AFTA update
From AFTA’s chief executive, Jayson Westbury
AN IATA Agent Debit Memo (ADM) is an outdated process of a legacy billing system that is ripe for change - and change with a seismic shift is coming. If the IATA BSP was a plate tectonics (which is a scientific theory describing the large-scale motion of seven large plates and the movements of a larger number of smaller plates of the Earth’s lithosphere) then we are at the cusp of an earthquake when it comes to the BPS and ADMs.
Dramatic as this may seem, I use this analogy to make the point. A big change is coming and it’s about time. Having just returned from the IATA ADM Workshop in Singapore, where around 100 airlines, agents, GDS and IATA got into a room for two days to work on the challenges faced by all concerned, I am hopeful that, as a force for good, the collective of all parties may be able to reduce or, if one was to dream for just a moment, eradicate ADMs.
Globally in 2017, ADMs accounted for USD$442 million and there were 2.6 million on issue with an average value of USD$162. This average is somewhat without meaning as there have been ADMs for tens of thousands, and ADMs for a few dollars. In fact, in some cases the penalty fee applied by the airline is 10 times more than the amount to be collected. There is a serious problem with that and perhaps even a question in Australia at law with regards to our Australian Consumer Law, something that AFTA is exploring. One could say the collection of ADMs is an industry all of its own.
No doubt some airlines are trigger-happy when it comes to ADMs and others are embracing the new best practice and protocols being developed and introduced by the IATA ADM working group. In the end, there will need to be further changes to the resolution 850m (the ADM Reso) in order to enshrine some of these best practices and protocols and the global agency community will continue to advocate for this. The working group has in fact had some success in this regard and from the dialogue at the meeting last week there continues to be constructive concepts and ideas being developed to reduce ADMs, improve airline and GDS processes, put a focus on getting pricing right in the first place and educate and communicate airline ADM policies so that the agency community has a clear understanding of what the rules are.
It has been suggested that in an NDC environment the ADM will not apply. We can all only hope that the earthquake comes quickly and we can move on to a new billing environment, which is more efficient, fit for purpose, future looking and without these ridiculous antiquated processes that frustrate the relationship and perhaps reduce sales for the parties in dispute.