Travel agencies face Tk1,500cr payment crisis amid internet outage

Travel agencies have been unable to collect approximately Tk1,500 crore in payments for ticket sales from corporate clients and other customers due to the recent internet and communication disruptions, according to the Association of Travel Agents of Bangladesh (Atab).

These agencies now fear defaulting on their payments to the International Air Transport Association (IATA), which were originally due by 31 July.

However, after Atab's request, the IATA yesterday granted an extension until 6 August for the agencies to complete the payment as confirmed in a letter from Atab Secretary General Afsia Jannat Saleh.

Many travel agencies have reported the possibility of becoming defaulters by failing to pay the IATA within the stipulated time, the letter stated.

"Just as we could not pay the dues of foreign airlines due to the lack of the internet, similarly we could not collect the bills due to the closure of banking services. We had a daily business of at least Tk100 crore," Atab President Abdus Salam Aref told TBS.

He further said, "We were not able to contact any airlines during the internet service disruption. We communicate through GDS software, which cannot be accessed without the internet. It was not possible to make contacts abroad even by direct phone call."

However, due to the recent disruptions, approximately Tk1,500 crore in payments is currently pending with their clients, as the agencies have not been able to collect this money from the clients as they normally would, the organisation president said.

The IATA acts as an intermediary between travel agents and foreign airlines. Travel agents pay ticket sales within the stipulated time of 15 days and IATA distributes the money among the airlines as per their due.

Akbar Ali, a travel agent based in Dhaka, told TBS, "Our business turnover was stagnant amid the shutdown and internet disruptions. I failed to collect a few crores of taka from my clients. Thus I could not pay the airline's fee.

"Not only that, we also lost a significant amount of business as online sales were disrupted. Hopefully, the situation will be fully normal by next week as internet and other services are gradually restored."

Atab, representing about 4,000 travel agents nationwide, noted that the travel industry typically handles at least Tk100 crore per day.

Since 18 July, the majority of flight ticket sales, date changes, and hotel bookings were suspended, resulting in significant business losses.

The internet blackout occurred amid violent clashes related to the quota reform movement. Bangladesh stayed disconnected from broadband internet between 18-23 July, and mobile internet between 17-28 July.

Foreign airlines' funds stuck in Bangladesh

Additionally, a significant amount of foreign airlines' revenue remains stuck in Bangladesh due to issues with transferring funds through banking channels, according to Atab.

Regarding the funds, Atab President Aref said, "Some airlines have been able to remit some amount to their home countries, but not all have been able to. However, we do not have a total account at the moment."

The delays in fund repatriation are mainly due to a shortage of US dollars, according to industry insiders.

Earlier on 2 June, IATA called on the government of Bangladesh to release $320 million in airline revenues that are being held "in violation of international agreements."

The statement noted that the situation is particularly severe in Pakistan and Bangladesh, where airlines are unable to repatriate $731 million – $411 million in Pakistan and $320 million in Bangladesh - of revenues earned in these markets.

Willie Walsh, IATA's director general, said, "Pakistan and Bangladesh must release the $731 million in blocked funds immediately to ensure airlines can continue providing essential air connectivity."

"In Bangladesh, the solution is in the hands of the central bank, which must prioritise aviation's access to foreign exchange in line with international treaty obligations," he added.