IATA – International Air Transport Association
The International Air Transport Association is a trade association of the world’s airlines founded in 1945 in Havana/Cuba. It is the successor to the International Air Traffic Association, which was formed in 1919 at The Hague, Netherlands.
IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organized tariff conferences that served as a forum for price fixing. It is headquartered in Canada in the city of Montréal, with executive offices in Geneva, Switzerland.
Airlines will benefit from being a member of IATA in many aspects.
Membership of Airlines
IATA is a non-government, international, non-political, non-exclusive association. Membership of Airlines in this association is not mandatory. In order to be a member of IATA, one airline should have scheduled flights and the government of that airline should be a member of ICAO.
There are two types of membership. “Active member” who has international flights and “Associate member” who perform flights in domestic routes of own country.
Interline Agreement
One of the services IATA is offering to its members is “Interline Agreements”. This is an agreement between two airline who wish to work together and move passenger and cargo in their flights to increase their network and gain more business and revenue.
It is a way of partnership which allows two airlines to share their services and offer to the passengers and cargo owners. The passenger will check in once through the whole route of the flight and delivers the baggage at origin and receive it at destination without having collect it at transit points.
IATA helps to prepare a contract for two airlines, enabling them to easily made this partnership together. This contract is called “Interline Agreement”.
One step forward in airlines partnership will be “code-share flights” that airlines placing their codes in each other flights. The next step will be “joint venture” to make a bigger airline, cooperating on everything like pricing, scheduling and sharing revenue.
IATA Clearing House – ICH
Once two airlines come into partnership, several factors in accounting will happen. Different routes, pricing, sales reports, transferring money among each other, …. will make it quite difficult for the airlines to control their financial issues amongst each other.
IATA formed a “Clearing House” to perform fast, secure and cost-effective billing system among the airlines. ICH offers a dispute mechanism of billing and in case of bankruptcy and cease of operation.
Messaging among airlines
Airlines should be in contact with airport operator to have a fast and safe transport of passenger and cargo. They also need to be in communicate with each other to offer the service to their customers based on their interline agreements. This needs to have a multinational messaging system allowing them to talk in single language.
SITA – Société Internationale de Télécommunications Aéronautiques – founded in 1949 by eleven airlines. It enables the exchange of operational messages between airlines, airport operators, ground handlers and other partners. In 1989 computer reservations systems, aerospace manufacturers, tour operators, airfreight forwarders, airport authorities, and other organizations in the air transport industry began joining SITA as members.
IATA Areas
IATA divides the world to three different area as reflected below. This will help for better tariff coordination for the airlines. This also called TC1, TC2, TC3 i.e., Tariff Conference area 1, 2 or 3.
IATA Books – TACT
IATA have many different publications in air cargo industry. One of the useful publications are TACT books. TACT stands for “THE AIR CARGO TARIFF” books. The Air Cargo Tariff and Rules (TACT) provides air cargo professionals with the comprehensive information they require to efficiently transport air cargo worldwide in form of air cargo rules, regulations, rates and charges.
TACT rates books are in two copies. RED book, which contains rates to/from Canada and USA to rest of the world and GREEN book which contains the rates all over the world expect North America.
The books also contain information about airline codes, airport and city codes, shipper’s responsibilities, regulations of how to issue the Air Waybill, airport information by countries, etc.….
Participating Airline whose names are reflected in the books are following the rates and charges offered from their base as origin airport to destination airport mentioned in the TACT rates.