ADM and general contractual position v All IATA

ADM and general contractual position v All IATA Accredited Agents execute an Agreement (“PSAA”) in the form of Resolution 824 (reproduced in the Travel Agent’s Handbook) (“TAH”). v Upon appointment by IATA, the PSAA becomes a bilateral contract between the Agent and the appointing Airline v The contract is a sales agency agreement, covering transactions effected by the Agent on behalf of the Airline v It follows that an ADM raised by a BSP Participating Airline must stem from an action by the Agent, taken under the above contract, on behalf of that BSP Airline v Except where Agent and Airline have agreed, beforehand, to settle other transactions via the ADM. Also local representation of Agents may agree on alternative uses of ADMs. 1

AGENCY DEBIT MEMO (ADM) PURPOSE IATA Resolution 850 m describes the nature and purpose of the ADM as follows (§ 1. 1. ): “The ADM serves to notify an Agent that unless there is some justification to the contrary, the Agent owes the issuing BSP Airline the amount shown on the ADM for the reasons indicated. ” 2

ADM PRACTICE - ORIGINS v The first IATA BSP (1971) included the ADM procedure v Its aim was to enable Airlines to adjust transactions reported by Agents through the BSP v The right to dispute an ADM with the BSP Airline has always existed v The purpose of the ADM dispute procedure is to ensure that Agents continue to maintain their pre-BSP, one-onone, relationships with the Airlines 3

ADMs: its use and limitations Resolution 850 m § 1. 2. describes the circumstances in which ADMs are to be used: “ADMs are a legitimate accounting tool for use by all BSP Airlines to collect amounts or make adjustments to Agent transactions in respect of the issuance and use of Standard Traffic Documents issued by the Agent. ” Resolution 850 m Attachment ”A” § 1. 2 - § 1. 10 describes the limitations when ADMs can be used. 4

SCOPE OF ADM v An ADM results from a transaction initiated by an Agent v Other charges may be billed by ADM, provided there is prior bilateral agreement with the Agent so debited, or with the local representation of Agents v Each Agent is entitled to a maximum of 15 days to review an ADM before it is processed through BSP (Resolution 850 m § 4. 5) 5

TYPICAL ADMs Typical examples of legitimate use of ADMs, as accounting tools include: v To adjust an incorrect fare calculation by an Agent v To retain a commission which is not in fact payable v To capture a transaction that was not reported by the Agent at the time, through BSP v For pre-agreed charges payable by Agent (e. g. rental of automated ticketing equipment) 6

ADM DISPUTE RULES - PRINCIPLES v Dispute procedure is provided in Resolution 818 g Attachment ‘A’ § 1. 7. 9 and Resolution 832 § 1. 7. 9 v An ADM can only be disputed for cause v A reasonable notice ( maximum 15 days) has to be given to Agents for each ADM v When an ADM dispute has been logged, the BSP Airline must take timely action v A duly disputed ADM is taken out of the BSP Billing process v Each ADM must provide the Airline’s contact information in adequate detail 7

INITIATING ADM DISPUTE PROCEDURE v. Log the dispute through BSPlink v. Set out the grounds for the dispute, in adequate detail v. Ask to meet a responsible representative of the Airline to discuss the disputed item v. If the dispute remains unresolved, you may suggest to the Airline in writing that the matter be referred jointly to the Travel Agency Commissioner (TAC) for a solution (as per Resolution 850 m § 4. 9) 8

EFFECTIVE ADM DISPUTE (I) v. BSPlink is the only tool to manage ADMs/ACMs in a BSP environment in order to dispute one effectively, it has to be done through BSPlink v. Agents will have a maximum of 15 days to review ADMs before these are processed via BSP. v. Airlines are required to publish their own ADM Policies. 9

EFFECTIVE ADM DISPUTE (II) v Monitor incoming ADMs as they arrive v The ADM should meet Resolution 850 m requirements v If you disagree, inform the Airline contact, in writing v If the disagreement is not promptly resolved and the BSP Participating Airline maintains the ADM for processing, you can either accept the impending debit or you can formally dispute it, before it is debited, following the procedure described in Resolution 818 g “A” § 1. 7. 9 or Resolution 832 § 1. 7. 9 (Resolution 850 m gives the deadlines, as well) 10