The Kenya Association of Travel Agents (KATA) has joined global industry bodies in opposing a decision by the International Air Transport Association (IATA) to impose standardised Billing and Settlement Plan (BSP) remittance periods across all markets.
IATA, through a recent member vote, adopted a resolution to introduce uniform global remittance terms by mid-2026, eliminating the long-standing flexibility for local market determination under joint governance mechanisms between airlines and agents.
The BSP, which presently covers more than 207 countries and over 400 airlines, is used to track and manage air ticket sales and the associated financial transactions. It facilitates and simplifies financial transactions between IATA-accredited Passenger Sales Agents and BSP airlines, while also helping improve financial control and efficiency.
IATA said the changes are intended to harmonise settlement processes across markets and strengthen the efficiency and security of airline revenue collection under the BSP framework.
KATA, however, warned that the move risks destabilising Kenya’s travel trade, raising ticket prices and pushing local agencies out of business.
The association argues that the decision dismantles long-standing locally agreed arrangements that reflect domestic financial systems, payment behaviour and commercial realities in markets such as Kenya.
“Our local market is very unique. Kenya is still largely a credit market, with a bigger portion of our travel comprising corporate and government travel. For both corporate and government travel, you are never paid upfront or immediately. We still issue tickets on credit and then get paid later,” says KATA chief executive officer Nicanor Sabula.
Remitting funds
According to Mr Sabula, delayed payments are a structural feature of the Kenyan market, with settlement periods often stretching far beyond a month.
To accommodate these realities, Kenya’s BSP remittance cycles have historically been determined locally through the Agency Programme Joint Council (APJC), a platform that brings together airlines and travel agents to jointly agree on settlement terms.
“Currently, we remit twice a month.” Mr Sabula says.
Under the BSP, IATA-accredited agents centrally remit funds to IATA, which then distributes them to participating airlines according to their share of ticket sales.
Critics said shortening and strictly standardising remittance periods would require agents to pre-finance customer payments to a greater extent and advance money to airlines before (corporate) clients have paid in full.
KATA said the move towards global standardisation gives IATA the power to unilaterally alter settlement cycles, including shifting markets such as Kenya to weekly remittance, a model already applied in parts of Europe and other Western markets.
“In those markets, they don’t have such a huge credit market for travel. People pay via credit cards or cash, so it’s easier to turn around the money,” Mr Sabula said. “Those are local conditions that need to be factored in.”
Mr Sabula adds that forcing agents to settle weekly would significantly increase their reliance on bank financing. “If the travel agent has to cover that credit, it means they must go to banks for overdraft facilities, and that is costly. It makes the cost of doing business high,” he says.
KATA maintains that the current remittance framework, although sometimes tight, has supported the sustainability of agencies by aligning settlement timelines with corporate and government payment cycles.
“Even though it’s a bit pressed, remitting twice a month means we are able to access credit within that period and settle, knowing that most corporates and government pay monthly. The credit taken from banks is for a shorter period, so it’s easier to cover,” Mr Sabula says.
KATA fears
He says a shift to weekly remittance would raise capital requirements across the industry. “This will challenge both big and small agencies because the capital demand will be much higher. The risk is that we are going to see a lot of travel agents pushed out of business.”
Beyond business closures, KATA fears the policy could shrink Kenya’s travel market by tilting competition in favour of large international travel sellers with access to cheaper offshore capital.
“We are likely to lose business to international travel sellers who can access capital elsewhere and then service the local market. They will be able to price their tickets lower than our local players, squeezing Kenyan agents out of the ticket market,” Mr Sabula says.
KATA also warned of a likely rise in ticket prices for consumers as higher financing costs are passed down the value chain.
“If the cost of accessing credit goes up, somebody has to cover that cost, and that is likely to be passed on to the consumer,” Mr Sabula says.
On governance, KATA criticised what it described as inadequate consultation during the IATA mail-vote process.
“We have not seen the engagement of the travel agency community, which is unacceptable. IATA regulations call for a participatory approach where agents and airlines sit and agree. To unilaterally make these changes completely skews the relationship. IATA is almost taking a monopoly position on a very significant decision that could affect the market,” Mr Sabula says.
The association has aligned itself with concerns raised by the United Federation of Travel Agents’ Associations (UFTAA), calling for a reconsideration of the policy and a return to consultative governance.
“We are disappointed by IATA’s unilateral decision to change a system that has worked well and served the Kenyan market effectively for many years. Any global intervention that overlooks local market conditions risks destabilising the travel distribution ecosystem,” says KATA chairman Dr Joseph Kithitu.
