UNIT 1 INDUSTRY REGULATIONS

1.3 COUNTRY LAWS

*Trade and labour laws - governing the activities of business enterprises. Generally provide for the official registration of the agency.
- Labour and antitrust laws - regulate working conditions, minimum wages, fair business practice and competition.
*Special regulations - relating to the performance of travel agency activities. to protect the travelling public.
- Licence to operate requires: -agent have to be registered in the country of operation, -prove its financial health and solvency, -owners, directors and officers must meet defined experience and professional qualifications, -premises must be suitable for the performance of travel agency activities, -provide bank guarantee or bond to the competent government authority.
-Licence A: covering all travel agency functions, world-wide, incl. production and sale of tour arrangements.
-Licence B: same as A, but only for domestic arrangements.
-Licence C: covering only certain specified functions, e.g. making reservations, issuing tickets.
Licence may be withdrawn or suspended if -the conditions of granting no longer fulfilled, -malpractice o fraud, - bankruptcy.

1.4 IATA RESOLUTIONS

Resolution - Rules and procedures which are subject to local government approval.

Resolution 814 - "Passenger Sales Agency Rule" and Resolution 824 - "Passenger Sales Agency Agreement".

-Application and accreditation procedures: written application to the local IATA Agency Services Manager (ASM), head of the Agency Services Office (ASO). ASM authorise or approve the application. Qualifications checked: -financial record and standing, -staff qualifications and experience, -security facilities, -identification and accessibility of premises. Rejected applicant can request the ASM to reconsider or that it be reviewed by the Travel Agency Commissioner (TAC). Accredited applicants is assigned an individual numeric code (80 -country, 2 - IATA area, 1234 0 - agency code).
-The IATA Passenger Sales Agency Agreement and Appointment by Individual IATA Member Airlines: Accredited agent must sign the agreement (resolution 824). Agreement only effective between agent and airline after airline appointed him by a Certificate of Appointment, or a Statement of General Concurrence deposited with the IATA Agency Administrator. Airline then provides agent with CIP. Agent authorised to represent any IATA airline which appoints him.
-Changes of ownership, legal status, location and name: Any changes must be notified to IATA well in advance (resolution 814). Change must be approved and a new Sales Agency Agreement executed.
-Review of agents: periodically in order to ensure that they continue to qualify. Financial review - "cash basis" -Sales reports, billings, remittances and collections; defaults:

1. Procedure where BSP is NOT in operation: Reporting and remittance 1-2 times a month. The sales report with full remittance must be submitted to the carrier concerned within 15 days following the end of the reporting period.
*Irregularities - the agent who fails to submit a sales report with full remittance will receive a "notice of irregularity".
*Default - if the agent then fails to submit the PSR with full remittance within 10 days after the remittance date he will be declared "in default" with respect to all approved locations. 4 instances of irregularity within 12 consecutive months also "in default", but only location concerned.
*Consequences of the default - Agent placed on a "cash basis". Airline will discontinue credit and withdraw all traffic docs. - Airline will demand an immediate accounting and settlement of all amounts owned by the agent. - Withhold payment of commission. - Withhold granting of reduced fare transportation.
*Dishonoured cheques - if an agents cheque is not honoured the carrier concerned will notify the agent and demand immediate payment. If no payment agent will be declared "in default".

2. Procedure where BSP operates: Agent use neutral standard docs. Reporting of sales is made on a single sales transmittal to one central point - The Clearing Bank or Processing Centre. Agent is billed for all transactions recorded on the sales transmittal and makes one payment through the Clearing bank.
*Reporting and remittance - one to four times a month, determined by the BSP Committee.
*Irregularity and default - Overdue sales transmittals: the agt who fails to submit his sales transmittal to the Clearing Bank/Processing Centre by the submission date will receive a "notice of overdue sales transmittal" the location concerned. If not received in time for the last billing of the remittance period a "notice of irregularity" will be sent. 4 instances of irregularity within any 12 consecutive months and the agt will be declared "in default" with respect to all approved locations.
Overdue remittance: the Clearing Bank does not receive remittance by remittance date. Plan Management is informed and a "notice of irregularity" is sent. If no settlement within 10 days the agent will be declared "in default" (all locations).
*Consequences of default - P.M. will withdraw all CIP´s and traffic docs. Business on "cash basis". Withhold of commissions and reduced fare transportation.
*Dishonoured checks - Clearing Bank will demand immediate payment. If not agent "in default".

