This is a guest article by Amadeus for Developers
Large or small, every flight booking business must have two key processes in place: booking and ticketing. To consumers, booking a flight and receiving an e-ticket may seem like a single, seamless step, but for the business providing the service they’re actually two distinct and equally important steps.
A booking happens when you create a reservation on an airline Computer Reservation System (CRS) and get a booking reference number. For companies, this step is relatively simple - all you need is to access to a Global Distribution System (GDS) like Amadeus to get flight content and perform the bookings. However, this is only half of the story – your customer won’t be able to enjoy their flight until you issue them a ticket.
For full-service carriers, a ticket is the only truly valid travel document. It’s the ticket, not the booking reference, that secures your traveler’s right to their seat on the plane. And it’s at this step where many smaller booking startups face a stumbling block.
IATA and the dilemma for small booking companies
To complete a booking transaction, you need to provide your customer with a ticket. The question of ticket issuance inevitably leads to the International Air Transport Association (IATA), an organization comprised of nearly 300 member airlines across the world that, among other things, governs who can issue tickets on their behalf. To issue tickets for IATA airlines, you need official accreditation that grants you access to IATA’s payment processing mechanism, the Billing and Settlement Plan (BSP).
For many startups and smaller booking companies, the lengthy accreditation process and financial requirements – which can range into the tens of thousands of dollars – present a significant and often insurmountable barrier to entry. However, there are options.
In this article, we’ll explain how you can solve the question of ticket issuance and build your booking business without IATA accreditation.
Work with an airline consolidator
Airline consolidators are businesses that negotiate discounted fares from airlines in exchange for a commitment to sell high volumes of tickets. Consolidators resell these discounted fares, known as consolidator fares, to partner agencies in a win-win relationship – the consolidator adds a mark-up to the fare price, partner agents get access to attractive fares, and airlines get more passengers on board. In this sense, you can basically think of consolidators as flight ticket wholesalers.
While there are a few titans in the consolidator industry, most are smaller players specialized in air tickets for a specific country or are a part a larger organization – you may find consolidators as the hidden force behind a popular B2C online travel agency (OTA) or as the air purchasing agent of a tour operator.
Regardless of their form, all consolidators are accredited – they have access to the airline industry’s main payment mechanisms like IATA’s Billing and Settlement Plan (BSP) and the Airlines Reporting Corporation (ARC) and are licensed to issue tickets for IATA/ARC member airlines. For a fee, consolidators will act as ticketing partners for non-IATA agents and issue tickets on their behalf.
Ticketing with a consolidator
For most non-IATA travel agents, consolidators are the easiest and most effective way to handle ticket issuance. In this scenario, agents handle bookings entirely on their end and sign an agreement with a consolidator to issue tickets for the bookings they make.
In technical terms, agents perform bookings using their own GDS credentials and their own fares, whether they be public or negotiated. When a traveler books a flight, the agent creates a Passenger Name Record (PNR) and sends it to the consolidator, which reviews it, issues the ticket, and then sends the ticket to the agents to forward to the end traveler.
Here, agents have two main options for sending their PNRs for ticketing:
- Manual ticketing – for each booking, agents must contact their consolidator manually – by phone, email, SMS, etc. – and request that the PNR be ticketed. Given the ticketing time lag and the high degree of manual work involved, this option is unfeasible for most OTAs and startups.
- Automated ticketing – more commonly, PNRs are ticketed automatically. When agents perform a booking, the PNR is automatically sent to a ticketing queue linked to the consolidator’s GDS credentials. On the consolidator’s side, a ticketing bot automatically reviews the PNRs in the queue and, if everything is in order, issues the ticket. Some larger consolidators may even offer their own dedicated ticketing APIs to automate this exchange.
When ticketing automatically, it’s important to note that agents can work with multiple consolidators (e.g., if an agent is in international expansion and works with different consolidators in different markets). In this case, agents need to make sure that they configure their PNR queuing process to send the correct PNRs to each consolidator.
Post-booking services
In addition to ticketing, consolidators can also handle post-booking services like re-issuance, changes or cancellations.
In most cases, agents must handle most post-booking services manually and offline through the consolidator’s call center. However, some larger consolidators offer their own APIs so that agents can automate post-booking modifications or even offer their travelers the ability to manage their own bookings.
Refunds are an especially complicated topic and an important one to address when negotiating with a consolidator. As the consolidator receives payment for the ticket and transmits the money to the airlines via the BSP, they are technically responsible for providing refunds.
However, consolidators will usually only provide refunds to agents after they’ve first received a refund from the airline, leaving agents in a tricky position as the main point of contact for the customer. Compounding the issue, many consolidator fares are subject to stringent restrictions regarding cancellations, re-bookings or refunds.
Other services: booking with consolidator fares
Another benefit of ticketing with a consolidator is the possibility of accessing deeply discounted fares. To access these fares, agents must negotiate directly with the consolidator and they have several options at hand:
- Consolidators can ask airlines to file negotiated fares with the agents –airlines publish fares negotiated with each seller on ATPCO and these fares are then linked to the seller’s GDS credentials (in this case, the consolidator’s). To help agents access the fares, consolidators can ask the airlines to file the consolidator fares on the agent’s GDS credentials. However, most airlines will be unwilling to take on this additional workload, especially for smaller agents with lower booking volumes.
