No Small Task

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The Association of Southern African Travel Agents recently held its annual conference in Dubai, where some of the most pertinent issues affecting the industry were debated, with Chief Executive Officer Otto de Vries driving that debate. De Vries sat down with editor Dylan Rogers on his return, to report back on what was discussed.

Otto de Vries has three main issues that he and his organisation are grappling with.

Two are IATA-related – the imminent roll-out of the New Distribution Capability (NDC) and the issue of finalising, within ASATA’s Airline Passenger Joint Council (APJC), the financial criteria for the market’s  default insurance programme that is specifically tailored to IATA.

The third issue is that of billbacks, which seems to be raising its head on a more regular basis, with some South African hotel groups and travel management companies expressing a desire to find an alternative to what some industry professionals believe is an archaic system.

“There’s going to be big push on behalf of all our members and partners in the association to find out how we, as an industry, can start to better understand everybody’s issues and concerns regarding billbacks,” says De Vries. “Effectively, how we can move away from it, because in any maturing business model this has to be identified as a less than favourable business process.”

For the uninformed, NDC “is an IATA-led industry initiative to develop an XML-based language standard for communications between airlines and travel agents.” Very simply, it refers to what information agents have access to on their screens, when searching flight availability. IATA, though, have encountered some resistance, most notably from some of the big Global Distribution System (GDS) companies.

“Nobody thinks that it’s a bad idea to look at a messaging standard with a broader scope of information and product offering, as it could add value for the travel agent,” says De Vries. “What we are worried about is the way that IATA is going about the process. They haven’t considered all the implications.”

Issue two listed above, it is hoped, will be of benefit to smaller South African travel agencies, easing their financial burden and reducing their risk.

“The outcome is to ensure that both the airline and the agency communities are comfortable that we have set what we believe to be the correct and appropriate financial criteria for membership to IATA – specifically with regards to IATA managing its risk around possible defaults or failures of agents,” says De Vries.

“A small agency could easily be presented with a need to deliver a R1 million-plus guarantee. We are developing criteria for smaller agencies who would like to continue to operate as IATA-accredited, but rather than have to pay a guarantee, will participate in a default insurance programme which will see them charging their customers a minimal fee per ticket issued, and that payment will go towards the fund, which will then protect the settlement to the airlines.”

With all of these issues in mind, I’m curious as to whether De Vries believes his industry is in a healthier state than it was say 10 to 15 years ago?

“I think it is,” says De Vries. “But there are a lot of things looming. One of the real concerns we’re watching closely is the next level of consolidation. Not total mergers, but rather loose networks of large consortiums being pulled together from a buying perspective.”

Anti-competitive?

“This is what we need to look out for. It has implications for the entire supply chain. There is a concern that everything is being driven around the cheapest price, when it should be only part of a much bigger offering in terms of the value proposition. I don’t want to diminish what I believe is a very strong value proposition that all our TMCs are offering to their customers. But it is an area of concern, as you need to look out for the little guys as well. You can’t have the big guys bulldozing them.”

Safe to say that De Vries has more than enough to keep him busy and out of trouble.

Wishing him well, and that ASATA can continue to make changes and improvements that will benefit the industry.

No small task.

Dylan Rogers