Review by the Travel Agency Commissioner - Agents guilty of manipulation of traffic docs or who fails to maintain security standards will be reviewed under the provisions of Resolution 814e.

Commissions - Commission is payable on the amount of the fare excluding any charges for excess weight, taxes and other charges. No commission is payable for transportation sold to a government at government discount or where payment is partly/wholly made directly to the carrier. Resolution 016a "Commission for IATA agents".

Agency fees (Resolution 814) - Non-refundable application fees. - Entry fees on applications for IATA accreditation. - Application fees for approval of changes. - Annual agency fees. Invoice sent to head office of every agent not later than 1st November. Failure to pay - termination of the agents IATA approval.

Other IATA resolutions: 049 "Changes in fares", 204c "Free or reduced fares for TC", 725b "MCO", 727 "Tickets - alteration", 800a "Application from", 814d "Travel agency commissioner", 822 "code".

BSP regulations: Outline of BSP - governed by Resolution 850. BSP can be set up in an area of one or more countries. US and Canada - ARC (Airlines Reporting Corporation). Also non IATA airlines can participate. Operation - standard IATA tickets for all airlines. Agent completes a sales transmittal and settles to Processing Centre/Clearing bank which transmits the docs and moneys to the airlines concerned.
Standard Traffic Documents (STD) and Standard Administration Forms (SAF) allocated to all agents. Validated upon issuance or by using a ticket imprinter. Sales, refunds etc. reported through a sales transmittal. Processing centre prepares billings and sends them to agents and BSP airlines. Agents pay their invoice to the Clearing Bank which settles with the airlines. Airline controls and monitor agents ticket sales.
The administration of all BSPs is controlled by the Plan Management in IATA´s Geneva office.

Accountable transactions - ticketissue, refunds, ADM, ACM
BSP airline - airline participating in BSP.
BSP committee (BSPC) - composed of representatives of Members established in accordance with the Provisions for the Conduct of the IATA Traffic conferences - responsibilities to Standard bank plans.
Billing date - the date when the Processing Centre bills the agents.
Billing period - time span for which a billing is rendered.
Clearing Bank - bank appointed to receive remittances from agents and settle the moneys to the airlines.
Plan Management - department of IATA responsible to the Agency Administrator for BSP development.
Processing Centre - appointed to receive sales transmittals from agents, process data, render billings to agents and to notify the Clearing Bank and the BSP ailines of the amounts due.
Remittance date - lates date for agents remittance to reach the Clearing Bank
Remittance period - time span between two remittance dates.
Reporting date - time span covered by a sales transmittal.
Sales transmittal - the list for a reporting period of STD, together with audit coupons.
Steering Panel of BSP - panel with instructions from the BSPC supervise the BSP.
Submission date - the day when the sales transmittal must be at the Processing Centre.

1.5 BY-LAWS OF NATIONAL AGENTS ASSOCIATIONS

Objects: - Promote and develop the general interests of all members of the association and their relations. - Establish and maintain a "Code of Conduct". - Discourage unfair competition. - Promote friendly relations.

Membership requirements: - Suitable premises. - Qualified staff. - Sound financial position. - Good business reputation of the directors. - Acceptable trading name.

Obligations of members: - "Code of Conduct" - conduct between agents and the public / agents who are members of the association / agents and other industry principals. Also covers standard of service, advertising standards and accounting procedures. - "Articles of association" - keeping books of accounts / inspection of premises by officials of the association / notification of changes / sales of travel arrangements organised by agents who are not members / termination of membership, penalties.

UNIT 2 OFFICE PROCEDURES

2.3 OFFICE PLANNING

Office location - Central, near hotels, clubs, restaurants or in a shopping centre of a neighbourhood. Space and function - The travel agency image should impart confidence, capability and professionalism. Support functions - Business house/Commercial accounts by phone. Direct client department for individuals. Accounting section, conference room, ticketing department located centrally but not seen by the public eye.

