Biman Bangladesh Airlines Ltd.
BSP & Capping Distribution for Ticketing.
BSP:
IATA’s Billing and Statement Plan (BSP) provides services for the settlement of financial
transactions between travel agents and alirlines. BSP link is an innovative, internet-based
system, which facilitates these interactions and exchanges of information among all
participants in the BSP.
How a BSP Works:
A BSP is the central point through which data and funds flow between travel agents and
alirlines. Instead of every agent having an individual relationship with each airline, all of the
information is consolidated through the BSP
Agents make one single payment to the BSP (remittance), covering sales on all BSP Airlines. The
BSP make one consolidated payment to each airline, covering sales made by all agents in the
country/region. Agents are provided with a range of electronic ticket numbers to be used for
sales for any airline.
Working Process for Agents:
[Link] to sell on behalf of airlines
Before an agent can begin selling on behalf of airlines, the following must take place:
A range of electronic ticket numbers are assigned to the Agent
The Airline assigns ticketing authority to the Agent to allow issued of ETs.
Agents need to have access to an IATA –approved ticketing system such as a Global
Distribution System (GDS).
2. Reporting by Agents
The agent reports all sales and refunds at the end of the reporting period. This is done
electronically, through BSPlink. All transactions are forwarded to a central BSP Data
Processing Centre (DPC).
[Link] by BSP
The Data processing Centre:
Captures the tickets and refunds information from data files that have been
transmitted by the GDS/ticketing system or other automated system such as BSPlink.
Processes all relevant data and produce an “Agents Billing Analysis’’ for each agent.
This analysis is compiled from information of one or more reporting periods.
Forwards a statement of sales made by Agents to each BSP Airline. This statement is
compiled from the information of one or more reporting periods.
Monitors ET ranges and provide replenishment as necessary.
[Link]
The Agents makes just one net remittance covering all its BSP transactions for that period
for all BSP Airlines. The BSP preferred method of payment by is by direct debit.
[Link] up by Airlines
The accounting department of each airline audits incoming data and addresses debit/credit
accounting memoranda (ADM/ACM) to agents as necessary.
Capping:
The policy setting an official limit on the amount of money that someone
Can spend or charge.
Risk factors on capping distribution:
Capping distribution is a vital action for distribution ticket of an airlines
to its agents. However, improper handling of capping may cause of
losing revenue for an airline. Following risk factors to be noted while
distribution of capping:
Bank Guarantee of an agent to BSP.
Average sale of an agent against its bank guarantee.
Nature of sale of an agent: Case Sale or Credit Sale.
Number of subagents.
Sales distribution policy.
Dedicated to a particular Airlines.
How to overcome risk factors on capping distribution?
It is hard to predict the nature of an agent who could be defaulted in market. However,
following factors can mitigate the capping risk and also considered as guiding
arrangement on Agent’s sale.
Agent monitoring report from BSP.
Monthly/Quarterly performance evaluation.
Monitoring Sales pattern. ( offering undercut market fare)
Monitoring total sales volume subject to depositing bank guarantee to BSP.
Sales dependency on Sub-agent.
Monitoring the sales on credit to sub-agent or clients.
Monitoring the sales amount utilization through capital investment.
Commercial Agreements
Definition:
A commercial agreement is a contract typically between two business entities. A commercial
agreement is a legally binding contract between parties where both are required to do
particular activities or refrain from doing something. They can be found in a variety of business
types, including industrial, corporate and retail.
Types of commercial agreement in aviation: There are various commercial agreements can be
done to grab a business in aviation sector. These agreements can be as follows:
Unilateral agreement.
Bilateral agreement.
Multilateral agreement.
A Unilateral contract is an agreement which one-sided ; in other words, one person makes a
promise to do something while the other does not take action immediately. Rather, the other
party will act in the future.
Examples: A restaurant advertises that they will give you a free meal if you eat a five-pound
steak. You agree and eat the steak. After you eat the steak, the restaurant then must five you
the free meal as promised.
A bilateral contract is an agreement between two parties in which each side agrees to fulfill
their side of the bargain.
Examples: An air transport agreement (also sometimes called an air service agreement or ATA
or ASA) is a bilateral agreement to allow international commercial air transport services
between signatories.
A multilateral Contract is an international agreement involving three or more parities for
national interest or commercial interest.
Examples: The IATA Multilateral Interline Traffic Agreement (MITA) is an agreement whereby
passengers and cargo use a standard traffic document (i.e. passenger ticket or air waybill) to
travel on various modes of transport involved in a routing in order to reach a final destination.
A number of agreement in Biman:
1. Ground Handing Agreement.
2. General Sales Agency Agreement (Passenger and Cargo).
3. Passenger Sales Agency Agreement.
4. Cargo Sales Agency Agreement.
5. Special Pro-rate Agreement (Passenger and Cargo).
6. Contract of Charter Flights.
IATA Baggage Resolution 302 related to baggage provision
1) Baggage provision are defined as free baggage allowance rules and baggage charges.
2) For the purposes of baggage provision selection, the following four-step process should
apply for interline journeys:
[
a) Step-1:
If the published baggage provisions among all participating carriers are the same;
these provisions will apply.
b) Step-2
Where the one or more published baggage provisions differ between participating
carriers, apply any common provisions and where provisions differ, the published
baggage provisions of the Most Significant Carrier (MSC).
(In case of codeshare flights this will be the Marketing Carrier unless that carrier
publishes a rule stipulating that it will be the Operating Carrier).
c) Step-3
If the MCS does not publish baggage provisions for the journey concerned, apply the
published baggage provisions of the carrier accepting the baggage at check-in.
d) Stap-4
If the carrier accepting the baggage at check-in does not publish baggage provisions
for the interline journey concerned, apply the published baggage provisions of each
operating airline sector –by sector.
MOST SIGNIFICANT CARRIER (MSC):
a) For travel between two or more IATA areas, the carrier performing carriage on the
first sector that crosses from one area to another.
b) For travel between IATA Tariff-sub areas, the carrier performing carriage on the
first sector that crosses from one sub-area to another.
c) For travel within an IATA Tariff-sub areas, the carrier performing carriage on the
first international sector.
IATA are/IATA Tariff sub-area:
IATA defines the world into 3 areas (IATA area 1/2/3) and defines the IATA area into small areas
Area IATA Area sub-areas
*North America (USA, Canada and
IATA Area1 Mexico)
North America/South America/Hawaii etc. Caribbean Islands
Central America
South America (Brazil , Chile, Peru
etc.)
IATA Area 2 Europe
Europe/Middle East etc. Middle East
Africa
IATA Area 3 Japan and Korea
Japan/Korea/Thailand/Singapore/Philippines/India South East Asia (China, Singapore,
Guam etc. Thai, Vietnam, Guam etc.
South East Pacific (Australia, New
Zealand etc.)
