IATA BSP Essentials for Travel Agents Lesson: 1 The BSP System

Learning Outcomes:

By completing this lesson, you will be able to:

• Explain what is the IATA BSP
• List the benefits of the BSP to an IATA Accredited Agent

Introduction

This module will:

• Explain the objectives of the Billing and Settlement Plan (known as the "BSP")
• Demonstrate BSP operations
• Provide a definition and an explanation of the BSP and benefits of using the BSP.

The Billing and Settlement Plan is a system designed to facilitate the sale of airline tickets issued by IATA Accredited Agents and to simplify the reporting and remittance (payment) of these transactions to IATA Member and non-IATA airlines. 

The Billing and Settlement Plan and its Data Processing Centres (DPCs) make it possible for IATA Accredited Agents to sell air transportation and to report their sales to the BSP participating airlines through the BSP. 

The BSP is a system whereby IATA Accredited Agents can sell many airline services and report these sales to each airline through the BSP system.

In general, most merchants pay for their supplier products and services before selling them to consumers.

However, in the case of travel agencies, airline products and services are paid for after they have been re-sold to their travel customers

Here is how the selling of airline services takes place:

• Customer requires an air transportation service
• Travel agent offers advice, flights and fares
• Customer makes a decision to purchase the service
• Travel agent makes a reservation through a Global Distribution System (GDS) or a Ticketing System Provider (TSP) and issues a ticket
• Ticket details are sent automatically to the Data Processing Centre (DPC) of the BSP

The BSP Data Processing Centre receives airline ticket sales information from the Global Distribution System or TSP when the ticket is issued by a travel agent. The DPC processes the information to produce a billing report of the tickets sold by the agent for each BSP participating airline.

In the BSP system the agent pays one amount to a central point - IATA BSP.

BSP participating airlines receive one billing report from the IATA BSP, which contains detailed information of each travel Agent's sales for each airline. 

• The BSP DPC produces and delivers electronically one sales report (Airline Billing Analysis) for each Participating Airline detailing sales issued by all IATA Accredited Agents. 
• The BSP DPC also produces a billing report (Agent Billing Analysis) detailing each ticket transaction issued by the agent for all the BSP participating airlines. 

Here is an example of how the BSP system works. . . .

BSP System example

I'm an IATA Accredited Agent.

I have just booked and issued a ticket on British Airways for a one-way journey from London to Cairo with British Airways continuing to Cape Town with South African Airways for a customer, Mr. Richard Green. 

BSP System example continued 

This is how the reservation looks in the Global Distribution System (GDS): GREEN/RICHARD MR  23APR LHR CAI Y BA072 1550 1700 0 767 D 25APR CAI CPT Y SA340 0900 1430 0 320 B

Upon issuing Mr. Green's ticket, my GDS system will, at the end of the day, transmit the ticket sale information to the Data Processing Centre for processing. All information transmitted from the GDS system to the BSP is electronic.

ELECTRONIC TICKET RECORD INV:                   CUST:IAT000      PNR:IEQPVT TKT:2205974261099      ISSUED:12FEB09   PCC:04D9   IATA:69500104 NAME:GREEN/RICHARD NAME REF:                               TOUR ID:000001 FOP: CASH CPN A/L  FLT  CLS   DATE   BRDOFF   TIME   ST   F/B     STAT 1   BA   072  Y     23APR  LHRCAI   1550   OK   Y       OPEN 2   SA   340  Y     25APR  CAICPT   0900   OK   Y       OPEN  FULLY ENDORSABLE FARE  GBP  1128.00 TAX   GBP  9.80XX   TAX GBP  15.21ZZ   TAX GBP  6.96UK TAX   GBP  10.49SA  TAX GBP  38.23ZR   TAX GBP  17.77WW TOTAL GBP  1226.46  LHR BA CAI M750.38 SA CPT M750.38NUC1500.76END ROE0.751949

After the BSP DPC receives the information on Mr. Green's ticket, the ticket information is stored in the BSP system until it is time to produce the billing reports of ticket sales for our travel agency and for the BSP participating airline: British Airways. 

