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IATA Explained: The Role of International Air Transport Association in the Aviation Industry

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IATA Explained: The Role of International Air Transport Association in the Aviation Industry

In 2016, the McLaughlin-Sherouse List was published, which ranked all industries in the US according to RegData’s Industry Regulation Index showing the most regulated ones. Scheduled air transportation with its 13,307 restrictions was ranked 6th, closely followed by – surprisingly – the fishing industry (for the record: The first, prize-winning positions were given to petroleum manufacturing and electric power generation).

You definitely don’t need to know all the 13k+ regulations if you go fishing to the nearest lake on the weekend or take a flight to Florida for a Christmas vacation. However, if you are a part of the industry as a professional, you must get familiar with the rules of the game – and know who sets them. So, let’s talk about IATA – one of the main regulators of the aviation industry.

air traffic controls the sky

Someone has to be in control. Source: Fine Art America

What is IATA?

IATA or the International Air Transport Association is a global trade association of airlines (both freight and passenger carriers) that regulates the aviation industry by developing standards, procedures, and practices. As of today, its members are 290 airlines in 120 countries comprising around 82 percent of total air traffic.

If you feel more comfortable with video content, watch our 9-minute explainer of IATA’s history, functions, and role in the industry. For more details, keep reading.

IATA overview

Brief history of IATA

1919 was called “the year of the world’s first international scheduled services” because of the International Air Traffic Association creation. Its main areas of concern were the technical and legal issues, and a lot was done in those early days to set tech and safety standards and create a solid legal basis. However, many questions remained untouched, especially the ones related to rates, itineraries, schedules, and revenue from connecting flights.

In 1944, the International Civil Aviation Organization (ICAO) was formed as an intergovernmental body to tackle the existing issues, provide economic regulation, and manage air traffic. However, it failed to solve all the problems.

So, in 1945, the representatives of 57 airlines formed IATA to address the challenges of developing tariffs and fare rules, allocating revenue, creating global flight schedules, and much more.

Today, the international scheduled air transport industry is over 100 times larger than it was in 1945, not the least due to regulation of IATA which keeps working hard to make air operations safer and more efficient.

IATA’s mission and main purposes

As stated on the official IATA’s website, its mission is “to represent, lead, and serve the airline industry”. It means that IATA advocates for the interests of airlines on the world stage as well as creates industry standards that

  • simplify processes,
  • increase safety,
  • enhance passenger convenience,
  • reduce costs,
  • improve efficiency, and
  • help achieve sustainability goals.

This way, IATA regulations benefit all parties involved, i.e., airlines, travel agents, passengers, customers, ground handlers, and others. IATA also offers expert services, professional support, and educational options to industry stakeholders.

IATA vs ICAO vs FAA

To give you a fuller understanding, IATA isn’t the only regulating body in the aviation world. The aforementioned ICAO, being a specialized agency of the United Nations, is also an important formation. In contrast to IATA that was initially formed as a trade association to represent airlines, define fares, and provide settlement services, ICAO’s primary task was establishing regulations (though IATA somewhat pulls the blanket over itself).

Today, both of them work on developing industry regulations and enhancing flight safety and efficiency, but their focus areas differ. We can say that ICAO mainly defines standards for member nations (e.g., cross-border procedures or airspace boundaries), while IATA sets rules for member airlines (e.g., baggage allowances or fare policies).

There’s also the Federal Aviation Administration (FAA) which is the United States Department of Transportation agency that oversees civil aviation in the US. It’s particularly concerned about air traffic management, aircraft manufacturing and maintenance procedures, airport facilities compliance, pilot and airmen certification, technology development, and so on. Oh yeah, commercial space transportation is also under their wing.

Now that you’ve got a general idea of what IATA is, let’s go over its main activities. In our overview, we’ll stick to the categories suggested on its official website.

IATA's main areas of focus

IATA’s main areas of activity

IATA programs: standards and regulations of different air transportation aspects

The Programs section includes a wide range of initiatives that regulate various aspects of the commercial aviation industry.

