Worrying developments from Spain with news that online travel agency TerminalA has lost its IATA licence in a row over payments through the Billing and Settlement Plan (BSP).
The company is currently only selling air tickets to low cost airlines such as EasyJet after also being removed from the GDS.
The BSP acts as a clearing house for payments between intermediaries and suppliers.
Reports in the Spanish media suggest TerminalA owes the BSP - and, by extension, IATA - around Euro 30 million. HostelTur says TerminalA owes Euro 2.5 million is owed to Iberia, Euro 1.5 million to Spanair and Euro 900,000 to Air Europa.
TerminalA is one of the biggest OTAs in Spain - behind Rumbo and eDreams - and commands between 5% and 10% market share.
It has regional versions of the site for users in France, Portugal, Belgium, Italy, Austria, Switzerland, Holland, Denmark, Sweden, Finlanbd, Norway, Russia, Poland, Czech Republic, Hungary, Ireland, UK and the US.
Falling foul of IATA in such a dramatic way has led some to question how Terminala will renegotiate its way back into the system.
Airlines have apparently demanded additional financial guarantees from Terminala, although there is growing confusion as this normally happens by individual carriers rather than through an across-the-board direective by IATA.
Nevertheless, TerminalA has grown quickly in Spain and in other markets around Europe.
It has also entered a number of aggressive price wars with other OTAs - a strategy fraught with risk as most agencies buy seats at the same price.
Although well regarded for technology combining GDS fares and feeds from LCCs, TerminalA has not tapped into the ancillary market which some feel is needed to make the middle ground OTAs push ahead financially.
A TerminalA spokeswoman says:
TerminalA is a travel agency with a valid license to maintain its activities, in spite of temporarily having its IATA license revoked.
In the current difficult global economic situation, both IATA and a number of airlines have, in view of the growing size and activity of TerminalA, requested additional important bank guarantees were not acceptable for the company.
TerminalA is currently negotiating a solution and has in the meantime reached agreements with different fulfillers to allow TerminalA to maintain its normal business activity such as is the usual practice in the industry.
TerminalA customers around Europe in all 19 markets in which TerminalA is currently active continue to buy their flight tickets through the websites and all TerminalA's main technical and marketing partners are giving full support to the company.
"TerminalA is a travel agency with a valid license to maintain its activities, in spite of temporarily having its IATA license revoked.
In the current difficult global economic situation, both IATA and a number of airlines have, in view of the growing size and activity of TerminalA, requested additional important bank guarantees [which] were not acceptable for the company.
TerminalA is currently negotiating a solution and has in the meantime reached agreements with different fulfillers to allow TerminalA to maintain its normal business activity such as is the usual practice in the industry.
TerminalA customers around Europe in all 19 markets in which TerminalA is currently active continue to buy their flight tickets through the websites and all TerminalA's main technical and marketing partners are giving full support to the company."
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