The global trade organization representing over 290 airlines, accounting for more than 80% of the world’s air traffic, is departing Nicaragua after the cancellation of its legal status.
International Air Transport Association (IATA).
Despacho 505
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September 03, 2024
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09:11 AM
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Despacho 505
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Copyright Despacho 505
The International Air Transport Association (IATA) has confirmed its definitive withdrawal from Nicaragua after announcing the temporary suspension of its remittance and settlement system, known as BSP, following the cancellation of its legal status by the Ministry of the Interior (Mint).
A source within the travel agency sector, the primary group affected by the departure of the global organization dedicated to supporting commercial aviation, confirmed to DESPACHO 505 receiving a call from IATA informing them of the withdrawal and stating that they “do not guarantee commissions or payments.”
They were also informed that a formal statement regarding their departure from the country would be sent.
IATA’s exit will have a significant impact on air ticket sales for travel agencies affiliated with this system. These agencies benefited from the Billing and Settlement Plan (BSP), which streamlined ticket issuance by providing a standard platform for payments and settlements between agents and airlines.
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Now, these agencies will have to operate directly with airlines or through international agencies affiliated with IATA. This significantly reduces their profit margins.
As explained to DESPACHO 505 by a travel agent who worked with IATA, “business is not stopped, there are ways to sell tickets, but I am affected because we are paying 35, 10, or 20 dollars for issuance when we used to pay nothing. Besides that, you lose the sale in the country because they don’t recognize even 1%, and the operation is more complicated.”
Domino Effect on Airlines
IATA’s withdrawal follows the Mint’s cancellation of its legal status on August 19th, through Ministerial Agreement number 38, which led to the freezing of its bank accounts in Nicaragua by the “compensating bank, Banco Lafise.”
The global trade organization, representing over 290 airlines, equivalent to more than 80% of global air traffic, is definitively closing in Nicaragua, mirroring a similar situation in Venezuela.
This situation has raised alarms among IATA-affiliated travel agencies in Nicaragua, numbering around 20, as well as smaller companies that lacked the capacity for membership but relied on alliances for managing international flights.
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Furthermore, it has triggered a domino effect on airlines serving Nicaragua. Around the same time, Avianca notified agencies that it had ordered the removal of flight inventories. With the IATA billing system disabled, “they are not going to risk losing,” explained a source in the sector.
Subsequently, on August 22nd, Aeromexico also directed adjustments for ticket sales due to the illegalization, whether temporary or not, of IATA BSP Nicaragua. This airline stipulated that “until further notice, all Aeromexico (AM 139) sales must be made exclusively with credit cards,” according to another source.
Similarly, Copa Airlines announced the closure of its point of sale for ticket issuance. The airline notified travel agencies that they will only be able to purchase air tickets through its website.