Cargo: regulating and digitizing air freight

Interesting fact: Every day, on average, 657 million shipments worth $18.6 billion are transported by 100,000 planes, including 80,000 flowers and 200 race horses. Sounds impressive, right?

Obviously, such cargo volumes and diversity demand close attention to every detail, taking into account the unique requirements of some categories – and apparent potential danger of others. So, IATA sets compliance standards that concern the safe transportation of

  • medical/pharma items,
  • dangerous goods,
  • live animals, and
  • perishables (read about the specifics of cold-chain logistics in our dedicated post).

Besides, within the scope of air cargo regulation, IATA focuses on the following initiatives.

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Digital cargo addresses the inefficiency of manual processes and aims at increasing connectivity and driving innovations. The initiatives here include e-freight/eAWB, Cargo Connect, ONE Record, and Interactive Cargo.

The Cargo Operations category provides guidance on safe and efficient handling of goods in the airports, suggests recommendations for building cargo facilities, regulates warehouse activities, and so on.

Cargo Border Management focuses on facilitation of global trade and logistics through IATA’s cooperation with customs, international organizations (ICAO, UN, WCO, WTO), and national regulators.

Cargo Sustainability includes projects that address climate change, gender imbalances, and other social issues.

evergreen cargo ship on balloons

Sometimes it’s better to send stuff by airmail. Source: AlahedNews

Passenger experience: streamlining airport procedures and adopting biometric recognition

Since global passenger traffic is expected to double by 2037, IATA and other industry organizations work on establishing standards to accommodate such volumes and streamlining airport procedures. The One ID initiative aims at facilitating passenger identification through paper-free, contactless biometric recognition technology. Read our article describing airlines’ self-service solutions for more innovation stories.

Distribution and payment: implementing NDC and regulating interlining flights

This part is about IATA trying to simplify and enhance the customer shopping and purchasing experience both before and during the flight. One of the main initiatives here is New Distribution Capability (NDC) – a new data exchange standard that allows airlines to deliver rich content and ancillaries to their customers.

Other projects concern regulating connecting flights (see Multilateral Interline Framework), working on rates that change dynamically (read about dynamic pricing here), and addressing other transaction-related aspects.

How flight pricing works

Environment: working towards sustainability goals with Fly Net Zero, SAF, and offsets

Today, aviation is one of the major sources of greenhouse gasses that cause irreversible climate changes, so IATA and member airlines adopt various strategies to reduce the harmful impact and decarbonize their operations.

In 2021, IATA member airlines signed a resolution committing to achieve net-zero carbon emissions from their operations by 2050. To reach this ambitious target, IATA developed a strategy that involves a combination of methods.

  • Sustainable Aviation Fuel (SAF) usage that minimizes emissions should account for 65 percent of the result.
  • Offsets (read about Carbon Offsetting and Reduction Scheme for International Aviation or CORSIA in a separate article) and carbon capture programs are supposed to comprise another 19 percent.
  • New digital and engine technologies (electric and hydrogen) should contribute 13 percent. Learn more about the role of technologies in making the travel industry greener in our dedicated post.
  • Improving infrastructure and operational efficiencies will presumably comprise 3 percent of the total change.

Other IATA’s green initiatives include managing cabin waste, combating wildlife trafficking, and educating passengers.

Our vision of green travel

Safety: improving operations for utmost security

Despite many people’s aerophobia (that’s when folks are afraid of flying – you probably know a person or two who never dared to go on a vacation abroad), planes are the safest means of long-distance transport ever. Airlines have been constantly improving their equipment and practices to maximize their safety records. As a result, in 2018, the accident rate was 1.35 per million flights – compared to 27.2 in 1960!

no airplane mode before crash

Epic fail. Source: boredpanda

Funny enough, the safer aviation gets, the harder it becomes to improve it because there’s less areas for enhancement. But still, IATA has lots of specialized programs that focus on

