item, revision 1 dated 16 September 2014, explaining
that the proposed changes to Resolution 800f were largely of an editorial nature to provide
better clarity and relevance of the criteria.
M/139 On a formal vote, Conference adopted the resolution changes shown in Attachment
‘A’ of the paper, as sent out in the 1st Transmittal with the exception of pages 4 and 6 which
were revised and sent out in the 2nd Transmittal.
AGENDA ITEM R15 – PROVISIONAL SALES AGENCY AGREEMENT
M/140 Conference approved the changes to resolutions 818g and 800 shown at Attachment
‘A’ to the paper, which were of an editorial nature as a consequence of PAConf action last
year to remove references to a provisional Sales Agency Agreement.
AGENDA ITEM R16 – BSP MEXICO AGENCY SOLUTION (BSP MAS)
M/141 Mr. Gonzalo Robles, VP Sales and Business Development from Aeromexico gave a
detailed presentation on this project, explaining that BSP MAS had come about in response
to the difficult conditions in the Mexican market. He shared with PAConf some facts and
figures that would help explain the drivers for this project, the first being the decrease in the
number of accredited agencies by approximately 65% over the last 10 years, from 2,200 in
2003 down to 840 in 2013. Another important consideration was that credit card sales in
Mexico were growing by the day, representing 65% of gross sales in 2013, and this number
has risen in the last 3 months to close to 75% owing to the government strategy to
encourage the use of credit cards instead of cash.
M/142 Aeromexico believed these concerns could be addressed through two objectives:
firstly to take action to stop the loss of IATA agencies; and secondly to recover and promote
the accreditation of new agencies. The proposed solution was the creation of a ‘lighter’
accreditation model which allowed agencies to ticket only by credit card transactions.
M/143 The new proposed model would operate under a formal process with the travel
agencies having to comply with all the current requirements and resolutions. Agents wanting
to join BSP MAS programme would have to comply with the following conditions:
•
•
•
•
A supplementary agreement to the PSAA
Agreement to limit transactions to credit card via their GDS
Annual financial statements review comprising tax declaration
Responsible for settling any chargebacks resulting from non-compliance with r890
via ADMs (BG will be required if ADMs exceed 5,000 USD in a 3 month period)
M/144 Mr. Robes outlined the benefits to both the airlines and agents of the new programme
explaining that these agents would have a distinct IATA numeric code, making them easily
identifiable so that airlines could choose whether or not to do business with them.
M/145 During the question and answer session that followed, it was clarified that it would be
the passenger’s credit card that was used, and the credit card transaction would be limited to
electronic swipes only. Responding to a carrier’s request to include this in the new criteria,
the Chairman advised that the new proposed Local Financial Criteria would not be amended
at this stage, but that this would be clearly minuted and it could then go back to the APJC to
come forward with a revised text. The carrier agreed with this approach.
M/146 Another carrier asked how an agent would be restricted to credit card only
transactions, and whether it would be possible for an agent to circumvent the system and
accept cash payment, even though they might have signed a new PSAA. Mr. Gallego
advised that IATA had been working over the past few months with the GDSs to make sure
that it would not be possible for agents to circumvent the system. He stressed that this was
a pilot solution for Mexico only at the moment. He referred to the presentation the previous
day on the new accreditation model and creation of Tier 3 agents. The pilot in Mexico could
be also considered as the pilot for the Tier 3 agents. It was not intended to be an isolated
model but depending on the experience in Mexico, was expected to be extended to other
areas later under the new programme.
M/147 On a formal vote, PAConf endorsed the BSP Mexico Agency Solution, including the
amendments to Local Financial Criteria shown in Attachment ‘A’ of the paper, with one
carrier abstaining.
M/148 The Chairman congratulated Aeromexico on this result.
AGENDA ITEM R17 – REPRIMAND
M/149 Mr. Gilmartin introduced the paper relating to provisions in Resolutions 800 and 818g
for the issuance of a reprimand to an Agent. However he was not aware of a reprimand ever
having been issued and there were no actions attached to it. It was felt that this was an
outdated provision that had no place in modern business practice. As members would see
with the Minor Error Policy, IATA would prefer to have more flexibility in the way the rules
were applied when no money was at risk and in such cases the agents should be charged
for any administrative work related to that on a cost recovery basis. That was the basis
behind this proposal.
M/150 On a formal vote, Conference unanimously adopted the resolution changes shown at
Attachment ‘A’ to the paper.
AGENDA ITEM R18 – REVISION OF ANNUAL FEES FOR 2016 ONWARDS
M/151 This item was withdrawn and superseded by item R42.
AGENDA ITEM R19 – MINOR ERROR POLICY
M/152 The Chairman drew attention to Revision 2 of this document dated 16 October 2014
circulated on site.
M/153 Mrs. Vité explained that this proposal had been developed as a result of feedback
from the three Travel Agency Commissioners, and discussion at PSG and PAPGJC. It
concerned the treatment of ‘administrative errors’ made by Agents which under resolution
would result in Irregularities or Default action, but where no monies were at risk. The paper
set out a proposed ‘Minor Error Policy’ that would enable IATA to make exceptions for such
administrative errors, with the objective of resolving the vast majority of appeals from Agents
in a more satisfactory way, especially those which would otherwise be escalated to the
TACs.
M/154 Outlining the scope of the policy, Mrs. Vité explained that Late Notification of Change
of Ownership or Location were the subject of a separate agenda item (R43). Late payment
of annual fees had also been dealt with previously through resolution changes effective in
2014. Short payments would be considered on a case-by-case basis. The paper therefore
proposed changes to Resolution 818g as set out in Attachment ‘A’ relating to Late
Submission of Financial Documents.
M/155 A member advised that they had problems with the suggested changes in respect of
Short Payment included in the revised paper sent out in the Second Transmittal. Mrs. Vité
confirmed that that had since been removed from the 2nd revised paper distributed on site.
M/156 With this clarification, and on a formal vote on the document dated 16 October 2014,
PAConf adopted the changes to Resolution 818g, Paragraph 2.2 in respect of Late
Submission of Financial Documents for expedited effectiveness of 1 January 2015.
ITEM R20.1 – CHANGE IN REMITTANCE FREQUENCY – BSP RUSSIAN FEDERATION
M/157 Conference approved the submission by majority vote of the APJC for a change in
remittance frequency in BSP Russian Federation from 3 to 4 times per month effective 1
January 2015.
AGENDA ITEM R20.2 – CHANGE IN REMITTANCE FREQUENCY – BSP LITHUANIA
M/158 Conference adopted the proposal from the APJC to change the remittance frequency
in BSP Lithuania from fortnightly to weekly effective 1 October 2015.
AGENDA ITEM R20.3 – CHANGE IN REMITTANCE FREQUENCY AND LOCAL
FINANCIAL CRITERIA – BSP GERMANY
M/159 PAConf adopted the unanimous proposal from APJC Germany to move from monthly
to twice monthly remittance in that market effective 1 March 2015. Conference also adopted
the proposed changes to Local Financial Criteria shown at Attachment ‘A’ to the paper,
defining the minimum financial security in respect of twice monthly remittance at EUR 20,000
and a change in the transit account to make it available to all agents as an alternative
financial security, also effective 1 March 2015.
AGENDA ITEM R20.4 – CHANGE IN REMITTANCE FREQUENCY - PHILIPPINES
M/160 A member presented this proposal from APJC Philippines, explaining that it would
have come forward as a unanimous submission but one member airline had wanted earlier
implementation. With that clarification, Conference adopted the proposal to move to
‘Express Weekly’ remittance in BSP Philippines effective 1 July 2016.
AGENDA ITEM R20.5 – CHANGE IN REMITTANCE FREQUENCY - KENYA AND
UGANDA
M/161 A member spoke to their paper, giving the background to their request to implement
fortnightly remittance in Kenya and Uganda. The East African market was not harmonised
with respect to remittance patterns, with Kenya and Uganda currently on monthly remittance
whereas Tanzania was on fortnightly. The market had evolved since the inception of the
BSP, with mobile money transfer, credit and debit cards had been introduced into the market
and the financial market was being pushed to real time. The issue of remittance frequency
had been discussed in APJC meetings over the last two and a half years, without
conclusion. The need for moving to more frequent remittance from the airlines side was
driven by the need to reduce financial exposure, improve cash flows, and respect their
obligations to suppliers and the IATA Clearing House.
M/162 Negotiations with the travel agents in the APJC had started in 2011 when the airlines
initiated talks to change to fortnightly remittance for both Kenya and Uganda. The member
took PAConf through the chronology of events, and the 4 APJC and 5 FAG meetings that
had been held since then, still with no agreement on this issue. Hence the member
submission to Conference, proposing the move to fortnightly agreement for Kenya and
Uganda for implementation 1 January 2016 in order to give a reasonable period of time for a
smooth transition and for the agents to be able to make the necessary changes in their
business contracts.
