Default (IATA)

A default, in BSP terms, is the formal outcome when an agency fails to settle what it owes. The most common case is a Payment Default, where the agency has not remitted All Amounts Owing by the Remittance Date. That date is set in the BSP calendar, and the agency receives a remittance notice with its billing reports 57.

Once a Payment Default occurs, IATA acts immediately. It informs all BSP Airlines, sends a Notice of Payment Default through the IATA Customer Portal that includes termination notice of the Passenger Sales Agency Agreement, and demands accounting and remittance of everything owed. It also notifies local airline representatives and the agency's system providers, and bills the agency for charges caused by the incomplete remittance 1. Airlines then have a maximum of 30 days to submit ADMs or ACMs for the final accounting 1.

If the agency's guarantee does not cover the debt, each airline receives a prorated share in proportion to its share of the billing 3. In addition, a default or insolvency can make all monies immediately due 2.

In practice, the agency should:

• check the BSP calendar regularly and keep enough funds in the designated account, especially under direct debit 57;
• if a billing has not arrived by the Remittance Date, remit the amount its own records show and pay any shortage immediately once the billing arrives, since a late shortage counts as an overdue remittance 8;
• register any billing dispute with the Agency Administrator with written evidence, which prevents irregularity or default action in the cases the rules describe 4.

If a default is withdrawn, the agency is reinstated and related clearing bank charges are cancelled 4.