The tourism and travel industry is one of the largest industry sectors in India. The International Air Transport Association (IATA) is responsible for regulating the aviation travel industry worldwide. Entrepreneurs aiming to become a travel agent or start a travel agency business can obtain an IATA accreditation or registration.
The IATA registration will boost the travel business revenue. The IATA-certified travel agency businesses can issue airline tickets on behalf of airlines. Thus, it simplifies booking processes and cuts expenses for both travel agency businesses and airlines.
IATA Registration Benefits for a Travel Agency Business
The IATA accreditation helps build and grow the business relationship between travel agents of the business and airlines. Following are the benefits of obtaining an IATA registration by travel agency businesses:
- Access to IATA airline members with a single sales agency agreement that authorises domestic and international tickets sale.
- Access to IATA’s Billing and Settlement Plan (BSP), an interface for payment and invoice between the airlines, agents and transport providers.
- Unique identification across the global travel industry with the IATA numeric code.
- Use of the IATA accredited agent logo on-premises and website that provides visibility and credibility amongst customers and vendors for the business.
- Agent staff eligibility for the IATA/IATAN ID card that gives access to the special deals of over 1000 suppliers.
- Standardised procedures to ensure fair dealings with the airlines.
Necessary Registrations to Establish a Travel Agency Business
The following business registrations are required to establish a travel agency business in India:
- Business registration as one of the following:
- Private limited company.
- Limited liability partnership.
- One person company.
- GST registration.
The IATA registration is not mandatory for becoming a travel agent or establishing a travel agency business. However, having an IATA registration can boost the revenue and provide credibility to the travel agency business. The IATA registration shows the potential customers and vendors that the business is an accredited travel agency.
IATA Accreditation/Registration Requirements
The below criteria needs to be met by the applicants for obtaining IATA accreditation:
- The applicant must have qualified staff in its employment competent to sell international air transportation, issue electronic travel documents and report it to the BSP.
- The applicant must have business premises required for a travel agency business.
- An applicant must provide sufficient security for its business and standard traffic documents in its possession.
- The applicant must be financially sound and obtain a satisfactory financial evaluation.
The financial record and standing of the applicant play a significant role in the IATA accreditation process. In India, satisfactory financial evaluation for IATA registration is done based on the audited accounts of the travel agency business, which are as follows:
- There must be positive net equity.
- The net equity divided by long-term debt and other long-term liabilities must be greater than 0.5.
- EBITDA (Earnings Before Interest, Taxation, Depreciation, Amortisation and extraordinary items) must be positive except in exceptional circumstances.
- The EBITDA must exceed the interest payable by a factor of a minimum of two and ideally three.
- Adjusted current assets must exceed current liabilities.
The above financial information of the applicant will be extracted from the audited accounts of the business. Further, all agents/travel agency businesses should give financial security during the first two years as an agent. All travel agents/travel agency businesses must provide minimum financial security of USD 50,000 to be accredited as IATA agents.
Accreditation/Registration Process for a Travel Agency Business
Once the applicant (travel agents/travel agency businesses) meets the IATA accreditation criteria mentioned above, they can apply for IATA accreditation/registration. The process to get IATA accreditation is as follows:
- The application should visit the official IATA website and click on the ‘Create a User’ button.
- A page will open for registering on the IATA customer portal. The applicant needs to enter the details and register on the IATA customer portal.
- After registering on the IATA customer portal, the applicant must visit the official IATA website.
- Next, the applicant must click on the ‘Login’ button and log in to the IATA customer portal by entering the email and password.
- On the IATA customer portal, click on the ‘Accreditation Application’, fill the form and submit it along with the documents. Alternatively, the applicants can download the application form by downloading the ‘Accreditation Kit’ from the IATAN website, fill the form and submit it.
- The applicants need to pay the accreditation fee.
When the application is approved, the IATA accreditation will be sent to the applicant.
Documents Required for IATA Registration
The following documents must be notarised and submitted along with the application form:
- Proof of company registration
- Bank statement of company accounts
- IATA recommendation letter from GDS
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