M/163 The Chairman thanked the member for the very detailed explanation and took a
formal vote on the proposal. Conference unanimously endorsed the proposal to move to
fortnightly remittance for Kenya and Uganda from 1 January 2016.
AGENDA ITEM R20.6 – CHANGE IN REMITTANCE FREQUENCY BSP GULF AREA
AGENDA ITEM R20.7 – CHANGE IN REMITTANCE FREQUENCY BSP NEPAL
M/164 These items were withdrawn.
AGENDA ITEM R20.8 – CLARIFICATION OF REMITTANCE FREQUENCY – BSP JAPAN
M/165 Conference noted the revised submission from APJC-JP dated 12 October 2014 and
unanimously adopted the proposed amendment to Resolution 818g, Attachment 'C’ under
Reporting & Remittance Exceptions for Japan Only effective 1 January 2015, with a further
amendment effective 1 October 2015.
AGENDA ITEM R20.9 – CHANGE IN REMITTANCE FREQUENCY – BSP CENTRAL
WEST AFRICA
M/166 A member introduced this item, explaining the purpose was to obtain PAConf’s
approval to move from monthly to fortnightly remittance for the CWA market. As
background, he explained that the current Local Financial Criteria did not sufficiently cover
the risk for the agents’ sales. The level of discount under the LFC for bank guarantees for
travel agents in existence for more than two years sometimes went up to a 45% reduction
which was a high risk for the airlines. The same also applied to travel agencies that were
members of the Mutual Fund where the mode of the calculation of the amount of the BG did
not really cover the risk for the airlines.
M/167 The airlines in the market were keen to move to more frequent remittance but the
travel agents had been very reluctant to agree to this initiative, despite the issue being raised
at the last four APJC meetings, as documented in the attachment to the paper. Hence the
submission from the airlines, given the high risk involved, to ask for Conference approval to
move ahead with twice monthly remittance in this market.
M/168 On a formal vote, Conference unanimously adopted the proposal to move to 2x
monthly remittance for BSP Central West Africa with effect from 1 January 2015.
AGENDA ITEM R20.10 – CHANGE TO REMITTANCE FREQUENCY – BSP LATVIA
M/169 Conference voted unanimously in favour of adopting the proposal from the APJC to
move BSP Latvia to weekly remittance for all Agents effective 1 January 2016.
AGENDA ITEM R20.11 – CHANGE IN REMITTANCE FREQUENCY AND LOCAL
FINANCIAL CRITERIA – BSP ESTONIA
M/170 Conference adopted the proposal from APJC Estonia to change the remittance
frequency for BSP Estonia from twice monthly to weekly for all Agents effective 1 October
2015.
M/171 Conference also unanimously endorsed the changes to Local Financial Criteria for
the market as shown at Attachment ‘A’ to the paper for 1 October 2015 effectiveness.
AGENDA ITEM R21 – DEFERRAL OF REMITTANCE DATE FOR BSP INDIA UNDER
SPECIAL CIRCUMSTANCES
M/172 A carrier from the market advised that this proposal had been submitted by APJC
India at the request of the travel agents for a deferment of the remittance data of not more
than one day to cover unscheduled banking closures in certain parts of the country.
M/173 A member questioned the need for any exception as in such circumstances the
remittance date would automatically roll over to the next day under the rules. Mr. Lugo
believed this would be covered by the Force Majeure provision in Section 13.9 of Resolution
818g stating that ‘the Agent shall not be liable for delay or failure to comply with the terms of
the PSAA to the extent that such delay or failure (i) is caused by act of God, war, ……….or
any other cause, ‘. Even if the banking closure only occurred in some States, he believed
the agents would be covered by these provisions.
M/174 Mr. Gilmartin added that they should also bear in mind the operability in the regional
hubs of any provisions that Conference may adopt. The question was, how would IATA
determine that there had been an unscheduled bank closure, what evidence would need to
be presented to demonstrate that there had been an unscheduled bank closure - it could be
nothing or everything. It was critical for IATA in terms of delivering on-time money that the
IATA staff in the region knew what to do when presented with an agent who had not paid.
Therefore they needed to be very clear about any acceptable circumstances and how these
were defined. He turned to his colleague from the IATA Regional Office in Singapore and
asked whether the Reserve Bank of India published a schedule of holidays in that way that
the R&S team could use to verify why an agent had not paid.
M/175 Mr. Prabaharan stated that the proposal concerned any unscheduled holidays in
between the end of the reporting period to the remittance date, a seven day gap. The
resolution provided for two scenarios, one under Force Majeure, the other if the remittance
day fell on a bank holiday, when it would roll over to the next day. The IATA Regional Office
could work with both these existing scenarios. The BSP Calendar was based on advice
from the Clearing Bank whether banks in a particular area were closed or working. IATA
could manage under the existing two provisions.
M/176 With that clarification, the Chairman took a formal vote and seven carriers were
opposed to the proposal. A member explained that this was already covered in the
provisions, when the remittance date was automatically delayed until the next working day.
That had never caused a problem in any country in the world and in addition the Force
Majeure provisions would cover unscheduled closures. There was no need for any
additional resolution amendment. The Chairman therefore declared the item defeated on
the basis that the market was already covered.
AGENDA ITEM R22 – REINTRODUCTION OF JOINT BANK GUARANTEE SCHEME –
INDIA
M/177 At the beginning of Conference on the second day, in a closed session, the
Chairman opened the floor to a presentation on this item from Mr. Sunil Kumar, Acting
President Travel Agents Association of India (TAAI). Other agency representatives from
WTAAA and UFTAA were also in the room for his presentation.
M/178 In addition to the agenda paper from APJC India, the agent representative described
the TAAI Joint Bank Guarantee Scheme in great detail, explaining that it had been operating
successfully in the market for over 20 years, without any losses to the airlines from the
agents participating in the scheme. Mr. Kumar urged Conference to reconsider the
introduction of the new improved JBG scheme proposal for India as submitted to IATA.
M/179 Following the presentation, the national carrier explained that this proposal had been
submitted by the APJC, following discussions about the increasing number of defaults and
increased amounts of unpaid defaults in India. The previous JBG scheme had operated
successfully in the market for 22 years and this scheme proposed an even better coverage
than before.
M/180 The Chairman opened the floor to any questions or comments. Mr. Prabaharan
commented that the text of the agreement for the new scheme had not yet been reviewed by
IATA Legal and it would need that review before putting in place if agreed by Conference.
He wanted to highlight that, in case of a default invoking the Joint Bank Guarantee, all the
members covered by the particular BG would be considered as not fulfilling the agency rules
because they would not have a financial security backing them. In this case, all those
members in the scheme would have to furnish a bank guarantee immediately and if they did
not, would be put into default. That should be understood by the travel agents’ association,
all the participants in the scheme and the members here. Mrs. Vité added, with respect to
payment after default and timing, having reviewed all the clauses in the proposed
agreement, that IATA would look to ensure that following termination, which was when IATA
requested the encashment of the financial security, it must be clear that it would be 100% of
the unrecovered amount that would be paid by the JBS.
M/181 The agent representative confirmed this understanding. Payment to IATA would not
be delayed because the scheme provided a cash deposit with the bank, not collateral. The
nitty gritty details of the agreement could be worked out, in accordance with the resolutions
and the agents were open to discussions to iron out the details. As to timelines, in the past
the JBS had always paid out promptly. His association had existed for 63 years, it was the
largest association in India with over 1500 members, and TAFI, the other travel agents
association involved in the scheme, had about 900 members. This covered many IATA
accredited agents and there was a lot of interest in ensuring the success of the scheme.
M/182 A member noted that this was a lot of agents. He asked whether they would all be
covered by the scheme and what would happen if, say, 25 agents went into default at the
same time? Would the cash deposit be so high that it would cover all those revenues which
were at stake?
M/183 The agent representative advised that of their 1500 members, in the past only 250
had chosen to be part of the scheme. That illustrated the prudence with which they selected
who could participate in the scheme and that was why he had spent time during his
presentation defining the qualifications required to join. The amount of corpus that would be
collected would be 0.3% of the cumulative annual sales of all the members in the scheme,
which was a very large amount. It had only been 0.1% under the previous scheme but the
airlines had felt that in the current environment this should be increased to 0.3% of the
annual sales of all the agents put together.
M/184 Asked how the airlines would know which agents participated in the scheme, the
agent representative advised that the agreement would set out the names of the
participating agents, and all the airlines would be sent the list of these agents so they would
be aware of this. The scheme also helped the airlines to suggest to the association if any
agent was over trading, so the airlines were always in the loop. As discussed in the APJC,
the scheme would satisfy the airlines with prompt payment of any default and there was a
very tough process for screening members.
M/185 Another carrier commented that a similar scheme, the CWA Mutual Fund, operated in
his market and asked for more details on how the scheme would be run, visibility of the
airlines, and how would the scheme recover if several agents went into default at the same
time. The agent representative advised that this was not a fund, it was a cash deposit with
the bank and easily available to IATA, so access was not a problem. He felt that the corpus,
raised to cover 0.3% of the agents’ annual sales, would be sufficient to cover any defaults.
