he world's airlines, represented by their international trade association, IATA, have floated a most interesting proposition: A clearinghouse to handle the transfer of funds between travel agents and travel suppliers, such as hotels, cruise lines, tour operators and consolidators.

The new entity, IATA Travel Settlement Services, was rolled out in Canada in 2002, and IATA is going to bring it to the U.S. this year.

The project appears to be part of an effort by IATA to operate settlement systems in various countries around the world where it already operates agency accreditation and settlement programs for airlines, similar to ARC's operation in the U.S.

ARC, of course, has tried over the years to attract nonair suppliers to its settlement system, but with only modest success. So far, the big names, the names like Carnival, Hilton or Hertz, aren't there.

The IATA plan, as described in our news pages today, would offer agents and suppliers somewhat more flexibility than ARC. Participants, for example, would negotiate their own invoice and payment schedules, and travel sellers wouldn't need an ARC accreditation to reap the benefits of participating in the clearinghouse.

We will leave it to the affected travel suppliers and travel agents to decide whether this is a good idea.

For the moment, we will simply observe that we are reminded of the last time IATA tried to do a big unsolicited favor for the rest of the travel industry. That was several years ago, when IATA tried to create (some said control) a "dot-travel" Internet domain for the rest of us.

It didn't happen, largely because the Internet's governing body thought the airlines didn't have all their "partners in travel" on board.

IATA may have a good idea here, but if it is so necessary that surface travel suppliers have such a service, why is it being invented by the airlines? We'd like to hear more from agents, and from hotels, cruise lines, tour and car rental firms, attractions and theme parks.

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Global Blue?

etBlue, the airline that seems to make news the way other airlines make exhaust fumes, has decided to make the Dominican Republic its first international destination in June. Judging from the applications on file at the Transportation Department, Canada, the Bahamas, Jamaica and Bermuda won't be far behind.

This isn't the first time that cheap seats have gone international. Sir Freddie Laker upset the transatlantic applecart with low-cost, low-frills service nearly 30 years ago, and several of the post-deregulation new entrants in the U.S., such as People Express, expanded from domestic to international service -- though not always with happy results.

The current crop of low-cost carriers in the U.S., for the most part, have confined themselves to domestic service. So it is with great interest that we will be among those watching how JetBlue manages this next phase of its extraordinary growth.

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