- Consolidators can let agents book with their GDS credentials – another option is for the consolidator to open their GDS credentials and discounted fares to partner agents. However, as the agent is booking using the consolidator’s credentials, all bookings will be attributed to the consolidator. This limits the agents’ ability to prove their booking volumes (important if they want to one day negotiate their own fares) and sets the agents up for complex financial negotiations as the consolidator will get all incentives and commissions from the agents’ bookings, something they may not want to relinquish easily.
- The agent books with its own fares and tickets with consolidator fares – the final option is for the agent to perform bookings with its own GDS credentials and fares and then issue the ticket at the consolidator fare, keeping the difference as profit. This is the most common scenario as it makes the travel agent less dependent on the consolidator and lets the agent build booking volume on his/her own GDS credentials.
Work with a host agency
Another option is to work with host agency, which is an umbrella organizations that provide services to a network of affiliated independent travel agents. Agents pay a membership fee, get access to wide variety of services ranging from ticketing to back-office support or even training and work for the host agency as independent contractors.
Unlike consolidators which are highly specialized in air travel, host agencies typically offer a wider range of content like hotels, cruises, package trips or tours, often at special rates from preferred partners. As they are not air specialists, this also means that they move lower volumes of tickets and tend to have less attractive fares.
Host agencies vary widely in their membership criteria and offer services catering to different agent profiles. For example, some host agencies are designed to help newcomers start a travel business from scratch while others require members to have deeper experience and existing business volumes.
Ticketing with a host agency
Stand-alone ticketing services are less common among host agencies than with consolidators, and many (though not all) host agencies offer ticketing services exclusively to member agents. For those that do offer purely ticketing services, the process is largely the same as with consolidators: Agents perform bookings on their own GDS credentials, then queue the PNR for ticketing with the host agency. The host agent then issues the ticket and sends it to the agent.
More commonly, however, agents will book and ticket using the host agency’s fares and GDS credentials (in fact, this pre-packaged GDS access is one of the core benefits of working with a host agency). As all booking are made using the host agency’s GDS credentials, the host agent will be the source of the bookings and receive any commissions or incentives.
While this does limit the agent’s ability to later prove their booking volumes, commission-sharing models with host agencies are more standardized and transparent than those of consolidators. This is due in large part to host agencies’ focus on non-air verticals with higher commissions like hotels or cruises.
Post–booking services
Managing post-booking services is generally easier with host agencies than with consolidators for several reasons:
- Post-booking services are included in host agency membership – most host agencies include post-booking in their member services, eliminating the need to define and negotiate post-booking services separately.
- Agents can handle post-booking services directly using the host agency’s GDS credentials – as agents typically use the host agencies GDS access to perform bookings, they can also handle post-booking modifications directly without having to go offline or incorporate web services.
Other services
One of the defining characteristics of host agencies is that they offer a wide array of technical, operational and business services that are designed to help member agents start a business regardless of their previous levels of experience, booking volume or technical know-how.
Aside from basic booking and ticketing services, host agencies might offer website templates, customer relationship management (CRM) tools, email marketing and even training sessions.
Ticket Low-Cost Carriers (LCCs): No IATA license needed
For legacy carriers, a ticket is essentially a proof of purchase, which is why IATA accreditation and access to industry billing systems like the Billing and Settlement Plan (BSP) or Airlines Reporting Council (ARC) are necessary. Low-cost carriers, on the other hand, are typically not affiliated with IATA and therefore don't require agents to have any kind of accreditation to issue tickets on their behalf.
While the only true way to book and ticket LCCs is via the airline websites (or the controversial practice of screen-scraping), you can also use LCC aggregator services like Pyton to book and ticket on over 100 low-cost carriers.
Conclusion
To be a top global player in the flight booking business, you’ll most likely need IATA accreditation at some point. But if you’re just starting out on your journey, you can work with a consolidator or host agency to get your business off the ground without facing the hurdles and expense of an IATA license.
Let’s recap the steps you to take to get started as a non-IATA booking agent:
- Connect to a GDS – first, you’ll need to connect to a GDS to access flight content and booking capabilities. Offline travel agents can work with a host agency to get GDS access, while online travel agents can connect to open APIs like Amadeus flight booking APIs. To incorporate low-cost carriers, which don’t require IATA to ticket, you can integrate an LCC aggregator like Pyton.
- Find a ticketing partner – next, you’ll need a way to issue tickets. For online booking businesses, the best bet is to work with a consolidator in your country that can issue tickets on your behalf. If you’ve decided from the start to work with a host agency, ticketing will be included in the membership.
- Choose your integration type – after choosing a consolidator, you’ll need a way to queue your PNRs for ticketing. This can be handled offline via the consolidator’s call center, but the best option to save time and money is to automate PNR queuing through your GDS.
- Decide post-booking services – consider what post-booking services – cancellations, changes, refunds – and make sure these are offered by your consolidator. If you’re working with a large consolidator, you may be able to let you traveler manage their own bookings via the consolidator’s own API.
With your flight content and ticketing in place, you can start focusing on what really matters: growing your business.
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