BILLING & SETTLEMENT PLAN (BSP)
A PRINCIPAL FEATURE OF THE BSP IS THE USE OF STANDARD IATA TICKETS FOR ALL AIRLINES INSTEAD OF INDIVIDUAL AIRLINES' OWN STOCKS. STANDARD IATA TICKETS SIMPLIFY THE ADMINISTRATIVE WORK AND ACCOUNTING. THE CHARACTERISTIC OF THE BSP IS THE AGENT IS SUPPLIED WITH STOCKS OF STANDARD TRAFFIC DOCUMENTS FOR ALL AIRLINES PARTICIPATING IN BSP. THE DOCUMENTS ARE ISSUED USING A TICKET IMPRINTER, WHICH IMPRESSES AGENTS' VALIDATE PLATE, THE CARRIER IDENTIFICATION PLATE OF THE ISSUING AIRLINE AND DATE OF ISSUE. ONLY ONE SALES TRANSMITTAL IS COMPLETED FOR ALL SALES EFFECTED DURING THE REPORTING PERIOD AND IS DISPATCHED TO THE PROCESSING CENTER. THE AGENT’S BILLINGS ARE PREPARED BY PROCESSING CENTER, AND SETTLEMENT IS MADE TO THE CLEARING BANK. OVER 33000 AGENT LOCATIONS ARE PARTICIPATING IN MORE THAN 50 operational BSPs. THEIR TOTAL SALES VOLUME THROUGH THE SYSTEM WAS USD 65.4 BILLION IN 1993. THE ADMINISTRATIONS OF ALL BSP ARE CONTROLLED BY THE “PLAN MANAGEMENT” IN THE IATA GENEVA OFFICE. THE REPORTING OF SALES IS MADE ON A SINGLE SALES TRANSMITTAL TO ONE CENTER POINT CALLED “CLEARING BANK” OR “PROCESSING CENTER”. THE PAYMENT IS MADE TO THE CARRIER WHEN THE AGENT IS BILLED FOR ALL TRANSACTIONS RECORDED ON THE SALES TRANSMITTAL, AND THE AGENT PAYS ONE CONSOLIDATED PAYMENT THROUGH THE CLEARING BANK. THE FREQUENCY OF REPORTING AND REMITTANCES IS FROM ONE TO FOUR TIMES A MONTH. THE LENGTH OF THE REPORTING PERIOD AND FREQUENCY OF REMITTANCES ARE DETERMINED BY THE “BSP COMMITTEE”. PARTICIPATION IN THE BSP IS NOT LIMITED TO IATA MEMBER AIRLINES ONLY. NON-IATA AIRLINES OPERATING SCHEDULED PASSENGER SERVICES IN THE AREA COVERED BY A BSP ARE PERMITTED TO PARTICIPATE IN THE PLAN.
BSP IS A WORLDWIDE SYSTEM COVERING OVER 140 COUNTRIES. IT PROVIDES A CENTRAL SYSTEM AND A GLOBAL STANDARD FOR REPORTING AND SETTLING ACCOUNTS FOR TRANSACTIONS IN THE TRAVEL, TOURISM AND LEISURE INDUSTRY.
A METHOD OF PROVIDING AND ISSUING STANDARD TRAFFIC DOCUMENTS AND OF ACCOUNTING AND SETTLING ACCOUNTS BETWEEN AIRLINES AND TRAVEL AGENTS.
A REPORTING SYSTEM SET BY IATA FOR COLLECTING TICKET PAYMENTS FROM AGENTS AND DISTRIBUTING THE FUNDS TO THE APPROPRIATE AIRLINES.
PAYMENT SYSTEM SET UP BY THE INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) WORLD-WIDE TO PROCESS, SUPERVISE, AND REGULATE PAYMENTS BY TRAVEL AGENTS TO AIRLINES AND IS A REPORTING SYSTEM FOR COLLECTING TICKET PAYMENTS FROM AGENTS AND DISTRIBUTING FUNDS TO APPROPRIATE AIRLINES.
