IATA Aims to Establish Cuban BSP Next Year

IATA is hoping to establish a Billing and Settlement Plan (BSP) next year in Cuba in anticipation of exponential growth in the country’s travel market.

There are four IATA-accredited agents with more than 100 branches in Cuba.

IATA estimates there were about 300,000 outbound travel departures in 2014, a small number for a population of 11 million. With relations between the United States and Cuba thawing and other developments, IATA believes the market could be 10 times larger in two decades, with one in four Cubans traveling by air.

The association said establishing an IATA BSP would facilitate growth in outbound sales. But the plan faces some challenges, according to Tony Tyler, director general and chief executive officer of IATA, not the least of which are Cuba’s banking and currency systems.

Cuba has a dual currency system: the Cuban peso, which circulates domestically, and the convertible peso, or CUC, which can be purchased at government exchange offices.

At official exchange offices, the rate is about 25 pesos per CUC. But state and foreign companies must exchange CUCs at a one-to-one rate. So the same item that equates to about $1 for those paying in CUCs would equate to 4 cents for those paying in pesos. The system is viewed as a serious impediment to outside investors, and the Cuban government is working to end it by the end of the year.

At a recent press conference in Havana, Tyler said IATA will be working with Cubana, Cuba’s airline, and the Cuban government to overcome these obstacles “in relatively short order.”

Cuba received 3 million tourists in 2014, while the smaller Dominican Republic received 5 million.

In his speech, Tyler noted that the Havana airport terminals and airfield are “in need of major upgrades,” but such a project represents a “green field opportunity,” one that is unconstrained by prior development. “As a result, the implementation of global best practice technology and processes in Cuba has the potential to leapfrog to become a model in the region for modern air transport infrastructure.”

— Michele McDonald