Originally Posted by Reifel

Working myself for a IATA agent, obviously much smaller in size, I am a bit suprised though.

As an IATA Agent, for tickets issued via BSP or ARC, you need to pay for all your issued tickets either weekly or monthly, but mosty bi-weekly. depending on the payment cycle you agreed. This is after the ticket is issued (and not after the guests travels). While most tickets will therefore be paid by the time the traveller flies, indeed it can happen that for tickets for last minute bookings, passengers have travelled before airlines are paid.

That said, amongst others for that reason IATA requires their agent to have a financial guarantee (i.e. through a bank or insurance) to cover for the next payment cycle. The amount of this guarantee is reviewed regularly depending on your revenues made.

I can only imagine those OTA have a direct link with the airline to avoid processing through GDS and BSP/ARC to save money to airline and OTA (GDS bookings produce costs, especially on the airline side), but even then I would expect an airline to make sure that the travel agent can cover their debts in case of bankruptcy, but I would believe this is then not as tightly controlled anymore as it's only something between airline and agent, and IATA or BSP/ARC are not involved anymore.