BSP — Billing and Settlement Plan

BSP — Billing and Settlement Plan

The BSP is the financial backbone of the airline–travel agent relationship. Rather than each travel agent settling with each airline individually, the BSP provides a single pipeline through which all ticket sale proceeds flow.

How BSP Works

The BSP process: (1) A travel agent issues a ticket through the BSP system. (2) The agent reports sales data to the BSP at regular intervals. (3) The BSP calculates the net amount owed to each airline. (4) The agent makes a single consolidated payment to the BSP. (5) The BSP distributes funds to the respective airlines.

BSP vs ARC

BSP operates in most countries worldwide through IATA. In the United States and Canada, the equivalent system is ARC (Airlines Reporting Corporation), which operates independently of IATA but with similar settlement mechanics.

Agent Accreditation

Travel agents must be IATA-accredited to participate in the BSP. Accreditation requires financial guarantees (a bank guarantee or insurance bond) to protect airlines against agent default. IATA's TIDS (Travel Industry Designator Service) provides non-accredited agents with a means of identification.

Electronic Miscellaneous Document

The BSP also processes EMD (Electronic Miscellaneous Documents) — the electronic document used to account for ancillary charges such as excess baggage, upgrade fees and service charges that do not form part of the base ticket.