He went on to further explain that in the event of a default, the association would pay out
50% of the default immediately and the remainder within the governing resolutions timelines.
With an individual guarantee, the airlines would have to wait until the entire amount was paid
to IATA, but in this way they would have some of the money immediately.
M/186 A member asked for IATA’s view of the Joint Bank Guarantee Scheme, and what
elements should the carriers be aware of? Mrs. Vité advised firstly that IATA Legal would
need to review the terms of the agreement and in particular ensure that it was very clear
about what would happen when IATA called on the bank guarantee if an agent was in
default or was terminated. She would also review the proposed contract properly because
there were other issues that would need to be worked through before she could comment
further.
M/187 The Chairman asked the agent representative to confirm that there was no beneficial
interest in this for the agency association or the airlines or anybody else directly involved in
the scheme. The agent representative confirmed there was no commercial or financial
benefit to his Association. In fact the Association had to invest money to manage the
scheme and although this was a considerable investment, they saw it as a service to their
members rather than an expense. The question of any benefit to the Association through
the scheme did not arise.
M/188 The Chairman thanked Mr. Kumar for his presentation and asked the agent
representatives to leave the room. Once the agent representatives had left, the Chairman
advised that Conference was back in formal session and asked if there were any further
questions or comments.
M/189 A member suggested that the proposal should be referred to PSG for further
consideration, however the Chairman did not want to delay action on this item. He took a
vote on the following basis: Conference to endorse the scheme in principle on the
understanding that (1) it was to be reviewed by IATA Legal (2) it would go back to the APJC
for further refinement based on any comments made by IATA on the programme that had
been submitted under Attachment ‘A’ to the paper. If necessary, it could be referred to the
PSG meeting in March for further review but that could mean another 5 months before
anything happened.
M/190 A member advised that there was another item on the agenda, R39 relating to the
Financial Security policy, which was pertinent to this issue and suggested that Conference
address that item before taking a vote on this issue.
M/191 With the carrier’s agreement, the Chairman advised that he would rather do it the
other way around, but the carrier could have a reserved position if they wished. On a formal
vote on R22, on the understanding that it would go for review to IATA Legal and that it had to
be sent back to the APJC for further refinement, and to respond to the questions and queries
raised regarding how the scheme would operate, he asked if there was any opposition to
adopting the scheme going forward? Conference endorsed this approach, with 4 carriers
abstaining.
AGENDA ITEM R23 – REVISION OF ECUADOR CALENDAR REPORTING PERIOD
AGENDA ITEM R24 – CHANGE IN BSP CALENDAR – CENTRAL AMERICA
AGENDA ITEM R25 – CHANGE IN CALENDAR OF REPORTING PERIODS – BSP
MEXICO
M/192 The Chairman took these items together as a package as they all related to BSP
Reporting Calendars in LATAM countries. Conference unanimously adopted the revised
calendars for BSPs Ecuador, Central America and Mexico.
M/193 Later in the meeting, a Member from the region asked for Item R24 to be re-opened,
explaining that the wrong paper had been submitted for the agenda and the APJC were in
agreement with the following calendar:
Reporting period 1:
Reporting period 2:
Reporting period 3:
Reporting period 4:
From day 1 to day 7 of the month
From day 8 to day 16 of the month
From day 17 to day 24 of the month
From day 25 to the last day of the month
M/194 On a formal revised vote on item R24, Conference endorsed the revised calendar set
out by the Member.
M/195 Also later in the meeting, another Member asked to re-open R25 in order to record
their abstention on this item due to a request from their US Manager, who would like the
remittance date to be shortened to 5 days.
AGENDA ITEM R26 – REVIEWS BY THE TRAVEL AGENCY COMMISSIONER
M/196 Mr. Lugo brought this item to PAConf’s attention on behalf of WTAAA/ECTAA. The
two agency groups had highlighted that the Travel Agency Commissioners had reported that
nearly 90% of TAC cases were generated by administrative problems and not by any money
related irregularity. Interlocutory relief being granted by the TAC required presentation of a
bank guarantee. This was considered by the agents to be burdensome when no airline
money was at risk, so WTAAA/ECTAA were requesting an amendment to Resolution 820e
to specify that a bank guarantee would only be required in instances where airline funds
were considered to be at risk. In his view, the proposed changes were reasonable but he
was aware that others might have a different opinion.
M/197 Mrs. Vité pointed out that the issue of administrative errors was being addressed
through the Minor Error Policy. In addition, in some instances, such administrative errors
like the late submission of financial accounts, might not necessarily be a financial risk but
could be a signal that the agent was in trouble. There had been such an issue with AFT.
Mr. Gilmartin added that they were addressing the effect, and not the cause. If there was a
problem with accounting irregularities, he questioned why they were awarding IRRs in the
first place and not addressing the root cause, which was the awarding of the IRR.
M/198 The Chairman stated that this put Conference in a difficult position. Nevertheless, he
took a vote on the item as presented. Conference unanimously approved the proposal and
adopted the amendment to Resolution 820e as set out in the paper, and consequential
amendments to Resolution 818g, Attachment A, paragraphs 1.8.3 and 1.10.6.
M/199 The Chairman added that this was the first time Conference had adopted a paper
from the Travel Agency Associations. It was an historical event, and he felt this boded well
for the future.
AGENDA ITEM R27 – RESOLUTION 890 – CARD SALES RULES
AGENDA ITEM R27.1 – RESOLUTION 890 – CARD SALES RULES
AGENDA ITEM R28 – AMENDMENT TO RESOLUTION 890, PARAGRAPH 1.4
AGENDA ITEM R29 – AMENDMENT TO RESOLUTION 890, PARAGRAPH 1.4
M/200 The Chairman took these submissions together as a package as they all related to
the same subject, namely a change to Resolution 890 paragraph 1.4. He drew attention to
an onsite submission, item R27.1, from WTAAA/ECTAA which was a compromise solution
submitted following a PAPGJC meeting earlier in the week. This item replaced the original
submission under R27. Opening up for discussion, the Chairman asked Conference to
concentrate on item R27.1, as being probably the best one to provide a solution.
M/201 Mr. Gilmartin stated that this was one of the key issues with relation to acceptance of
cards in the name of an agent. Section 1.4 had received a very large amount of attention
and debate and IATA had received a lot of approaches from card providers like eNett, who
produced VANs. The question from eNett in particular as one provider had been that they
did believe that their product was covered by Resolution 890 because it was not really a
card, it was an electronic arrangement and not a card in the name of the agent. That was
one case. Other cases were traditional cards like AMEX and UATP, amongst others, who
were keen to get into this market and provide their solutions to agents to be used as a form
of payment in the name of the agent. So IATA had been receiving multiple challenges on
that side. On the other side, IATA knew there were differences of opinions from the airlines
with regard to changing Resolution 890 1.4, with some carriers being relatively relaxed about
even removing the provision entirely and others totally opposed to it. Therefore IATA was in
a difficult position in terms of managing the airlines and indeed the agents, as evidenced
here with this particular submission, and was under pressure from all sides.
M/202 The WTAAA/ECTAA paper also highlighted the fact that in many markets this rule
was not being respected and indeed airlines were effectively accepting cards from agents in
their own name. The ethical agents out there who wished to be fully compliant with the IATA
rules were calling foul and drawing this to IATA’s attention, saying that it was not fair, that
those agents who were not respecting the rules were putting agents who did comply with the
rules at a competitive disadvantage. There was a financial aspect to this as well as a facility
that the TMCs would like to offer to their customers, who could have very high volumes, and
indeed some of the TMCs would like to offer their own card offering to their clients in the
same way. So there were a variety of papers on the agenda, generally on the same theme,
but with some variance on the proposed action.
M/203 The Chairman felt it was clear that something needed to be done. Again, he asked
Conference to concentrate on item 27.1 issued the previous day onsite, which he believed
would take care of the papers submitted by APJCs Poland and India. Conference agreed
with this approach.
M/204 The Chairman commented that the travel agents would also support the amendment
put forward in R27.1 and he suggested one further clarification before calling for comments,
to amend the proposed 1.4 to read ‘in the absence of specific permission of a Carrier the
validating BSP airline’
M/205 A member supported this change because it would leave the position at status quo for
carriers that did not want to change and for those that did, it was permissive. He viewed this
as a commercial issue for carriers rather than one that should be covered by resolution in
terms of blanket prohibition. He proposed one further change to the text, in line with ARC, to
amend 1.4.2 to remove the word credit to read ‘Agent must not use a credit card which is
issued in the name of the Agent’.
M/206 Other carriers signalled their support for this further change.
M/207 A carrier asked, if an airline granted permission, whether this would be permanent.
The Chairman advised that this would be up to the carrier and depend on how the carrier put
this into their rules applicable to the agent.
