The second wave of COVID-19 has hit the aviation industry “like a tsunami,” travel agents are among the most affected in India. Domestic flights downsized, foreign airlines either stopped operations or banned passengers from India.
Financial security renewal of IATA accredited travel agents are now scheduled for 30th June 2021. Since the IFCO TOKIO General insurance company withdrew their insurance guarantees for travel agents, the IAAI director board had an intensive and extensive study on IATA accreditation services – Standard (with and without Easy Pay) Go Lite and Global (multi-country) regarding its application, facilities, and benefits.
In the absence of an insurance guarantee, agents are forced to provide a Bank guarantee or Joint Bank guarantee under Travel Associations, which are exceedingly expensive than that of the existing insurance guarantee system. IATA accreditation is a symbol or trademark of the Industry standing of a Travel Agency, recognized worldwide despite volume or revenue.
Through virtual meetings, the IAAI director board has considered the various aspects that constrain agents’ survival. IATA Standard Accreditation is a “white elephant” in the present economic turmoil and frustration due to the pandemic situation for most travel agencies as they are SMEs. A travel agent has to annually spend around USD 783 for IATA Standard accreditation and using BSP link facilities in addition to the financial guarantee and other expenses.
In the present scenario, this expenditure may not be a viable business solution for most of the agents in India, and foreseeing that the present pandemic situation may continue much longer and delay in the redemption of international flights may take 2 years or more to reach the level of the pre-pandemic situation, IAAI National committee would like to suggest IATA Accredited Travel agents to convert their accreditations to “GoLite” accreditation. Even though “GoLite” accreditation curtails credit facilities, it drastically reduces overall costs and empowers IATA Accredited Agencies to survive this unprecedented difficult situation.
Since there is no capping, agents can tie up with the airlines and pay the advance deposit through IATA ‘EasyPay valet’. Also, Agents can use a Credit card facility with PCI DSS Compliance Certification through IATA-approved providers. The benefit of GoLite accreditation is that agents are free from providing Financial Security Financial Statements and Annual Financial Review to IATA/BSP. When the present pandemic situation and economic turmoil is over, then agents may change their accreditation to a Standard accreditation model according to the requirements of their business models. In a scenario wherein the regulatory order of DGCA on 5th March 2010 mandates remuneration or commission on tickets to travel agents are not yet implemented or enforced in our country, the subsistence of IATA Accredited Travel Agents is a difficult proposition and agents have no alternate than taking appropriate measures for their own survival.
Uncertainty continues and cannot rule out the possibility of a third wave. Until the majority of the populations vaccinated, the travel & tourism industry may likely remain in the dumps. Considering the above factors, a shift in the economic strategy is vital for the survival of the majority of travel agents in India. Anticipating this situation may continue for quite a long, GoLite accreditation shall be suitable for average Indian travel agents in the present scenario. Go Lite accreditation is helpful to the Indian market conditions for the time being unless and until agents opt for extensive /network marketing. Unfortunately, either global councils of IATA Travel Agents or any national or international associations ever discussed or demanded getting exemptions or support to the industry in any manner. The travel industry is in a critical stage, and many agents are struggling for survival, and being the recovery from the COVID-19 crisis is complex and a difficult task for them. In this context, we at IAAI feel that the need of the hour is nothing but coordinated efforts and coordination of all stakeholders in the Travel, Tourism, and Aviation industry for survival as well as for a better future.
