Bestjet may have been B2C, but here’s 3 considerations to spot questionable suppliers
Sadly, 2018 was another year of large travel company failures. In 2017 many were shocked when Si holidays collapsed, but many had internally flagged concerns with the way the company was trading.
2018 saw a number of wholesalers going down, sadly costing travel agents a fortune. But the big one of 2018 was the failure of BestJet. What was that really that surprising?
No – and travel agents need to understand the three factors which will identify companies well worth avoiding.
A history of asset shifting and liquidation
More specifically, the owners had history of companies that went broke. Let’s face it, launching an airline in Australia, a country which tends to only be big enough to support a duopoly, was always a challenge.
Best Jet was set up by Rachel James just after the collapse of Air Australia in 2012. Air Australia was set up by her husband, Michael James and went down to the tune of $97 million.
If the owners of the company have history of shifting assets from one company to another before liquidating those entities and owing debts of millions of dollars, chances are they will do it again.
There are such companies operating in Australia, selling to travel agents after they shifted assets and liquidated their other companies leaving debts to the tune of millions of dollars. One of them for over 20 Million Euro’s. This one quite literally moved across the road, changed their name and became preferred supplier to a number of agencies around Australia.
Couldn’t Get accreditation
Regardless of your views on all things AFTA and ATAS, it’s better than nothing. Read the full details here, but AFTA fought for 18 months to stop best jet being a member of ATAS. Why? Because the numbers didn’t make sense.
If a company is not comfortable operating transparently and can’t supply figures that make sense and can’t get accreditation, agents should be very concerned. AFTA lists cancelled participants here. If they aren’t listed, ask why.
For the record, Stuba not only has ATAS accreditation but one of the few travel companies in the world who have an S&P “High Credit Worthiness Rating”.
Companies tend to set up smoke screens – a big focus on noise, not a lot on product. Flashy events, flashy cars, but is what they are doing getting better?
Where there’s smoke, there’s fire
With many of the companies that have gone broke, industry rumours swirled beforehand for months. Often these rumour mills are started by jealous competitors, but the easiest way to dispel a rumour is to do a bit of digging and sort through the facts.
If your head office starts raising concerns, it’s definitely worth asking the question. No need to be stupid about it, but be sensible, be informed.It looks too good to be true, it probably is. Question is, will agents be brave enough to ask the questions themselves?