Jet customers' refunds may be delayed as IATA cancels clearing house membership

The deadline for Jet Airways corporate insolvency resolution process is October 21

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Aviation industry body, International Air Transport Association (IATA), has suspended clearing house membership of Jet Airways. Due to this, travel agents around the world won't be able to book tickets on the airline now.

While the suspension's impact won't be immediate, as the airline has stopped operations, this will impact the refund process of Jet Airways' customers whose tickets were cancelled. And it does complicate things for a new owner.

Jet Airways had suspended operations on April 17, soon after banks refused to give interim funding.

"In accordance with Clearing House regulation...for reason of suspension from all IATA settlement systems as the airline has ceased operations, the Clearing House Membership of Jet Airways, 9W-589 has been suspended with immediate effect," the Association said in a communication to its members on April 18.

Mark Martin, founder and CEO of Martin Consulting LLC, an aviation advisory and consulting firm, explains the impact:

"IATA accredited travel agents can longer sell tickets and get IATA credit on the ticket value. This will reduce the availability of Jet Airways seats in the domestic and international markets."

An IATA accredited travel agent uses the association's system to book tickets for its customers.

Jet Airways' customers have been advised to submit refund request with the travel agent, who will then work with IATA and Jet Airways to give the money back.

"Claims by an against the above-mentioned airline will not be princesses by the clearing house with effect from and including Period 02 of the April 2019 clearance month. Claims already submitted for clearance have been excluded by the Clearing House," IATA said.

The latest setback comes even as the bidding is on for Jet Airways. Four suitors are in the fray - Etihad Airways, TPG Capital, Indigo Partners and NIIF.

The suspension of the IATA clearing house membership will further delay and complicate the revival of the airline.