IATA issues new directive for ticket payment

Travel agents will be forced to remit money from ticket sales after 15 days, in a moved geared towards improve cash flow for airlines.

This follows changes to the payment cycle by the International Air Transport Association (IATA) from 30 days previously in response to claims by airlines that cash from ticket sales was not reflecting fast enough.

“Consequently, in order to protect the industry from a crisis arising from potential massive defaults, existing credit terms for air tickets will be discarded in favour of cash payments,” a statement from the Kenya Association of Travel Agents (KATA) reads.

The order is set to take effect on September 1.

IATA says the move will also cushion the sector from potential losses from defaulters.

KATA has urged all those making air travel bookings to take into account the changes and plan accordingly to make payments.

“This is therefore to advice all consumers of air travel services especially corporate entities and government departments to take note of these new changes and ensure that they have made necessary adjustments in their payment plans to conform to the new requirements” KATA said.

Airlines globally have complained of having money blocked in different countries. IATA estimates that its members’ blocked funds globally is in excess of $5 billion (Sh505 billion).

Kenya airways for instance estimates that it has funds in excess of Sh2.5 billion  blocked in African countries further straining its cash flow.