Iata is relaxing the rules which apply to financial reviews on travel agents for a full year from 1 November 2021 to 31 October 2022.

“Agents’ accounts are evaluated based on five financial ratios. Normally, all must be passed in order to score an overall pass on the financial review assessment,” advised the Travel Trade Consultancy (TTC).

“However, Iata has agreed to temporarily relax the operating and net profit tests, provided that the agent maintains positive net equity and satisfies the ‘elevated’ quick and cash cover ratios.

“The requirement to be profitable in the trading periods prior to the onset of Covid-19 has been removed.”

The financial ratios determine how often travel companies must settle their BSP (Billing and Settlement Plan) accounts with Iata, with those achieving the highest ratios in the financial tests only having to settle BSP twice per month.

Those with lower ratios have to settle their BSP accounts more frequency and/or provide financial security.

TTC added that agents “may need to discuss enhanced disclosures” with their accountants or auditors as a result of Iata’s changes to financial ratios.