Back in the 1990s, conflict in Somalia meant airlines were forced to negotiate Somalian airspace without an air navigation service provider (ANSP) in the country. IATA arranged for air services to cover the region but needed a mechanism to collect and remit the appropriate overflight charges.
And so, the IATA Enhancement and Finance (E&F) service was born.
From this practical beginning, IATA E&F has evolved into an essential industry tool that continues to be leveraged to the advantage of the entire air transport ecosystem. The IATA E&F serves more than 80 authorities, including airports, air navigation service providers, and governments worldwide and generates more than 85,000 invoices for 4,000 operators yearly. The collection rate is over 97% and on-time payments are more than 90%.
“IATA E&F means a stable and predictable cash flow for airports and ANSPs, and a one-stop shop payable manager for airline operators,” says Elie El Khoury, IATA’s Head of Enhancement and Financing Services. “It provides a clear picture of the financial landscape for all parties and reduces the friction and cost of multiple touchpoints. Clients can focus on their future expansion projects, improving liquidity challenges, optimizing cash flow, and investing in new technologies. The result is streamlined airport and air traffic control operations that ensure both efficiency and safety in the skies.”
The IATA E&F market continues to grow, and the data is improving by the day. Add in new technologies and, for El Khoury, it becomes an opportune moment to reinvent the wheel.
IATA E&F has always benefited from continuous development. Automatic data upload and validation, data integration from additional sources, dynamic reporting, and regional credit card payment solutions are among the areas already witnessing improvements. These will soon be available to both clients and operators.
“But now, other areas are being carefully studied to see where we can add value and improve our service to all our clients," says El Khoury. “This includes simplifying the current platform architecture to enable the faster implementation of advancements, enhanced invoicing and dispute processes for better tracking, introducing artificial intelligence (AI) and machine learning with visual analytics, and blockchain for increased efficiency and transparency. We will also integrate with the IATA Cargo Accounts Settlement Systems to support cargo airlines’ payables and incorporate such new forms of payment as digital currencies.”
But it is greater collaboration that holds the key to the evolution of the IATA E&F service. El Khoury insists solutions—though they always align with IATA’s mission to represent, lead, and serve the airline industry—must always offer benefits to all partners, be it through cost reduction, greater operational efficiency, industry program support, or improved safety measures.
“Airlines are looking for enhanced clarity and transparency about their payables while airports and ANSPs require a higher collection rate to preserve a healthy cash flow and more detailed reports,” he says. “These are requirements that we can meet as we keep introducing new technologies and exploring potential partnerships with other industry players.”
There are challenges to overcome. Many organizations understandably like to retain control of invoicing and money collection, which are at the heart of a business and essential to a robust cash flow. It is also true that this is a competitive market with other settlement systems available. However, the IATA E&F service remains uniquely positioned at the heart of the aviation industry to provide state-of-the-art billing, invoicing, and collection services.
“Expansion of the IATA E&F is a complicated process,” El Khoury accepts. “But the service adds incredible value across the industry ecosystem. It is a win-win initiative. The data is rich and transparent, costs are reduced, and cash flow becomes predictable. The more airlines that support the service, the more data we will have to refine the IATA E&F even further for the benefit of all.”
IATA E&F is a fully outsourced service that collects aeronautical and non-aeronautical charges and taxes from airlines and general aviation on behalf of airports, ANSPs, civil aviation authorities, and governments. For customers, this means that far fewer internal resources are required to collect their receivables, though oversight is maintained through the data management system portal.
With a recently revamped, intuitive interface, this portal can be customized in multiple ways to meet client needs. Clients and, optionally, operators report their data through the portal, which is automatically reconciled. Errors, such as variances, duplicates, inconsistencies, and even typographical mistakes, regarding the aircraft fleet, MTOW maximum take-off weight, or flight details are detected and, where possible, corrected by the system.
IATA verifies this refined data before it is sent for billing and invoicing, maximizing accuracy, minimizing disputes, and accelerating collection. Clients can also extract the data for internal purposes.
To further ease cost and workload on operators, remittance can be made through IATA’s financial settlement systems or other payment methods as necessary.
IATA E&F’s success is based on its ability to provide value to all participants. With access to all IATA’s financial settlement systems—such as Simplified Invoicing Settlement for standardized aviation e-invoicing, the IATA Clearing House, and the Billing and Settlement Plan (BSP) for collection services—airports and ANSPs can take advantage of automated payments, multi-currency support, accurate billing data, regular reporting, and secured remittance to clients.
Moreover, best practice processes are applied to ensure full compliance with standard accounting rules and various laws and regulations related to anti-money laundering, anti-terrorism, and sanctions, thereby providing complete full transparency.
And, of course, there are cost efficiencies. Invoicing and collecting directly from each airline can be time-consuming and costly. Incorrect billing data may result in airlines being under- or over-charged. The disputes could potentially delay payments. IATA E&F resolves this billing management business challenge without requiring airport or ANSP investment in systems or additional resources. The cost is simply a small percentage of the charges invoiced.
“Airlines similarly benefit from a greatly simplified process,” says El Khoury. “There is a single point of contact for questions or irregularities. Late payment penalties can be avoided, reconciliation issues swiftly resolved, and disputes handled via data transparency and a standardized process.”
Customer support is an integral part of the IATA E&F offering. Airline requests and issues are handled by IATA 24/7 service desks in Montreal, Bucharest, Madrid, Beijing, and Singapore. These service desks are also responsible for resolving any disputes and conducting health checks. A billing management specialist is allocated to each airport or ANSP client, and an expert debt collection team is also available to follow-up on any delayed payment.
To learn more and explore the benefits for your organization visit iata.org/ef, or request a consultation with an IATA E&F expert.
