Cargo GSA’s in Asia Supplement~ FAGSA pushes end to bank guarantees

FAGSA – the Federation of Airline General Sales Agents, which has 178 members worldwide – is supporting the spread of the CASS settlements system in Asia, as part of its campaign to remove the burden of bank guarantees from the region's GSAs.

The organisation has been campaigning for years to end the practice whereby airlines ask the GSAs to provide a guarantee for two or three months of revenue, to guard against the GSA going out of business and leaving the carrier out of pocket.

In Europe it managed in 2006 to get agreement that GSAs who joined the CASS system should not have to put up bank guarantees, and early last year IATA agreed in principle to extend that to all CASS systems worldwide.

But Glenn Shires, general secretary of FAGSA, says the practice is still not widely accepted in the Middle East and Asia. The association’s strategy has thus been to support new CASS systems being set up in various Asian countries, and to point out that GSAs can be an important step to giving them critical mass. “Now that CASS has opened up to GSAs, our members pump US$0.5 billion of business through CASS systems worldwide,” he points out.

Despite GSAs joining CASS, Shires said some carriers, especially in the Middle East, still insist on bank guarantees from them. “They are taking a belt and braces approach – insisting GSAs settle through CASS and still asking for bank guarantees, which is not fair,” he says.