M/208 Another member asked whether, as this was an onsite paper and quite different from
the original submission, PAConf could be given more time to review it and understand the
implications. The Chairman advised that the item was legitimately on the agenda, related to
a document that had been placed on the agenda in accordance with the schedule, and he
would be taking a vote to finality as it was not something that could be postponed.
M/209 The Chairman then took a formal vote on item 27.1, with 1.4 amended to read ‘of the
validating BSP airline’ and 1.4.2 to read ‘Agent must not use a credit Card which is issued in
the name of the Agent’. One member voted negative, explaining that she could not take any
position in support of the proposal at this stage.
M/210 The Chairman repeated that this was a very important item, properly on the agenda.
The carrier was the only negative. People wanted this amendment and in his opinion, this
change was long overdue. There had been mounting criticism about how the credit card
rules applied and both the travel agents and airlines worldwide were seeking this
amendment. He advised he would just check the level of support to the change, to ensure
that his understanding was correct. A show of hands indicated overwhelming support for the
proposal. He asked the member whether they would be prepared to abstain.
M/211 The member advised that the credit card provisions were very important to her airline
and they were satisfied with the current 1.4 provision in the resolution today. She would
need to check back with her head office about the onsite submission but unfortunately due to
the time difference, it was now the weekend there and the office would already be closed.
M/212 In an attempt to help the member, another carrier explained that if adopted, this would
not commit any carrier to changing their current policies. If the member wished to prohibit
the use of cards in the name of the travel agent in any form that that may take, they could
still do that because unless they actually published specific permission to agents in
whichever market they chose, then essentially the current provision in 1.4 would remain in
place. In other words, there would be no change for the member to their current policy
unless the member made any changes themselves. He saw this being a very flexible
arrangement for airlines that wished to stay with the current process.
M/213 The Chairman thanked the member for this helpful explanation. He would also add
that these rules were applicable in ARC and the carrier lived with them today in the US, so it
had the ability to carry on with its company policy worldwide in relation to card sales.
M/214 Another member came out in support of the opposing carrier because in their market
they had a slightly different situation and believed this amendment would create a
competitive distortion in their market. He too would have to go away and investigate further
before accepting the change.
M/215 Mr. Lugo strongly disagreed with the comment regarding a competitive disadvantage.
This amendment would offer additional options within the market, placing each carrier free to
make their own independent commercial decision according to their particular policy. The
Chairman agreed with Mr. Lugo.
M/216 Another carrier raised two further aspects which had not been covered previously.
The first related to local financial criteria and the necessity of submitting a bank guarantee
based on cash sales. With such an arrangement, an agent could at its own will change from
credit card to cash and back again and therefore could undermine the system of bank
guarantees. The second point was that many carriers had agreements for bonus systems
and were unable to distinguish if a ticket was bought with such a card or not, so agents were
using them widespread, collecting bonus points, and the airlines could not control this. It
could endanger the whole system but the airlines could not stop it. Nevertheless the carrier
would abstain on this item by name.
M/217 The Chairman made another attempt to remove the negative vote. He asked, if the
minutes were to reflect that there would be no change to an individual carrier’s position with
regards to acceptance of cards in the name of travel agents, that each carrier was free to
determine how and what cards it would accept, whether the carrier would be prepared to
abstain.
M/218 The member advised that her company’s position was not to extend the use of an
agent’s card globally. Their position was to retain the current 1.4 wording. Although the
carrier was sorry to be the only negative, the delegate was not in a position to abstain at this
stage.
M/219 The Chairman asked whether was any way the carrier could come back with a
decision within 24 hours. Again the carrier advised it was already the weekend for her Head
Office and she would not be able to take a decision on such an important topic as this
without consulting with her Head Office.
M/220 The Chairman expressed his disappointment. The paper had been made available
on site the previous day but the carrier had taken no action to consult earlier with her Head
Office to see if it were possible to change their vote. He was most disturbed at having to
declare this paper defeated. The carrier was preventing things moving forward when there
was clearly a demand worldwide to change the credit card rules. He asked that this be
reflected in the minutes.
M/221 Mr. Gilmartin advised that this would put IATA in a very difficult position that would be
impossible to manage operationally going forward. If 1.4 was left unchanged, IATA would
not be able to enforce it because, as he had already advised, many carriers were accepting
card sales from agents in their own name today without complaint. It meant that IATA was
not in a position to enforce the provision. This was a bad position for IATA to be in because
IATA’s view was that all resolutions must be properly complied with and respected. IATA
also had to bear in mind that many agents were saying that they wanted to abide by the
IATA rules but were noting that many others were not. That put IATA in an impossible
position and the only outcome was that IATA would have to give advice to its operational
hubs that it would not take any action against agents who were using their own cards where
the airlines had indeed granted their permission, irrespective of the rules. That was a very
bad situation for IATA to be in.
M/222 A member commented, with respect, that none of the IATA offices worldwide had
been able to control this in the past and would not be able to control it with this resolution
change either because it did not really change things.
M/223 With respect to IATA’s ability to monitor the reality of this behaviour, Mr. Gilmartin
explained that what could happen was that an airline could bring that situation to IATA’s
attention and expect IATA to take action under the provisions of r890. That was not a
position IATA could take going forward given the circumstances he had described now.
M/224 The Chairman asked once again if the carrier would reconsider, otherwise they would
be named in the minutes. Again, the member maintained their position and would review the
issue on their return home.
M/225 The Chairman therefore declared the item defeated on the basis of the negative vote
of one carrier, KE. He asked the delegate to take the document back their Head Office to
see if KE would be prepared to accept the revised wording as presented to conference. He
hoped that they would realise that this would not mean any change whatsoever to the
carrier’s policy in terms of credit card acceptance. If the carrier indicated any change in their
position, then they would look to issuing a mail vote.
M/226 A member raised an issue that in the proposed 1.4.2 there was no reference to the
ownership of the agency, which there was in the current 1.4. The Chairman advised that
that would be taken into consideration if they ever got to re-issue the item as a mail vote.
Meanwhile, the item was defeated and they would see where they went from here.
AGENDA ITEM R30 – REQUEST FOR THE LOCAL FINANCIAL CRITERIA – BSP ITALY
TO PREVAIL OVER RESOLUTION 818g
M/227 Turning to this submission from APJC Italy, the Chairman advised the paper was
self-explanatory and the APJC was trying to override the hierarchy of the resolutions in
seeking to retain the requirement in their Local Financial Criteria for any adjustment in the
Financial Security to be provided within 60 working days, instead of the 30 days set out in
resolution.
M/228 Taking into account discussions earlier in the meeting relating to recent defaults and
the need to strengthen agency risk management, a Member considered that this proposal
was going in the wrong direction and could not agree to extend the deadline to 60 days.
M/229 Several carriers agreed with this view and on a formal vote, many negative votes
were recorded and the proposal was declared defeated.
AGENDA ITEM R31 – TEMPLATE FOR LOCAL FINANCIAL CRITERIA
M/230 This item was replaced and dealt with under item R49.
AGENDA ITEM R32 – CHANGE IN PRORATION METHODOLOGY – EXCEPTION FOR
SINGAPORE
M/231 A member presented this paper on behalf of LCAG-P Singapore, explaining that it
was difficult to ensure that an airline’s amount at risk was fully covered by the industry
Financial Security. An airline could use the BSP-SG’s Agent Monitoring Report to do their
own risk management and decide to regulate an Agent’s ticket stock limits to ensure that the
airline’s exposure to financial risk was mitigated in the event of Agent default. However,
there could be situations where a participating airline, or airlines, chose not to restrict
ticketing and provided higher ticket limits, resulting in the amount at risk being in excess of
the value of the Financial Security provided by the Agent. Under such circumstances,
airlines stood to lose significantly because of the liberal ticketing authority policies of other
participating airlines.
M/232 The LCAG therefore proposed an amendment to Resolution 818g for an exception
for Singapore Only in respect of the encashment and proration of any financial security,
whereby each BSP Airline would be provided with a prorated amount of the Financial
Security in proportion to its percentage share in the billing up to the date when the full
amount of the Financial Security was exceeded.
M/233 On a formal vote, Conference unanimously adopted the proposed amendments to
Resolution 818g, Attachment ‘A’, Paragraph 1.10.4 as set out on pages 2 and 3 of the
agenda paper, for expedited effectiveness of 1 January 2015.
AGENDA ITEM R33 – ENHANCED AGENT CREDIT MONITORING
M/234 Mrs. Vité explained that this paper set out the action that IATA was taking in the short
and medium term to strengthen Agency Risk Management as a result of the AFT default.
The issue had been covered earlier during the SVP FDS report.
M/235 Conference noted the report.
AGENDA ITEM R34 – RESOLUTION 818g FOR SUDAN (NORTH) AND NEW LOCAL
FINANCIAL CRITERIA
M/236 Conference endorsed the proposal to migrate Sudan from Resolution 800 to
Resolution 818g upon full implementation of the BSP effective 1 December 2014 and
adopted the supporting resolution changes shown in Attachment ‘B’ of the paper.
