Why Credit Terms in Corporate Travel Are Risky (And What You Should Do Instead) 

1. Strict Payment Deadlines

TMCs do not hold credit with airlines in the traditional sense. Through systems like IATA’s Billing and Settlement Plan (BSP), payments must be remitted on a weekly or bi-weekly cycle. Late payments result in an immediate suspension of the TMC’s ticketing authority.

2. High Transaction Value with Low Margins

With ticket prices frequently exceeding SGD 1,000, the belief that travel agents earn massive airline commissions is a myth. Modern corporate travel operates on thin, fee-based margins. Carrying vast amounts of debt for low returns creates an unsustainable risk profile.

The Hidden Danger of Working with Under-Capitalized Agencies

Large global TMCs strictly limit credit terms because funding huge transaction volumes on thin margins requires massive working capital.

Conversely, smaller or under-capitalized agencies may offer lenient credit terms to win accounts. While this may work temporarily on low volumes, a single client default can trigger a domino effect:

1. The agency fails to remit funds to the airline BSP.

2. The airline revokes the agency's credentials.

3. All confirmed and issued tickets under that agency are immediately voided.

4. The client company loses both its travel arrangements and its funds with zero recourse.

The Safer Alternative: Credit Card Charge Form (CCCF)

To avoid corporate cash-flow risk while streamlining reconciliation, forward-thinking Singapore businesses use CCCF (Credit Card Charge Form) or Corporate Card-on-File settlement.