The International Air Transport Association (IATA) has restored the Default Insurance Programme (DIP) in Kenya weeks after it suspended it following disagreements with the provider SAHAM. 

In a letter addressed to the CEO of KATA, Nicanor Sabula and copied to the IATA Area Manager Ms. Sally Osure, the Director of Global Delivery Centre in Madrid Mr. Enrique Girondo stated, “We would like to inform you that the current type of financial security available for Kenyan travel market- Default Insurance Program (DIP) will be renewed for 2018. All travel Agents are notified today that they are able to present the new DIP certificates as alternative to the bank guarantees”.

The announcement by IATA came as a huge relief to the travel agency community who had agonized for weeks after IATA announced the sudden withdrawal of DIP from the East Africa market and immediately demanded for bank guarantees from agents. DIP is a popular financial security preferred by many agents due to its flexibility and affordability. It was first introduced in Kenya in 1999 courtesy of the efforts by KATA, local BSP airlines and IATA and has since then spread to other countries in Africa.

For the last three weeks, the Kenya Association of Travel Agents (KATA) has been engaging with IATA and other stakeholders in an effort to have DIP restored. IATA claimed in a circular send to travel agents on 2nd December 2017 that Saham had failed to provide certain required documentations forcing them to request for alternative financial security from agents effective 31 December 2017. On their part, SAHAM held that they had provided required documents as per the practice for the last 18 years and wondered why IATA had suddenly changed the requirements. 

“We are grateful that after very high level engagements with IATA, we finally have a solution. We should never have been caught in this disagreement in the first place. There could have been a better way to handle a situation like this, said KATA CEO Nicanor Sabula.  We want to thank our BSP airlines, our global association UFTAA and all our members for the great support they offered throughout the period, Sabula added.

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