2.4 ACCOUNTING

Correct trial balance should be established at the end of every month. Proper book-keeping will enable the agency to: - maintain records properly / rectify errors quickly / assess trading results accurately / avoid unnecessary overheads / help assess future office profitability. Company books audited annually by auditors.

2.5 BUDGET

Prepared at the start of the year listing the estimated revenue from various sources and the likely expenditure. Should be used during the year as a standard by which to measure actual performance. A Cash flow budget should also be prepared - list the cash inflows and outflows in order to forecast when the agency may need additional financing.

2.6 COST CONTROL

From trial balance agency produce a monthly income and expenditure account. Shows if agency has made a profit or loss for the year to date. Essential if management is to have proper control and ensure a profit.

2.7 CLIENT ACCOUNT CONTROL

To avoid cash flow problems as many clients as possible should pay cash. If not possible -decide length of credit if any, -check clients credit worthiness. At the end of each month check list of debtors, current/1 month /2 months/over 2 months overdue. If invoices not paid agent can loose all profit of sale. Sale - 1000, Commission - 90, Due to airline - 910, Net profit - 10 (1% of sale), Interest - 12% /year (1% a month). Credit allowed for 90 days, interest paid by agent 3% of 910 = 27.30. Loss of 17.30!! (interest charges - net profit).

2.8 TICKET STOCK CONTROL

-Prevents theft which could mean a substantial loss if stolen tickets were used.
-Easy preparation of sales returns if tickets are issued in correct sequence.
-Quick replenishment of stocks.
Periodic checks of registers should be done to ensure that no unauthorised tickets have been taken and that every ticket is verified. Always ensure that the ticket validator and CIPs are locked away in separate safe from ticket stock to prevent Fraud in case of theft.

2.9 TICKET SALES RETURNS

Ticket sales returns are required by the airlines from agents holding their stock 1-4 times a month. If no ticket issues "No sales " report. The total net amount of the sales should be paid to the airline not later than the 15th of the month following issue of the ticket.

2.10 FOREIGN EXCHANGE

If agency deals in foreign currency they obtain rate of exchange from their bank. BBR - bankers buying rate - rate used by the bank when cashing or converting foreign into local currency. BSR - bankers selling rate - rate used when foreign currency is purchased (always higher than BBR).

2.11 FILING SYSTEMS

Card system - printed card made out for each passenger with info such as -clerk´s name / name of pax / address / children / passport nbr / health details / nationality etc. Filed in alphabetical order.
Filing systems: - General alphabetical filing - Subject filing - Geographical filing - Numerical filing - Terminal digit filing - Decimal filing - Chronological filing.

2.12 INSURANCE

Insurance's available for customers travelling abroad: - Medical - Personal accident - Cancellation - Curtailment - Personal money - Baggage. It is good business for agents to sell insurance's - Client protection is important - Useful source of revenue.

UNIT 3 AUTOMATION

3.3 BASIC DATA PROCESSING / COMPUTER CONCEPTS

Capability - Functions which can be performed by a given automated system.
CPU "Central Processing Unit" - Contains all instructions to be executed and data to be processed.
Data processing - Operations performed b automatic machines on data.
EDP "Electronic Data Processing - Any processing of data undertaken by electronic machines.
Hardware - The physical equipment making up a computer.
Interface - A connection between any two devices with different functions.
Multiprocessing - Use of two or more programmes by a computer at the same time.
Software - Programmes, procedures and supporting documentation.
Terminal - Device sending and receiving information over a communication channel.
VDU "Visual Display Unit" - Output device presenting data on a screen.

3.4 FUNCTIONS

Reservations - agents have direct access to airlines computer system and also hotels, car rental etc.
Ticketing - after creating a PNR the computer can quote fare and then be used to produce the ticket via an "Automatic Ticket Machine".
Accounting - systems available: - invoicing - sales ledgers - ticket stock control - balance sheet - a/c receivable - profit and loss statements - check writing.

3.5 BENEFITS TO THE INDUSTRY

Advantages: - Time and cost saving. - Increased number of reservations. - Limits mistakes.
Disadvantage: - High cost of equipment.