M/237 Concerning the proposed new Local Financial Criteria, whilst it was noted that the
new Criteria were unanimously agreed by the APJC, a Member pointed out the
inconsistencies in the wording for the financial security calculation in paragraphs 4.2/4.2.1.
Conference therefore adopted the proposed new Criteria shown in Attachment ‘A’ of the
paper, subject to further clarification by the APJC of paragraphs 4.2/4.2.1.
AGENDA ITEM R35 – AGENT OWNED BY SAME PARENT COMPANY AS MEMBER
AIRLINE
M/238 A member introduced their submission, explaining that the current rules in r818g
placed an unnecessary financial burden on an agent owned by a member or its parent
company in respect of the provision of a financial security. The proposed solution was that
the owning member’s sales pending settlement through the BSP should be considered as
collateral against the agent’s sales at risk, through the inclusion of additional text in
Resolution 818g under Section 2 Qualification for Accreditation.
M/239 Opening up for discussion, the Chairman stated that the proposal had far reaching
implications if adopted.
M/240 Mr. Gilmartin advised that as Secretary, IATA had facilitated the member to bring this
agenda item to Conference however was also required to disclose the full implications of the
proposal. He recalled that a similar proposal had come before Conference last year from
another member seeking another solution, when a different solution had ultimately been
arrived at. This proposal involved similar risk aspects. A member airline owning that agent
would be able to take advantage of this provision in the event that airline got into financial
difficulties and may have debts in the BSP that the other airlines in the BSP would have to
underwrite.
M/241 A member asked whether this would be truly feasible vis-à-vis local law but the
Chairman advised that if the agent was registered in various countries, local law would
always prevail over the resolution.
M/242 Another carrier questioned whether this would put other agents at a disadvantage but
the Chairman responded that that was up the carriers to decide.
M/243 On a formal vote, at least 12 carriers were opposed to the proposal. The Chairman
therefore declared it defeated.
AGENDA ITEM R36 – RESOLUTION 830a – CONSEQUENCES OF VIOLATION OF
TICKETING AND RESERVATION PROCEDURES
M/244 The Chairman advised that the member submitting this proposal was not present at
Conference but it was fairly self-explanatory. It proposed adding text in Resolution 830a to
cover no shows in the list of practices identified as a violation of ticketing and reservations
procedures. Mr. Gilmartin commented that the Travel Agents were opposed to the proposal
as this was a passenger request and not a function of the agents.
M/245 A member rejected the argument that this was at the will of the passenger only. It
was a broad misuse of the system and agents were doing it. A customer might not even be
aware of it, and when the airlines detected it, they wanted to charge the agents for failing to
release the unwanted reservation.
M/246 A carrier asked whether this was something that would be visible to the airlines. The
Chairman also had difficulty with the wording.
M/247 On a formal vote, two carriers were opposed and the item was thus declared
defeated.
AGENDA ITEM R37 – RESOLUTION 850m – ADMs
M/248 Again, the member submitting the item was not present but the paper was
straightforward, proposing an amendment to r850m to clarify that the action of booking a
seat was part of an agent transaction. It went in the same direction as the previous item.
M/249 A member stated his opposition to the proposal. It was an extension of r850m and
was most unwelcome.
M/250 On a formal vote, the member took a negative position and on this basis the
Chairman declared the item defeated. As the member submitting the proposal was not
present to defend the item, he would not pursue the issue further.
AGENDA ITEM R38 – NUMBER OF IRERGULARITIES TO TRIGGER DEFAULT – BSP
HUNGARY
M/251 PAConf adopted a proposal from APJC Hungary to increase the number of
Irregularities to trigger default in that market within 12 months to six instead of the existing
four, effective 1 January 2015 and the proposed amendment to Resolution 818g, Attachment
‘A’, sub-paragraph 1.7.5.2.
AGENDA ITEM R39 – FINANCIAL SECURITY POLICY
M/252 The Chairman drew attention to item R39 Revision 1 dated 16 October 2014
circulated onsite and invited Mrs. Vité to speak to the paper.
M/253 Mrs. Vité explained the background to the proposal, which had originated from a
global review of financial security types undertaken by IATA in 2011 and subsequently
presented to PSG, who had tasked IATA with developing a detailed road map with exit
strategies for each of the existing FS types that did not fulfil the purpose of recovering debts
owed by the Agent. The principles of the exit strategies were endorsed to be presented to
PAConf/36, together with supporting resolution amendments.
Although PAConf/36
supported the principle of what IATA was trying to achieve, Conference referred the item
back to the PSG for further discussion and development. The proposal was reviewed again
by PSG in October 2014 and endorsed to PAConf.
M/254 On a formal vote, Conference unanimously supported the proposal and adopted the
amendments to Resolution 850p shown at Attachment ‘A’ of the paper.
AGENDA ITEM R40 – EXEMPTION FROM ANNUAL FINANCIAL REVIEW
M/255 Mrs. Vité explained that currently in accordance with Resolution 818g, 2.2, IATA had
to conduct a financial review of all agents on an annual basis at a minimum. In some
markets, under the Local Financial Criteria, agents were required to provide a financial
security that was equivalent to the actual amount at risk, notwithstanding whether the result
of the annual financial review was satisfactory or not. This paper questioned whether in
these cases there was an added value in performing a financial review on agents when the
amount at risk was already fully covered. The proposed solution set out 3 preconditions that
would have to be met before those agents could be exempted from an annual financial
review.
M/256 A member was a little uncomfortable with this proposal. Whilst he understood the
desire to reduce administrative work and cost. This proposal would mean that an agent
could go for some time without having a financial review. Solely providing a financial
security might not be enough to provide sufficient information about the quality of an agent.
Another member believed it was important to have an annual review and to receive the
financial documents from the travel agents. The financial documents provided important
information in relation to cash flow and credit ratio that was very useful to know.
M/257 On a formal vote, two members were opposed. The Chairman advised that normally
he would put pressure on the carriers to abstain on the proposal but given time constraints,
he would declare the item defeated and refer it back to PSG.
Action:
PSG
AGENDA ITEM R41 – RESOLUTION REGARDING THE PASSENGER AGENCY
CONFERENCE STEERING GROUP
M/258 Mr. Lugo presented this item, explaining that the purpose of formalizing the
Passenger Agency Conference Steering Group in resolution was to ensure transparency
regarding the roles of the PSG and the Agency Administrator. The new resolution included a
Terms of Reference for the PSG, with a description of the function of the Agency
Administrator and a defined term in resolution 866 for the Steering Group, as shown in
Attachment ‘B’ of the paper. The PSG Terms of Reference were based on a historical
document formerly published in a previous manual (ISSSPM) and were nothing new.
M/259 The Chairman believed this would be a useful addition to the resolutions and would
put the PSG on a formal footing.
M/260 On a formal vote, the proposed new resolution shown at Attachment ‘A’ and definition
in Resolution 866 shown in Attachment ‘B’ were unanimously adopted for expedited
effectiveness of 1 January 2015.
AGENDA ITEM R42 - REVISION OF ANNUAL FEES FOR 2016 ONWARDS
M/261 Presenting this item, Mrs. Vité explained that this was a proposal for a revision of
annual fees from 2016 onwards, reminding Conference that the fees had been realigned in
2012 and frozen at the 2012 levels until 2016. IATA had looked at three different pricing
scenarios and compared the impact each would have over the next five years. The proposal
here was to adopt a 7% increase in the first year, to reflect that there had not been any
increase between 2012 and 2015, and a yearly index of 2% from 2017, with a review of the
index every 5 years against the cost of living in countries where IATA operational centres
were located.
M/262 The Chairman stated that the Agent representatives were opposed to any increase.
On a formal vote, Conference unanimously approved the revision of Agency Annual Fees to
apply in 2016 and the basis on which Agency Annual Fees would be revised on a yearly
basis from 2017 onwards.
AGENDA ITEM R43 - AGENCY CHANGES
M/263 Mrs. Vité presented this paper, which proposed changes to Resolution 818g to align
actions in respect of unnotified changes.
M/264 The Chairman informed Members that the Travel Agents had expressed concerns
about some of the changes, especially in relation to change of location or name due to
confidentiality issues. He therefore suggested adding ‘providing it can legally do so’ after the
new text proposed for sub-paragraph 10.8.2(a)(i), which he believed would have the agents’
support and that was the wording on which he would take the vote.
M/265 On a formal vote, Conference unanimously agreed to the revisions to Resolution
818g set out in Attachment ‘A’ of the paper, with the additional wording proposed by the
Chairman.
M/266 Later in the meeting, a Member asked to re-open discussion on this item to see if the
timeframe for providing the Notice of Change form to IATA could be extended to 15 days.