BSP LINK
IT IS THE GLOBAL INTERFACE FOR TRAVEL AGENTS AND AIRLINES TO ACCESS THE IATA BILLING AND SETTLEMENT PLAN. IT IS AN INNOVATIVE INTERNET-BASED SYSTEM TO FACILITATE INTERACTION AND EXCHANGE OF INFORMATION BETWEEN ALL PARTICIPANTS IN THE BSP.
EXTRA CHARGES & REFUNDS
THE OTHER TRANSACTIONS, SUCH AS EXTRA CHARGES AND REFUNDS, ARE ACCOUNTABLE AT THE SAME TIME AS PAYMENT IS MADE ON SALES RETURNS.
OVERDUE REMITTANCE
IF THE CLEARING BANK DOES NOT RECEIVE APPROPRIATE REMITTANCE BY THE PRESCRIBED REMITTANCE DATE, THE PLAN MANAGEMENT WILL BE INFORMED, AND A “NOTICE OF IRREGULARITY” IS SENT TO THE AGENT. IF A COMPLETE SETTLEMENT HAS STILL NOT BEEN MADE WITHIN 10 DAYS OF THE PRESCRIBED REMITTANCE DATE, THE AGENT WILL BE DECLARED “IN DEFAULT” WITH RESPECT TO ALL APPROVED LOCATIONS.
NOTICE OF OVERDUE SALES TRANSMITTAL
THE AGENT WHO FAILS TO SUBMIT HIS SALES TRANSMITTAL TO THE CLEARING BANK BY THE PRESCRIBED SUBMISSION DATE WILL RECEIVE A “NOTICE OF OVERDUE SALES TRANSMITTAL” FROM PLAN MANAGEMENT OF BSP WITH RESPECT TO THE LOCATION
CONCERNED.
NOTICE OF IRREGULARITY
IF SALES TRANSMITTAL STILL HAS NOT BEEN RECEIVED IN TIME FOR ITS INCLUSION IN THE LAST BILLING OF THE REMITTANCE PERIOD, THE “NOTICE OF IRREGULARITY” WILL BE SENT TO AGENT.
AGENT’S CHEQUE
IF AGENT’S CHEQUE IS NOT HONORED BY DRAWEE BANK, THE CLEARING BANK WILL DEMAND IMMEDIATE PAYMENT FROM AGENT, AND IF SUCH PAYMENT IS NOT MADE ON DEMAND, THE AGENT WILL BE DECLARED “IN DEFAULT”.
IN DEFAULT
IF AN APPROVED LOCATION HAS 4 INSTANCES OF IRREGULARITY WITHIN ANY 12 CONSECUTIVE MONTHS, THE AGENT WILL BE DECLARED “IN DEFAULT” WITH RESPECT TO ALL APPROVED LOCATIONS.
CONSEQUENCES OF DEFAULT
THE CONSEQUENCES OF DEFAULT ARE THAT ALL CARRIERS’ IDENTIFICATION PLATES AND TRAFFIC DOCUMENTS WILL BE WITHDRAWN, AGENTS WILL ONLY BE ABLE TO DO BUSINESS WITH CARRIERS ON A “CASH BASIS”, CARRIERS WILL WITHHOLD PAYMENT OF COMMISSIONS TO AGENTS, REDUCED FARE TRANSPORTATION PRIVILEGES WILL BE WITHHOLDEN, AND AGENTS’ IATA APPROVALS WILL BE WITHDRAWN.
STEERING PANEL OF BANK SETTLEMENT PLAN
PANEL WITH THE INSTRUCTION AND DIRECTIONS FROM BANK SETTLEMENT PLAN COMMITTEE FOR THE IMPLEMENTATION AND CERTAIN SUPERVISORY ASPECTS OF A BANK SETTLEMENT PLAN.
PAYMENT TO AIRLINES
IN COUNTRIES WHERE A BSP IS IN OPERATION OR WHERE A GREATER FREQUENCY OF PAYMENT HAS BEEN ESTABLISHED, THEN PAYMENT MUST BE MADE TO THE AIRLINES IN ACCORDANCE WITH APPLICABLE REGULATIONS.