Nail-biting times for Corporate Travel
Jamie Pherous is ruing his change of auditor last year from PwC to Deloitte.
On Wednesday, the suspension from ASX trading of Corporate Travel Management shares was extended until at least November. It is apparent that the company and its brand new auditors, Deloitte Touche Tohmatsu, are at existential loggerheads on a number of key issues. Corporate Travel shareholders are praying that the stand-off can be resolved, because a travel agency with any question mark over its finances is in fast transit to a world of pain.
The interchange between travel agencies and the companies they deal with – mostly hotel chains and airlines – relies on trust; trust that when the agency books a flight or a room it will remit payment for that booking within days.
When airlines and hotel operators worry that a certain travel agency is not on solid financial ground, they demand payment on the day of booking. If that were to happen to Corporate Travel, it would be forced to close its doors. The company does not have the hundreds of millions of dollars lying around that would be required if called upon to settle upfront.