  • operational safety – as the primary concern of all airlines – that oversees cabin activities, runway procedures, in-flight processes, fatigue management, and so on;
  • corporate safety to improve performance and mitigate risks;
  • safety audit to assess the implementation of developed policies and procedures;
  • customer feedback collection for anyone who wants to make suggestions or communicate their concerns;
  • data management to analyze issues and identify potential risks, and much more.

airman fixing plane engine with duct tape

Looks pretty bad, though, for the record, it’s not a usual duct tape, it’s a very specialized speed tape that costs up to $1000 per roll and is used as a temporary fix of minor damages. Source: MEME

Operations and infrastructure: optimizing daily workflows

Passengers grumbling about tight baggage allowances are also the result of IATA’s activity. Airlines always strive to increase operational efficiency both on the ground and during the flight, so IATA develops standards that regulate

  • technical operations (optimizing and digitizing technical aspects, maintenance, and parts management);
  • baggage services (it’s not only about the suitcase sizes but also about tracking luggage and managing lost and found items);
  • ground operations (designating procedures to maximize the safety and efficiency of ground handling activities);
  • pilot and maintenance technicians training (developing programs for flight crew and tech staff training, licensing, and assessment); and
  • fuel management.

weird baggage rules

Those rules. Source: boredpanda

IATA also works with airports on standardizing, digitizing, and optimizing air traffic management and airport infrastructure.

Aviation security: enhancing safety through global cooperation

The aviation security section addresses the safety aspect through close collaboration with governments and international organizations. Such partnership has to tackle existing and potential threats and vulnerabilities by developing and implementing global standards. Some of the initiatives concern innovating and adopting modern screening detection technologies, while others focus on data sharing or address cybersecurity issues.

The innovation hub: transforming the aviation industry

The innovation hub is where you can learn of and take part in, well, IATA’s innovation projects. These activities are governed by the Digital Transformation Advisory Council (DTAC) and include

  • Accelerate@IATA that connects airlines and innovative startups,
  • Hackathons that give a chance to talented developers to share their new ideas and solutions,
  • Think Tank that unites ideation teams that work on new initiatives, and so on.

Besides, that’s where you can find IATA’s developer portal where external IT specialists can find tech documentation, get access to APIs and NDC guidelines, obtain certification, etc.

IATA’s services: products and solutions for the aviation industry and its partners

The Services section mainly caters to those who work with airlines, i.e., travel agents, freight forwarders, airports, ground handlers, and other industry partners. As the name declares, it’s not about the regulations or telling others what and how to do but about supporting collaboration and providing instruments for efficient operations. Here’s what IATA offers.

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IATA number: accreditation for travel agents and cargo professionals

Being IATA-certified means a lot for travel agents. Besides joining a community of over 54,000 members operating in 217 countries and territories, the IATA number gives travel agents the power to issue tickets on behalf of airlines, grants access to the Billing and Settlement Plan (BSP), and brings along industry recognition and credibility acknowledgment.

Check our detailed article on how to get that IATA certification if you want a step-by-step guide.

It’s a similar story about getting IATA’s Cargo Agent accreditation. It gives companies involved in the air freight industry global recognition of financial and professional competence.

Data & Statistics: sharing industry data and insights

IATA collects massive amounts of diverse data from airlines, airports, travel agents, and other industry players. Data categories are

  • Passenger traffic data,
  • Cargo data,
  • Safety and MRO solutions,
  • Travel agent data, and
  • Surveys.

Information allows you to get a complete picture of passenger and cargo flows, identify and analyze market trends, benchmark your own company, and make data-based decisions.

Some datasets are available for online purchase (e.g., monthly airline traffic statistics), while other tools can be accessed online or through API integration (e.g. Global Agency Directory).

For example, for carriers, IATA offers a Direct Data Solutions (DDS) tool to get access to a global dataset of airline sales, market, and itinerary data. Airlines can connect via APIs, use a web-based analytics tool, or receive regular reports. By the way, if you’re interested in flight APIs, we got all sorts of them for you.