Therefore, Mr. Green's ticket sale will be reported as follows: 

1. An Agent Billing Analysis Report to our travel agency 
2. An Airline Billing Analysis report to British Airways 

Mr. Green paid for his ticket by personal cheque (a "cash" payment). The BSP will eventually bill our agency for the value of Mr. Green's ticket. The Agent Billing Analysis will show the amount we owe to the BSP participating airline for Mr. Green's ticket. 

The BSP will collect the funds for all cash sales issued during a reporting period and settle the amounts to each individual BSP participating airline for which we have issued tickets for the period. Our travel agent's responsibility is to ensure one payment, called "remittance" covering all airlines' sales reached IATA's Clearing Bank account on the remittance date established by the BSP reporting calendar. IATA's responsiblity is to settle the Agent remittance to all BSP participating airlines. 

Benefits for IATA Accredited Agents 

There are many ways travel agents benefit from participating in IATA's Billing and Settlement Plan: 

Simplification 

• Neutral Standard Traffic Documents (STDs) replace dedicated airline ticket stocks. 
• Agent sales are reported electronically to central point 

Savings 

• Less resources are required for airline sales reporting 
• Electronic distribution of billing reports 

Enhanced control 

• Reporting of standard traffic documents under BSP control 
• Consolidated document flow, permitting accelerated quality controls 
• Overall process monitoring by a neutral body - IATA BSP. 

Benefits continued:  They can sell interline travel, simplifying flight connections, facilitating the transfer of passenger baggage between airlines and reducing the passenger's cost of travel. They are branded as IATA Accredited Agents with a unique code called the IATA Numeric Code. The agency's IATA Numeric Code appears on every passenger airline travel document they produce. They receive the same fair treatment from each BSP participating airline.

	DID YOU KNOW
	the first BSP programme was launched in Japan in 1971 and now successfully operates in 160 countries worldwide? Over 80% of worldwide airline revenues are ticketed by IATA Accredited Agents through the BSP system.

Key Learning Points: 

The BSP is a system used by IATA Accredited Agents to sell, report and remit passenger air transportation services on behalf of the BSP participating airlines.  Travel Agents benefit from the BSP by saving time and simplifying the sale and reporting of airline services.

Next is the final Study Check to review your understanding of this lesson prior to moving on to the next one. Take the time now to review any concepts you are not sure of before moving on to the Study Check. You may then continue to Lesson 2 — BSP Participants. 

Study Check  Complete this definition of the BSP using the correct word from the answer options listed below.  1. The Billing and Settlement plan was created by IATA to facilitate the __________ of airline tickets by IATA Accredited Agents worldwide and to simplify the __________ and __________ of airline ticket sales to the BSP Participating Airlines.  A. purchase; remittance; collection B. sale; reporting; remittance C. discounting; description; control D. collection; organization; centralization  2. Which is a benefit for IATA accredited travel agencies participating in the IATA Billing and Settlement Plan?  A. The ability to sell and report any airline in the world B. The ability to discount airfares for travel on BSP airlines C. The ability to sell travel on BSP Participating Airlines D. The ability to earn override commissions from BSP Airlines  3. How is an IATA Accredited Agent's ticket sale reported to the BSP system?  A. The Agent's GDS system electronically reports each ticket sale to BSP B. The Agent's accounting team submits an electronic sales report to BSP C. The Ticketing Airline records the ticket sale when the customer uses the ticket D. The Ticketing Airline reports used ticket coupons to BSP after the ticket expires  4. If an IATA Accredited Agent sells all air transportation on Cathay Pacific, KLM, Air France and Delta airlines in the same BSP reporting period, how many sales reports will the agency submit to BSP?  A. 4 B. 3 C. 1 D. 0