Mrs. Vité explained that paragraph 10.3 of resolution 818g needed to read in conjunction
with sub-paragraph 10.3.2, whereas paragraph 10.12.1 related to late notification of a
change.
M/267 The Chairman suggested that rather than handle this now, the Member could bring
the item back to PSG afterwards if needed. The member agreed with this suggestion.
AGENDA ITEM R44 – DEFINITION OF ‘SALES AT RISK’
M/268 Mrs. Vité presented this item, proposing to include new definitions for ‘Sales at Risk’
and ‘Days Sales at Risk’ in Resolution 866, taken from the best practice guidelines
contained in Resolution 800f. This was an issue in terms of reinstating an Agent following
default, where the Agent is required to furnish a Financial Security covering the sales at risk
although there was no definition in resolution on how IATA should calculate this amount.
M/269 A member raised the question that this proposal might be in contradiction to the
Local Financial Criteria in individual countries, as not every country had adopted the rule that
the sales at risk should be calculated on the three highest sales months in a 12 month
period. In his country, for example, the requirement to submit a bank guarantee was based
on the previous 12 months’ average, so that could not be changed in a default case to the 3
highest months’.
M/270 Another carrier had the same problem with this paper, voicing concern at having this
wording in the standard resolution that did not fit with local market practices and could
present a risk. The member could therefore not agree to the proposed changes.
M/271 The Chairman ascertained that whilst the previous member would be prepared to
abstain on the proposal, the second carrier was not in a position to do so. He therefore
advised that he would declare the item defeated, on the understanding that the carrier would
discuss the matter further with Mrs. Vité during the break to see if they could find a way to
abstain on the proposal.
M/272 Later in the meeting, Mrs. Vité advised that there had been a misunderstanding and
she clarified that the days’ sales at risk meant the number of days from the beginning of the
Agent’s Reporting Period to the Remittance Date in respect of the Report Period or Periods,
plus a margin of five days.
M/273 With this clarification, the member advised that she could abstain on the proposal.
The Chairman then took a formal vote on the item, which was adopted with two abstentions
including KE by name, for expedited effectiveness of 1 January 2015.
AGENDA ITEM R45 – RESOLUTION 854 – PCI DSS AMENDMENT
M/274 Mr. Lugo recalled that two years ago, Conference had amended Resolution 854 to
include general PCI DSS compliance effective 1 January 2014, but the resolution had failed
to set out what action would be taken in the case of an eTSP not being compliant. IATA had
worked on further revisions to the resolution, and shared the proposed changes with the
major GDSs to obtain their feedback. To the extent appropriate this feedback had been
incorporated in the document before them and he was pleased to report that IATA had now
reached agreement with the GDSs on the changes proposed. He believed the revised text
would be an overall strengthening and improvement on the eTSP agreement.
M/275 On a formal vote, Conference unanimously adopted the revisions to Resolution 854
shown at Attachment ‘A’ of the paper.
AGENDA ITEM R46 – TIMELINE FOR MAIL VOTES
M/276 Conference endorsed the proposal to shorten the timeline for Mail Votes from the
current 77 days to 63 days and approved the schedule for Mail Votes for 2015 based on the
revised timelines shown at Attachment ‘A’.
AGENDA ITEM R47 – STRENGTHENING RISK MANAGEMENT PROVISIONS FOR
TRAVEL AGENTS
M/277 Mrs. Vité explained that this item aimed at enhancing the current framework of the
programme to enable the Agency Administrator to take action much more quickly in
circumstances when there was clearly a high risk. Given the evolving nature of the market
including the move to etickets and the advent of ecommerce, the need to develop a more
refined and flexible approach to agency risk management was clear, as illustrated by the
recent AFT and Enterprise Travel defaults. The proposed resolution changes set out a step
change in Agency Risk Management by moving from risk management to risk prevention
through the strengthening of the provisions. The key changes proposed were two-fold.
Firstly to give the Agency Administrator the right to request an immediate accounting and
settlement of monies due and/or require an Agent to restrict its ticketing to credit card sales
only made against the BSP Airline’s merchant agreement under a prejudiced collection of
funds event. Secondly, airlines could notify the Agency Administrator of irregular activity of
an Agent, including violation of the reservation and ticketing rules, and the Agency
Administrator could act upon that information to withdraw ticketing authority. In terms of
restricting sales to credit card only, for the time being this would be manually controlled,
pending GDS capability, but would give IATA the ability to act within 48 hours instead of the
current 60 days.
M/278 The Chairman advised that whilst the Agents had concerns over part of the wording,
they did not object to the proposal.
M/279 Mr. Lugo highlighted that there was a necessary safeguard for the agents in both the
proposed provisions, which would generate an immediate request to the Travel Agency
Commissioner for review. This was an essential requirement, particularly under EU law.
M/280 Asked what was meant by ‘reasonable variations in sales levels’ under new
paragraph 1.8.4.1, Mrs. Vité explained that this would cover such aspects, for example, of an
Agent having higher sales for the summertime, or for Haj, and therefore seasonal variations
in sales would not be a trigger and the sales pattern of the Agent over the last 12 months
would be taken into consideration.
M/281 On a formal vote, Conference unanimously adopted the resolution amendments set
out in Attachment ‘A’ of the paper for expedited effectiveness of 1 January 2015.
AGENDA ITEM R48 – MINIMUM FINANCIAL SECURITY AMOUNT
M/282 Mrs. Vité reported that on occasion when IATA calculated the amount of the financial
security required, the result was an immaterial amount, for example USD100 or USD 2300,
and these immaterial amounts were a low risk. IATA was therefore proposing to establish a
minimum FS amount as set out in the attachment to the paper.
M/283 A member had a problem with the new 2.2.1.2(a) stating that an increase in the
financial security would only be requested if the increase was equal to or higher than USD
5,000. This would not fit into the local practice in her market and would mean that if the
amount was lower than USD 5,000, no financial security amount would be requested.
M/284 Mrs. Vité took this to mean that the new wording would be in conflict with the LFC in
that country that might contain minimum financial security requirements. Based on a review
of all 111 sets of LFC, she could not recall any requirement for a minimum financial security
amount of less than USD 5,000.
M/285 The Chairman asked the carrier to speak with IATA during the break.
M/286 Later in the meeting, Mrs. Vité confirmed that in Korea, no agent held a financial
security of less than KRW 100m, or USD 100k.
M/287 The member thanked Mrs. Vité for her assistance but was unable to vote in favour of
this item at Conference until further review with her Head Office.
M/288 The Chairman advised that the paper was properly on the agenda and he intended to
take a vote to finality. A formal vote revealed the carrier’s negative position on this item and
the Chairman therefore declared it defeated. He asked the member to advised IATA if there
was any change in their position after further discussion with her Head Office.
AGENDA ITEM R49 – TEMPLATE FOR LOCAL FINANCIAL CRITERIA
M/289 Presenting the item, Mr. Gilmartin explained that although Local Financial Criteria
were the bedrock of their financial rules, there were currently 111 different versions yet no
common format or standardisation in how these were presented. This proposal was
designed to address that by using the paragraph headings in Resolution 800f to put the
existing LFC into a common format. This would be purely an editorial exercise to transpose
the content into a standard structure. It was believed that this would be a great assistance to
anybody who looked at the LFC of any particular market, and a secondary benefit would be
that it would highlight any gaps between the criteria and Resolution 800f, which would be of
help to the APJCs. Responding to questions, Mr. Gilmartin advised that the initial work of
transposing the content would be undertaken by GVA Governance and Agency
Management teams.
M/290 With this understanding, Conference unanimously endorsed the adoption of the
proposed template for restructuring the Local Financial Criteria.
AGENDA ITEM R50 – AMENDMENT TO RESOLUTION 818g ATTACHMENT ‘A’
M/291 Conference unanimously adopted the resolution changes shown at Attachment ‘A’ to
the paper to remove the ten day earliest remittance date for markets on a monthly
remittance frequency, recognising that the current credit period of not less than 10 days had
been set previously due to technical limitations that no longer existed.
AGENDA ITEM R51 – APJC REPORT TO PACONF-PSG
M/292 Conference noted the report from APJC Hong Kong and accepted that the date for
sunsetting the local practice of deducting airlines’ bilateral BG from the IATA BG would be
01 April 2015.
AGENDA ITEM R52 – SALES AGENCY RULES – BANGLADESH
M/293 Mr. Prabaharan advised that this item had been submitted by APJC Bangladesh and,
similar to item R30, was seeking an exception for Bangladesh to extend the timeframe within
which to provide a Financial Security to 60 days.
M/294 On a formal vote, many negative votes were recorded and the Chairman declared
the item defeated.
AGENDA ITEM R53 – AGENCY PROGRAMME JOINT COUNCILS
M/295 A member presented this item, which aimed at clarifying participation of Observers in
APJC meetings to set out that they were allowed to participate and contribute to discussions.
If adopted, the member recommended that IATA should brief Chairmen and Secretaries of
APJC meetings accordingly to create awareness about Observer participation.