Compliance solutions: ensuring standardization and compliance

IATA provides instruments that help industry players comply with standards and regulations. These tools include

  • DG AutoCheck for those dealing with dangerous goods;
  • The Air Cargo Tariff and Rules (TACT) is the most current collection of air cargo market information such as rates, rules, compliance regulations, and schedules;
  • Integrated Management Solutions (IMX) is a software platform developed for airlines and ground handlers that helps collect, manage, and analyze quality and safety data;
  • Timatic is the fullest collection of travel requirement rules.

These products can help optimize various cargo, passenger, and ground handling operations, provide most current regulations data, and ensure companies compliance with industry standards.

Financial services: settlement systems and other financial instruments

To facilitate transactions between the air industry stakeholders, IATA provides a number of financial instruments. Thus, for airlines, there’s a whole Settlement Services (ISS) toolkit:

  • Billing and Settlement Plan (BSP) to settle passenger sales with travel agents,
  • Cargo Account Settlement Systems (CASS) to settle freight payments with freight forwarders,
  • IATA Clearing House (ICH) for debt collection,
  • IATA Exchange Rates to support interline billing and establish tariffs, and much more.

In addition, there’s an e-invoicing (Simplified Invoicing and Settlement) system which is a digital platform that helps make invoicing procedures completely paperless. There are also tools for payment management, cost optimization, card fraud detection, data exchange, and more.

how travel freaks buy tickets

Amen to that. Source: CHEEZburger

Similarly, IATA offers digital financial helpers to travel agents, airports, and industry partners. In this section, you can also find Air Pulse which is IATA’s financial and distribution news portal.

IATA Consulting: sharing expertise and experience

Obviously, during 70+ of its existence, IATA has gained unbeatable expertise in all possible aspects of the air industry. So now, its specialists help airports, airlines, tour operators, travel agents, freight forwarders, and other companies understand the market, optimize operations, and grow their businesses.

IATA’s offers a wide range of consulting services within such scopes as

  • revenue enhancement,
  • safety and flight operations,
  • air cargo traffic forecasting,
  • NDC,
  • fuel management,
  • sustainability strategy,
  • airport development, and much more.

If you want to take advantage of IATA’s unrivaled industry knowledge, you have to contact them for further information on such partnership via this contact form.

IATA codes: an industry recognized identification system

IATA has developed several coding systems to facilitate identification of airports, airlines, luggage, and so on. You can utilize their free Airline and Location Code Search online tool or purchase the Airline Coding Directory to have the coding information in your business management system for commercial purposes such as ticketing, cargo documentation, etc.

Advertising: marketing and sponsorship opportunities

If you want to advertise to the aviation industry, IATA offers a lot of options to promote your brand, product, or service. You can select one or several formats (printed publications, website, or email) to make your marketing campaigns global or highly-targeted and personalized. Check out their Media Kit for options and pricing or contact them directly for full information.

IATA training: education and certification programs

You can visit IATA’s Training section if you want to add a certificate or diploma in one of the air industry subject areas to your resume. You can choose live or online training, opt for in-house education or study yourself. Assessment is also conducted in various formats, i.e., live classroom, live virtual, online supervised, or unsupervised.

IATA also has an international network of over 450 partnering institutions where you can obtain in-depth, aviation business-centric knowledge in the chosen area – from air navigation to airline business management to environment protection.

Other useful resources

In addition to all the valuable information and handy solutions we described, IATA’s website contains a few more useful sections we’d like to mention.

The Events page announces all the upcoming conferences, exhibitions, and industry meetings.

The IATA Customer Portal is where you can create an account that gives access to IATA’s services, direct communication channels, special offers, and more.

The You & IATA section categorizes information and solutions in the visitor-centric way. It means that if you are, for example, a freight forwarder or a travel agent or just a bored traveler stuck in the airport for a long layover, you can choose the relevant category and find the products or services IATA can offer to you. Try it out and we’re sure you’ll get a lot of new, interesting, and valuable information from the leading aviation industry regulatory establishment – IATA.

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