Become a IATA Travel Agent – IATA Registration

Published On - September 22, 2015

admin Business Registrations, Company, Compliance, Entrepreneur

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Become a IATA Travel Agent – IATA Registration

Travel and tourism is one of the largest industries in India. The rising middle class has created a lot of demand for travel and tourism products making the travel industry – one of the fast growing industries in India. Becoming a travel agent is a very good option for many Entrepreneurs and having IATA registration can boost the revenue of the business. In this article, we mainly look at the process for becoming a IATA Travel Agent and IATA Registration.

Becoming an IATA Travel Agent

To start a travel agency business, the following registrations would be required;

  • Business registration
    • Private Limited Company; or
    • Limited Liability Partnership; or
    • One Person Company;
  • VAT registration
  • Service tax registration

IATA registration is not a mandatory registration for becoming a travel agent. However, having an IATA registration can show potential customers and vendors that the business is an accredited travel agency – thereby boosting revenue and providing credibility.

IATA Registration Benefits

IATA accreditation helps simply the business relationship between travel agents and airlines. There are over 60,000 IATA travel agents worldwide, selling US$220 billion worth of airline tickets on behalf of some 250 IATA airline members. Some of the benefits of IATA Registration are:

  • Access to IATA airline members with a single Sales Agency Agreement which authorizes the sale of international and/or domestic tickets.
  • Access to IATA’s Billing and Settlement Plan ( BSP), an efficient interface for invoicing and payment between the agent, airlines and transport providers.
  • Unique identification throughout the global travel industry with the “IATA Numeric Code”.
  • Use of the “IATA Accredited Agent” logo providing visibility and credibility on premises and website.
  • Agent staff eligibility for the IATA/IATAN ID Card, giving access to the special deals of over 1000 suppliers.
  • Standardized procedures to ensure fair dealings with the airlines.

The use of the IATA Accredited Agent logo is a major draw for many of the travel agent and the following logo can be utilized only by IATA Accredited Travel Agents. Having the IATA Accredited Agent logo can provide credibility amongst customers and vendors for the business.

IATA Registration Requirements

While applying for becoming an IATA Accredited Agent, the following four criteria’s are evaluated:

  1. Financial record and standing Agent
  2. Staff qualifications
  3. Identification and accessibility of premises
  4. Security and procedures

The financial record and financial standing of the applicant plays a major part in the IATA accreditation process. In India, the criteria for financial evaluation of IATA registration application is as follows (All financial information used in the financial criteria will be extracted from the Agent’s Audited Accounts):

  • There must be positive Net Equity.
  • 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.

Further, all Agents must provide a financial security during the first two years as an Agent. An Agent will not be accredited or will not continue to be accredited until any Financial Security required to be provided to IATA has been received by IATA and confirmed to IATA by way of written confirmation received directly from the third party supporting the Financial Security that the Financial Security was issued and is valid. All travel agents must provide a Financial Security with a minimum amount of USD 50,000 to be accredited.

Obtaining IATA Registration

Once the applicant is satisfied that the business qualifies for IATA Accreditation, an application for IATA Accreditation can be made to the relevant office with the requisite fee
On satisfying the relevant requirements for IATA Registration, the travel agent would be IATA accredited.
To start or manage a business in India, visit www.complianceindia.co.in.