IATA shuts Nationwide back-office

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 03 Dec 2007

The Geneva-based International Air Transport Association (IATA) has suspended Nationwide Airline from participation in its billing and settlement systems. The global industry association says the move follows confirmation on Nationwide`s Web site on Friday that it had suspended operations.

"IATA provides several services to its members, one of which is the handling of funds - on behalf of participating airlines - which have been paid by passengers (cash sales only) to IATA-accredited travel agents and subsequently to airlines," the organisation says in a statement.

"Under the operating rules of the service, known as the IATA Billing and Settlement Plan (BSP), in the event an airline ceases operations, IATA suspends the airline from participation in BSPs, freezes all funds that are being processed, consults with the suspended airline, and implements its procedures on further disposal of the funds," IATA adds.

"Suspension of the airline means that transactions relating to Nationwide`s tickets cannot be processed through the BSP; this is done to protect the settlement system."

SA IATA spokesman Linden Birns adds that Nationwide remains part of IATA and emphasises that its membership "has not been cancelled, withdrawn or suspended".

The practical effect of this, Business Day reports, is that the tickets are now considered void and that Comair, which initially offered to honour the tickets on British Airways and kulula.com flights, had to backtrack.

Waiting to fly

The IATA suspension will be lifted when Nationwide resumes flying. Airline CE Vernon Bricknell yesterday said he hoped that would be as soon as today.

Nationwide was grounded on Friday morning after the Civil Aviation Authority (CAA) suspended the airline`s maintenance licence and the airworthiness certificates of its 16-plane fleet.

The CAA says the grounding was over safety concerns arising from the airline`s annual aircraft maintenance organisation (AMO) licence renewal process. The airline`s alleged failure to fix deficiencies identified during this process was compounded by its failure to comply with airworthiness directives issued in response to the "engine incident" in Cape Town early last month. A Johannesburg-bound Boeing 737 lost one of its two engines on take-off during this incident.

Nationwide CE Vernon Bricknell denies the concerns are safety-related, saying instead they relate mostly to administration, as well as data capturing and storage process in the AMO.

"We have since put a team of 12 people, which is an oversight body, to overlook all our operations and every discipline," he told a press briefing yesterday.