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AFTA Update

Travel Daily Exclusive - 1 May 2018

An IATA Agent Debit Memo (ADM) is an outdated process of a legacy billing system that is ripe for change and change with a seismic shift coming.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 ADM’s.

Dramatic as this may seem, I use this analogy to make the point. A big change is coming and 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 ADM’s.

Globally in 2017, ADM’s account for USD$442m and there were 2.6million on issue with and average value of USD$162. This average is somewhat without meaning as there have been ADM’s for tens of thousands and ADM’s 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 collections of ADM’s is an industry all of its own. No doubt some airlines are trigger happy when it comes to ADM’s 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 dialog at the meeting last week there continues to be constructive concepts and ideas being developed to reduce ADM’s, improve airline and GDS processes, a focus on getting pricing right in the first place and educating and communicating airline ADM polices so that the agency community have 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 an 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.