Local GSAs await news on bank guarantee ruling

No sign that international ‘reprieve’ will apply in SA ALAN PEAT IN SA general sales agents (GSAs) for airlines have not yet heard anything about whether an international agreement is likely to see them excused the necessary bank guarantees to cover possible bad payments to their client carriers. This followed news sent to FTW by Glenn Shires, UK-based general secretary of the Federation of Airline General Sales Agents (Fagsa), that it had secured agreement from the new European Air Cargo Program (EACP) for the return of bank guarantees to its members throughout Europe. The move will cut costs for GSAs, he said, who pay large fees to provide a bank guarantee - often for amounts of €500 000 (R4-million) or more. “FAGSA’s concern over bank guarantees arose in 2004 with the introduction of the new EACP by the International Air Transport Association (IATA)” he said, “which re-classified freight forwarders as “intermediaries” and released them from the need to provide bank guarantees as they had previously done. “The same condition should have been applied to GSAs, but was not so that they remained liable to carriers and had to continue providing guarantees.” Fagsa has now also asked for IATA Resolution 871 to be rewritten to include these provisions - which will effectively remove the need for GSAs to provide bank guarantees anywhere in the world, provided settlement is directly through the IATA CASS accounting system. Although local information is a bit slim at present, two major GSAs have told FTW that they are still held to guarantees - and, although one was a member of Fagsa, he had heard nothing direct from them about the issue.