M/296 Whilst not having a problem with the proposal, another carrier felt that the status of
an Observer was that they should be there to observe, and they should only participate in
the discussions with the agreement of the chairman.
M/297 The Chairman proposed an amendment to the proposed new text to read ‘Observers
are allowed to participate with the permission of the Chairman and contribute in the
discussions’ and on a formal vote, Conference unanimously adopted the revised amended
text for expedited implementation of 1 January 2015.
M/298 At this point, the Chairman stated that that concluded the ‘R’ items. Due to time
constraints, he apologised if he had rushed through them, or if Members had felt
pressurised. He then turned to the RZ items, which were submissions from the APJCs for
changes to Local Financial Criteria. Again, he intended to package some items for the sake
of expediency.
AGENDA ITEM RZ1.2 – CHANGE TO LOCAL FINANCIAL CRITERIA – JORDAN
M/299 A member expressed concern about the value of the minimum Financial Security
amount for new agents, which had been increased from USD 60,000 to USD 100,000. The
Chairman agreed that it was a very high level of Financial Security and almost a barrier to
entry. Mr. Lugo concurred.
M/300 Conference agreed that the revised LFC should be returned to the APJC on the
understanding it would endorse the proposed changes subject to clarification and review of
the level of Financial Security for new agents.
Action:
APJC Jordan
AGENDA ITEM RZ1.3 – CHANGE TO LOCAL FINANCIAL CRITERIA – LEBANON
M/301 PAConf voiced similar concerns about the proposed changes to the LFC for Lebanon
and dealt with the item in the same manner as the paper from Jordan. The paper was
therefore agreed to by Conference but referred back to the APJC for review of the minimum
Financial Security amount.
Action:
APJC Lebanon
AGENDA ITEM RZ1.4 – CHANGE TO LOCAL FINANCIAL CRITERIA – MOROCCO
M/302 Conference adopted the proposed changes to the Local Financial Criteria for
Morocco effective 1 January 2015.
AGENDA ITEM RZ1.5 – CHANGE TO LOCAL FINANCIAL CRITERIA – SAUDI ARABIA
M/303 A member from the market advised that his carrier had raised reservations about the
proposed new criteria and was waiting for a response from the team. The item was
therefore withdrawn and sent back to the APJC for further deliberation.
AGENDA ITEM RZ2.1 – CHANGE TO LOCAL FINANCIAL CRITERIA – ECUADOR
AGENDA ITEM RZ2.2 – CHANGE TO LOCAL FINANCIAL CRITERIA – PERU
AGENDA ITEM RZ2.3 – CHANGE TO LOCAL FINANCIAL CRITERIA – ARGENTINA
AGENDA ITEM RZ2.4 – CHANGE TO LOCAL FINANCIAL CRITERIA – COLOMBIA
M/304 The Chairman took these items together as a package and Conference adopted the
proposed changes to Local Financial Criteria for these markets for implementation 1 January
2015, with the exception of the item for Colombia where the implementation date would be 1
December 2014.
AGENDA ITEM RZ3.1 – CHANGE TO LOCAL FINANCIAL CRITERIA – BANGLADESH
AGENDA ITEM RZ3.3 – CHANGE TO LOCAL FINANCIAL CRITERIA – SINGAPORE
M/305 The Chairman took these items together as a package and Conference unanimously
adopted the proposed changes to Local Financial Criteria for Bangladesh and Singapore
effective 1 January 2015.
AGENDA ITEM RZ3.2 – CHANGE TO LOCAL FINANCIAL CRITERIA – JAPAN
M/306 A member from the market advised that the agenda document did not reflect a
further amendment agreed in the APJC to the Local Financial Criteria and advised the paper
would therefore be withdrawn and resubmitted later as a Mail Vote.
AGENDA ITEM RZ4.1 – CHANGE TO LOCAL FINANCIAL CRITERIA – LITHUANIA
AGENDA ITEM RZ4.2 – CHANGE TO LOCAL FINANCIAL CRITERIA – POLAND
AGENDA ITEM RZ4.3 – CHANGE TO LOCAL FINANCIAL CRITERIA – RUSSIAN
FEDERATION
AGENDA ITEM RZ4.4 – CHANGE TO LOCAL FINANCIAL CRITERIA – SCANDINAVIA
AGENDA ITEM RZ4.5 – CHANGE TO LOCAL FINANCIAL CRITERIA – UKRAINE
AGENDA ITEM RZ4.6 – CHANGE TO LOCAL FINANCIAL CRITERIA – LATVIA
M/307 Conference voted on these items as a package and adopted the changes proposed
to Local Financial Criteria for the various markets with the following effectiveness dates:
Lithuania
Poland
Russia
Scandinavia
Ukraine
Latvia
1 October 2015
1 January 2015
1 January 2015
1 March 2015
1 January 2015
1 January 2016
AGENDA ITEM RZ4.7 – CHANGE TO LOCAL FINANCIAL CRITERIA – TURKEY
M/308 Noting that the changes to Local Financial Criteria had come forward unanimously
from APJC Turkey, the Chairman felt that the new minimum level of BG required for new
agents of USD 100,000 could be viewed as a barrier to entry. He asked the national carrier
if they could accept endorsement of the changes on the understanding that the level would
be taken back to the APJC for review.
M/309 The Member explained that the APJC had considered the issue but all the agents
and the airlines had decided not to remove the minimum BG level because of two large
default cases in 2013 in Turkey, which had both involved newly accredited agents operating
for less than a year and both applications had involved a very low level of collateral.
M/310 Mr. Lugo thanked the Member for their feedback and interesting summary of
discussions at the APJC, but nevertheless reiterated that IATA remained concerned that an
initial USD 100k deposit would be a barrier to new entrants. With regards to the recent
defaults there were tools being made available to the airlines to be properly engaged in
assessing the risk of airline appointed agents. He could therefore not support the change to
USD 100k.
M/311 The Chairman took a vote on the basis that the new LFC would be endorsed on the
understanding that it went back to the APJC for reconsideration of the USD 100k
requirement for new agents. Conference unanimously endorsed this proposal.
Action:
APJC Turkey
AGENDA ITEM RZ4.8 – CHANGE TO LOCAL FINANCIAL CRITERIA – BELGIUM/
LUXEMBOURG
AGENDA ITEM RZ4.9 – CHANGE TO LOCAL FINANCIAL CRITERIA – UNITED
KINGDOM
M/312 Taken as a package, Conference adopted the proposed changed to Local Financial
Criteria for Belgium/Luxembourg and United Kingdom for 1 January 2015 and 1 December
2014 effectiveness respectively.
AGENDA ITEM G1 – REPORT OF THE PASSENGER AGENCY CONFERENCE
STEERING GROUP (PSG)
AGENDA ITEM G1.1 – VACANCIES ON THE PSG
M/313 PAConf noted the report of the Steering Group and the work that the PSG had
undertaken in between Conferences to move things forward. The Chairman considered the
PSG to be a very active and important group.
M/314 The Chairman advised that the Steering Group currently had a vacancy for an Area 2
carrier because the former delegate from LX was sadly no longer with us. In these
circumstances he invited Mr. Cedric Suchet, Senior Director, Head of Treasury & Risk
Management from LX to take up the vacancy. Mr. Suchet confirmed he would be pleased to
accept the seat.
M/315 The Chairman then invited Mr. Terence Lim, Manager Distribution from SIA to take
up one of the Area 3 seats, which he too kindly accepted.
AGENDA ITEM G2 – REPORT OF THE PASSENGER AGENCY PROGRAMME GLOBAL
JOINT COUNCIL (PAPGJC)
M/316 Mrs. Patricia George, Chairman of the PAPGJC, presented this report, which showed
the detailed minutes of the March meeting, adding that there had been two further meetings,
one in September to review the PAConf agenda and another in San Diego prior to
Conference. All meetings had been well attended. There was an ongoing dialogue on
matters relating to the Agency Programme as well as on new industry products NDC and
New Gen ISS. Although not always in agreement, there had been healthy discussion at
PAPGJC of items on the PAConf agenda. She wanted to thank the airlines who participated
in the group on behalf of the industry as well as IATA for their support.
M/317 Conference noted the report.
AGENDA ITEMS - T1 THROUGH T4
M/318 Under the new agenda structure, these reports were now posted to the web site.
M/319 Conference noted the reports.
AGENDA ITEM T5 – OFFICE OF THE TRAVEL AGENCY COMMISSIONER
M/320
Conference agreed with the Chairman’s suggestion that as the TAC report
contained a lot of information that would need to be carefully considered, the report would be
referred to the PSG and the Steering Group would come back with any recommendations for
change to next year’s Conference.
Action
PSG
AGENDA ITEM C1 – ANY OTHER BUSINESS ITEMS
M/321 Conference agreed to take a number of Any Other Business items, as detailed
below. Where adopted, these items will be subject to Mail Vote post-conference for those
members not attending.
