The International Air Transport Association (IATA) has suspended low-cost airline Fly540 from utilising its automated online booking system but failed to give exact reasons for the decision. 

IATA said Fly540 violated its Billing and Settlement Plan (BSP) rules stipulated under Resolution 850 and ordered travel agents to stop issuing e-tickets and accepting payments on behalf of the carrier.

Resolution 850 stipulated that IATA can suspend an airline’s ticket sales when it owes payments on the BSP, stops all scheduled passenger operations or when it becomes bankrupt.

“IATA has suspended Fly540 with immediate effect, in accordance with the provisions in Resolution 850 ‘Attachment F’. BSP travel agents must immediately suspend all ticketing activities on behalf of Fly540, including the use of automated systems for processing of refunds or other transactions on behalf of Fly540. BSP travel agents must immediately stop using Fly540’s name and numeric code as a ticketing airline,” reads the notice by IATA.


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IATA runs the BSP and allows accredited travel agents to book tickets and manage payments for airlines registered with the body that has 88 BSPs in various markers across the globe.

The decision essentially means passengers will not be able to book Fly540 flights and those who already booked will be forced to wait for travel agents to agree with the airline on refunds.

In October 2019, BSP Kenya moved to the New Generation IATA Settlement Scheme (NewGen ISS) to simplify financial settlement between travel agents and airlines operating in Kenya.

Fly540 can challenge the IATA suspension but it must show how it has rectified the matter that cause it to be suspended from the ticketing and billing system and settle debt owed to IATA.

Fly540 reportedly operates five aeroplanes and flies to various destinations in the East African region, with the move coming as airlines are struggling with the adverse effects of Covid-19.