Last week, the International Air Transport Association (IATA) suspended Cubana de Aviación from its Billing and Settlement Plan (BSP), leading some to believe the airline may cease operations. Yesterday, the State Cuban airline shed some light regarding its immediate future. Let’s investigate further.
What’s the IATA’s BSP, and why is it important?
Cubana de Aviación was suspended from IATA’s BSP in Spain only. The BSP is a system designed to facilitate and simplify travel agencies’ selling, reporting, and remitting procedures.
In a nutshell, the BSP is the central point through which data and funds flow between travel agents and airlines. Travel agents make one single payment to the BSP covering all the airlines they work with. Then, the BSP collects the money worldwide from many agents and makes one consolidated payment to each airline.
When an airline is suspended from the BSP, it is a big deal because it shows that the carrier faces financial trouble.
For example, IATA suspended the Mexican low-cost airline Interjet from its Billing and Settlement Plan last year. Not long after, Interjet ceased operations, and it is currently in a bankruptcy process.
What other carriers have IATA suspended from its BSP?
At least 15 additional airlines (including Cubana) have been suspended from IATA’s BSP in the last two years. These are Peruvian Airlines, Adria Airways, XL Airways, Aigle Azur, Avianca Brazil, Jet Airways, Far Eastern Air Transport, Andes Lineas Aereas, Flybe, LIATA, Avior Airlines, Air Namibia, Air Italy, Montenegro Airlines, and Cubana de Aviación.
Of these 15 carriers, only LIAT, Avior Airlines, and Cubana de Aviación still fly; nevertheless, LIAT is in a bankruptcy process, and Avior Airlines face many issues due to the economic crisis in Venezuela.
There’s a phrase that says, “there’s no smoke without fire”. So, what’s going on with Cubana de Aviación?
What’s going on with Cubana de Aviación?
On its website, the Association of Canadian Travel Agencies (ACTA) wrote,
“Please be advised that Cubana de Aviacion (CU-136) has been suspended from BSP Spain due to the impossibility for our Clearing Bank to provide services to Cubana de Aviacion, as a consequence of the United States economic sanctions.”
Likewise, Cubana de Aviación said IATA’s suspension isn’t related to a possible cessation of operations. Instead, it is a new effect of the economic embargo led by the United States. The carrier wrote on its Facebook website,
“The bank that files the compensations has informed that it can’t continue due to the American embargo. This suspension doesn’t hold us from honoring the contractual compromises we have with our clients. The airline will adjust its commercial strategies in the market.”
Moreover, Cubana filed a complaint with IATA due to the BSP suspension.
How’s Cubana doing at the moment?
Cubana de Aviación has been facing a crisis for quite some time now. Currently, due to the COVID-19 pandemic, Cubana is operating 67.7% fewer flights than it had in August 2019, according to data provided by Cirium.
In August, the carrier has scheduled 206 flights, offering 20,886 seats across six routes. Two years ago, the airline had 22 routes.
According to ch-aviation, Cubana has a fleet of 18 aircraft. Only two are currently active, both Il-96-300. The airline also has two ATR-72-200, one ATR-42-500, two ATR-200, six AN-158-200, four Il-96-300 (including the two active), one TU-204-100, and two TU-204-100E. (https://simpleflying.com/cubana-iata-billing-plan/)