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Travel Agents and IATA

Open letter from Mexico to travel agents: Run away from IATA!

Oscar Amérigo, Elisabeth Madsrid and Luis Ochoa  Feb 26, 2009

For the last several years, the messiah of Miami has manipulated IATA [International Air Transport Association]. All Latin American countries have been tyrannized by arrogance and bad treatment. Laws and rules that airlines made for their commercial relationship with travel agencies are not respected and obeyed by IATA employees, and they accommodate such rules and laws to their own needs, according to each region.

A few decades ago, in order to be a prestigious travel agency you had to obtain your IATA permission, it was a priority to have such permit, which meant having the great honor to issue airline tickets. (In Mexico, at the beginning, the permission was only for international tickets, and then at the end of the 20th century, IATA included domestic tickets.

It was a must, a fundamental issue of essential quality to all of those wanting to do a professional job.

Those who didn´t do the "IATA authorization" were considered inferior (or agency without prestige) and were considered bad and risky. Paying on time was fundamental to preserve such quality. Perhaps the only reason you would lose an IATA authorization if you didn’t do so. The rest was easy to overcome.

Then one day the rules changed. Rules that were made by the worldwide airline officials to generate a balance in their relationship with travel agencies were broken.

Justice is a thing of the past in the organization. What is IATA to travel agencies these days? A group of arrogant employees that do not listen to anyone and to any reason, fitting the rules to their own convenience and act in a partial way with travel agencies, with a double standard moral, since what it is accepted from some agencies, it is not from others and if you is not subjugate to their principles, you end up losing the ticketing.

That is enough! Some travel agents said that some time ago, and others are following them these days.

To many people’s surprise, back in 1994 Mexico had more than 5,200 credited agencies. In the last 15 years, that number has been decreasing, and it has come to a point that up to this year of 2009, there are left only 1,500 travel agencies left. Perhaps less, according to IATA numbers, including branches and in-plants. The industry thought the decline in number was normal due to the cut down in commissions, the lack of incentives and for the low income, etc.

But that was not the case. We can now see a huge amount of travel agencies, more than 1,300 that are working without an IATA permit. They say they got tired of being abused, of debit memos, fines, unjustified charges and the lack of availability and indolence.

And yes, let’s thank consolidators (ticketing wholesalers) that arrived in Mexico, as they have cured the headache of those travel agencies for that miserable 1 percent. Consolidators pay more, do not send debit memos and do not threaten travel agents. They manage commercially because they want to do business. Now confirmed data reveals that between the two major consolidators (wholesalers) in Mexico, more than 1,600 registered agencies are buying directly from them. And now with e-tickets becoming the standard, no one knows who is issuing tickets.

So, what is the benefit for travel agencies being affiliated with IATA these days? Nothing. The reputation of an agency comes from the quality of its service. Airlines do not even recognize the “IATA card” as an official ID anymore.

It is worth mentioning some cases that are hurting travel agencies nowadays. Like the one that received an unsuitable debit memo and refused to pay, so IATA took away the agency’s ticketing privilege.

And like in many other agencies that received a letter from Miami, notifying them that they have “been selected” to avoid the international bail but asked for an accounting balance, only to be notified later that such balance was no good and ended up removing their ticketing privileges. Even worse, if the balance was accurate, although IATA would not admit so, IATA would still remove ticketing privilege arguing they did not receive such balance on time.

Have any of you, dear travel agents, received such letter canceling your ticketing? IATA continues to give orders and pretend to keep bully you. Do you know what really is IATA? It is an association of airlines supported by travel agencies.

It has been IATA’s strategy for a few years now to charge travel agencies for everything. When IATA sends you an audit (as if you requested it), when you need to make a change, when IATA checks something on your invoice (even though the fault is IATA’s). IATA charges you for revisions, then charges you for an inspection and soon it will charge you even for phone calls.

Above all, IATA charges for an annual fee like as a foreign agency, not causing IVA (Tax), and give receipts only when an agency requests it. That is called fiscal fraud! Remember that it is not deductible if the IVA is not broken down. IATA already had problems in the past with this issue, and as we can see, IATA will have it again.

IATA should have acted like a facilitator in the business relationship between airlines and travel agencies, but instead, they acted improperly and inefficiently.

There is also another case regarding the bail, as now the agencies are considered half national, half international, IATA charges an annual fee for both. IATA reprimands travel agents and even threatens to remove ticketing privileges (better known as “Switch off”). But the bail still is immovable; IATA demands it and agencies have to pay it. Why does the national bail depend on others and not on the IATA office? In other words, IATA now wants financial statements and double bails.

IATA days are almost over. It is just a matter of time.

Open letter from Mexico to travel agents:  Run away from IATA!

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