The Hindu Business Line : Domestic airlines may get on to IATA's Bill gateway

JET Airways and Air Sahara have initiated steps to integrate their revenue collection from domestic ticket sales with the Bill Settlement Plan (BSP) of the International Air Transport Association (IATA).

While a Jet Airways pilot project in this regard has already taken off, Air Sahara is slated to embark on the initiative any day now. Indian Airlines too is understood to be considering a proposal to collect revenues from domestic ticket sales through the BSP mechanism of IATA.

According to informed sources in the aviation industry, airlines across the globe recover their dues from ticket sales through travel agents through the BSP mechanism of IATA. According to practice, the BSP, and not the respective airlines, issues similar looking tickets to IATA-affiliated travel agents as per the capping of the agents in question. The travel agents, in turn, issue the tickets to customers after affixing the appropriate airline code and other specifications. At the end of the accounting cycle - which is fortnightly is most cases - the payment due to the airline is paid by the travel agents to BSP, which, in turn, passes on the money to the respective airlines after computation and deduction of a small commission/fee for facilitating the transaction.

As of now, airlines in India issue tickets separately to travel agents who sell them to their customers before passing on the sale proceeds to the respective airlines after appropriate account reconciliation. This involves maintenance of huge inventories, manual accounting processes, handling of multiple financial instruments and deployment of additional manpower.

The sources said that transacting through the BSP mechanism has several advantages for the airlines and travel agents. Inventories are reduced drastically as air tickets neither have to be issued by airlines nor stocked in excess by the travel agents. It enhances transparency in transactions and eliminates the possibility of human error in the computation process. It also reduces manpower requirements and cost of transactions even as the accounting process is streamlined and hassle-free.

Says a source in the aviation industry: "There is great pressure on all airlines to gradually migrate to the BSP payment gateway. However, the problem lies in the fact that a substantial portion of our domestic ticket bookings comes from non-IATA travel agents. We do know how the issue is going to be resolved. I guess that, over time, all travel agents will either have to get themselves affiliated with IATA or fade out." In fact, some travel agents have already begun work on their IATA affiliation, according to the sources.