AGENDA ITEM C1.1 – CHANGE IN PRORATION METHODOLOGY – EXCEPTION FOR
INDIA
M/322 This item had been submitted by the LCAG-P India requesting an exception for India
in r818g, Attachment ‘A’, paragraph 1.10.4 in respect of the encashment of the bank
guarantee. An LCAG member explained the reason behind the request for the revised
proration, noting that this was similar to an earlier agenda item adopted for Singapore.
M/323 On a formal vote, the proposed amendments to r818g were unanimously adopted for
expedited effectiveness of 1 January 2015. The Chairman reminded members that this item
would be subject to Mail Vote post Conference for members not attending.
AGENDA ITEM C1.2 – FREQUENCY OF REMITTANCE BSP RWANDA
M/324 This item had been submitted by APJC Rwanda, following unanimous agreement of
the Council to move the market from monthly to fortnightly remittance effective 1 March
2015.
M/325 On a formal vote, Conference unanimously endorsed the implementation of
fortnightly remittance for BSP Rwanda from 1 March 2015 subject to Mail Vote post
Conference.
AGENDA ITEM C1.3 – CHANGE TO LOCAL FINANCIAL CRITERIA – BSP ETHIOPIA
M/326 This item had come onto the agenda from APJC Ethiopia, which had unanimously
approved changes to the Local Financial Criteria as set out on page 2 of the paper.
M/327 Conference unanimously adopted the changes to Local Financial Criteria for BSP
Ethiopia for 1 January 2015 effectiveness, subject to Mail Vote post Conference.
AGENDA ITEM C1.4 – CLARIFICATION OF BUSINESS HOLIDAYS – BSP JAPAN
M/328 A member presented this proposal from APJC-JP seeking to clarify the business
practice in Japan of the closure of banks and businesses from 29 December to 3 January.
The Chairman asked whether this amendment was really necessary, as there was already
provision in the rules saying that in case of bank holidays, remittance automatically rolled
over to the next working day. The member reported that payment and settlement had never
occurred during these days and now that Japan had migrated to the Singapore hub, it was
important to enshrine this practice in resolution so that those dates were blocked out when
the remittance calendar was produced.
M/329 On a formal vote, Conference adopted the proposed additional text for Japan only in
Resolution 818g Attachment ‘C’ effective 1 January 2015, subject to Mail Vote for members
not attending.
AGENDA ITEM C1.5 – CHANGE TO LOCAL FINANCIAL CRITERIA – BSP BULGARIA
M/330 This item had come onto the agenda from APJC Bulgaria, which had unanimously
approved changes to the Local Financial Criteria as set out in Attachment ‘A’ to the paper.
M/331 Conference unanimously adopted the changes to Local Financial Criteria for BSP
Bulgaria for 1 January effectiveness, subject to Mail Vote post Conference.
AGENDA ITEM C1.6 – CHANGE TO LOCAL FINANCIAL CRITERIA – BSP FINLAND
M/332 This proposal had been submitted by APJC Finland, which had unanimously
approved changes to the Local Financial Criteria as set out in Attachment ‘A’ of the paper.
M/333 Conference unanimously adopted the changes to Local Financial Criteria for BSP
Finland for 1 January effectiveness, subject to Mail Vote post Conference.
AGENDA ITEM C1.7 – CHANGE TO LOCAL FINANCIAL CRITERIA – BSP
KAZAKHSTAN
M/334 The Chairman drew attention to this item, which had been submitted as an onsite
item from APJC Kazakhstan, proposing changes to the Local Financial Criteria.
M/335 Conference adopted the proposed changes shown at Attachment ‘A’ of the paper for
1 January 2015 effectiveness, subject to Mail Vote post Conference for members not in
attendance.
AGENDA ITEM C2 – EFFECTIVENESS DATES OF RESOLUTIONS ADOPTED
M/336 Conference agreed on an expedited effectiveness of 1 January 2015 and a regular
effectiveness date of 1 June 2015.
AGENDA ITEM C3 – ELECTION OF CONFERENCE OFFICERS
M/337 Mr. Christopher Gilbey was re-elected Chairman of the Conference.
M/338 Mr. Johannes Ernst advised that he would be retiring from Lufthansa at the end of
August next year and this might therefore be his last Conference. The Chairman paid a
fulsome tribute to Mr. Ernst for his participation in PAConf over many years, not only as the
LH delegate but also as the Conference Vice Chairman. Whilst he hoped they would see
him at next year’s meeting, in the meantime he asked members for a show of appreciation
for his contribution to the industry over many years. A round of applause followed.
M/339 Mr. Armin Vencencie from Delta then accepted the vacant position of PAConf Vice
Chairman.
AGENDA ITEM C4 - DATE AND PLACE OF NEXT MEETING
M/340 This year, the Chairman felt that they had needed a full two days for Conference.
Under the way the schedule was worked out for WPS, it would continue to be impossible to
get two full days for this Conference because of all the other industry meetings taking place,
including COMP and the Passenger Services Conference, and then the meeting with the
travel agents and afterwards the PAConf. In his humble opinion, this conference adopted
more policy items than any of the others. A lot of the Services work went through the
committee structure where most of the problems were ironed out. This year, PAConf had
been scheduled at the rump of the week because only a few, if any, PAConf members
attended the WPS. It was also important that the Agency Administrator attend PAConf but
there were many conflicts on his time with WPS events.
M/341 The Chairman reported that the Agency Administrator had undertaken to review this
for next year. It might be possible that PAConf would no longer be associated with WPS in
the future. He asked a number of questions about delegates’ feelings about continuing to
hold PAConf as one of the events during the WPS. Only two carriers indicated a benefit in
having PAConf as part of WPS; three carriers wished for this arrangement to continue; many
carriers did not see any benefit in keeping the events together.
M/342 Mr. Popovich felt it was worthy of review, for both the Services and Agency
Conferences. One thing to bear in mind in having PAConf as part of WPS was the benefit of
not being stuck in GVA and having the ability to move the event around the globe. He was
open in terms of changing the current arrangement but felt members should be aware of the
implications if PAConf broke away. There was also a cost issue. If the conference was held
as part of WPS, the cost was taken care of by riding on the back of that event. If conference
broke away, that would incur a cost unless it was held at IATA and the only location with
sufficient space was the Geneva office.
M/343 The Chairman advised that, if it was decided to stick with WPS, he would insist that
two full days were allocated to PAConf. He had unfairly rushed discussion on some items at
this meeting. There had not been enough time for reflection on some papers as a result of
the very tight schedule. This Conference would not meet during WPS in the future unless
two full days were allocated to it, otherwise he would not be chairing it. That was an
indication of how strongly he felt about the issue.
M/344 Speaking for the JPSC, Mrs. George added that the Services Conference had had an
extremely difficult agenda to get through in 1.5 days and it had been difficult to get any
support from the logistics staff in terms of registration, photocopying, problems with the
meeting room in terms of acoustics and lighting. She did not see any advantage for either
the Services Conferences or COMP being part of WPS. On her side, she would be very
happy to hold these events in Geneva.
M/345 A member voiced regret at seeing such a low turnout at this Conference from other
carriers. Perhaps there were locations that were easier for carriers to reach that would
encourage a higher attendance, and he asked that that aspect be taken into consideration
when looking at future locations.
M/346 Mr. Popovich agreed that it was critical to get active participation in the Conference,
that was a clear requirement. He asked whether there were any other business
requirements that needed to be taken into consideration, apart from two full days for
conference plus time for PSG and PAPGJC.
M/347 After further discussion, the Chairman asked members to reflect on this and provide
input into a survey that would be sent to them after the meeting.
M/348 The Chairman then turned to an action item discussed the previous day in terms of
the sort of additional information, or tools, carriers would find useful in respect of risk
management. He feared that just by putting this in the minutes, it could be overlooked.
Therefore Mr. Popovich would be writing to members after Conference, asking for feedback
in terms of the reports, modules and BSPlink by 15 November. This information would be
reviewed by IATA and Legal during a special PSG conference call, probably in the last week
of November, to review the viability of the suggestions received.
M/349 The next full PSG meeting would usually be scheduled for the following March,
however there were a number of important issues to address and he therefore asked IATA
to look into the possibility of scheduling it earlier, in February.
CLOSING REMARKS
M/350 In closing, the Chairman apologized if any members had felt things had been rushed,
but he had feared they would have difficulty in finishing on time.
M/351 He felt it has been a good conference with a mix of policy and housekeeping items,
several changes in remittance frequencies, major changes to the Prejudiced Collection of
Funds provision following the AFT episode. They had also handled things that would help
the Agency Administrator, and adopted the minor error policy which would hopefully reduce
the costs of the TAC programme by reducing the number of cases.
M/352 He thanked members for their participation and attendance, and thanked the IATA
staff for their valued support.
M/353 The Chairman then closed the meeting at 16.10 hours on Friday 17 October 2014.