Canadian arbiter overrules IATA, reinstates agency
By Nadine Godwin
Canada's travel agency commissioner has reinstated a Vancouver travel agency that IATA had terminated in November for violating rules governing use of IATA's numeric codes.
IATA accused BNW Travel Management of violating a rule that states the codes cannot be "lent, subcontracted or hired to a third party." The resolution also states the codes cannot be used for "identification or other purpose on a proprietary product of any third party without express authorization to do so by IATA."
While the travel agency commissioner in Canada declined to uphold BNW's termination, he stated that the agency is forbidden to use the IATA name, logo or code on any in-house ID cards without IATA's approval. He also ordered BNW to recall all in-house ID cards that carry the IATA name and/or code and destroy them.
IATA said it "respectfully disagrees" with parts of the commissioner's decision. However, IATA said the decision "makes crystal-clear that no person or entity has the right to display the IATA numeric code or IATA's trademarks and service marks on in-house ID-cards or other credentials."
The BNW dispute resembles a dispute between IATA and YTB Travel Network in the U.S.
In its termination letter to YTB, IATA accused the agency of lending, subcontracting or hiring the numeric code to others and ordered the agency to cease using the code in connection with any form of ID or credentials. YTB has taken its case to the travel agency commissioner in the U.S. The case is pending.
YTB Travel Network, which was canceled by IATA last November, has filed an appeal before the IATA travel agency commissioner seeking reinstatement.
Alternatively, the agency asked the commissioner for the U.S., James Johnstone, for clear permission to continue using its numeric code number, which was assigned by ARC, with the understanding that YTB agrees not to represent itself as an IATA agency.
In the November termination letter, YTB was "directed immediately to cease the use of the IATA numeric codes, including, without limitation, in connection with any ID or similar credentials."
In the months since, YTB has continued to do business through ARC and to make the code available to its independent contractors, who are called referring travel agents in the YTB business model.
Although IATA's termination letter did not mention ARC, Alexander Anolik, attorney for YTB, interprets the words "cease the use of the IATA numeric codes" in the broadest sense, meaning the agency is to stop using the number for all purposes, including as an ARC number.
Following on that view, the papers filed with the IATA commissioner ask, "As the number was initially granted by ARC, how does IATA have the right to force YTB to stop using its code?" The agency contends IATA does not have that right.
As far as ARC is concerned, YTB can continue functioning normally as an ARC agency. According to Allan Muten, ARC's director of strategic communications, ARC only revokes an agency's code if the agency has violated ARC's agent reporting agreement. It does not revoke a code in response to a non-ARC issue.
In its termination letter, IATA said YTB had violated the carriers' accreditation standards in that the agency "lent, subcontracted or hired to a third party an IATA numeric code."
At the time, YTB Travel Network CEO Kim Sorensen said that making the code available to contractors was "the same as what any host agency has done." By implication, he raised the question: Why was YTB terminated when others were not?
In documents filed with the commissioner, YTB offered its answer. It accused IATA of enforcing its standards belatedly "as a pretense to quash competitive activity."
After labeling the IATAN program "the biggest card mill in the world," YTB said IATA's refusal to let the agency attempt to change practices in order to regain the IATA endorsement was an indication that IATA was trying to eliminate YTB as competition "for being a perceived threat to [IATAN's] monopoly in the travel card industry."
YTB told the commissioner that regardless of IATA's motive, IATA had waived its right to enforce a rule against lending the IATA code because YTB's business model had been well publicized for a few years, and IATA had recertified YTB several times since it became an IATA agency in 2001.
Humberto Rivero, IATA's regional director for the Americas, declined to answer questions about IATA's motives or its intentions regarding YTB's use of its numeric code as an ARC agency because the dispute is before the commissioner. However, he said, IATA believes that "the termination of YTB was entirely proper and consistent with applicable rules and regulations."
To contact the reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].