A credit insurance programme allowing airlines to protect themselves against default by SAR-based ticketing agents has been proposed after the successful introduction of a similar scheme in the wholesale ticketing market. Airlines and the International Airport Transport Association have held discussions to introduce a billing and settlement plan (BSP) in Hong Kong, said Tom Cord, a director of international credit insurance consultants Guernica Holdings market services. 'Agents will pay the airlines through BSP and BSP will then give the money to each airline, like a central clearing bank,' Mr Cord said. A similar insurance programme aimed at protecting air-ticketing wholesalers from sub-agents defaulting on payment was launched in Hong Kong by the company and Australia-based QBE Insurance in November, he said. Mr Cord said airlines and travel agents traditionally covered their credit risk by requiring agents or sub-agents to provide bank guarantees for outstanding payments. This system places a burden on agents as they are required to offer banks collateral in return for guarantees. By contrast an insurance programme offers an airline protection and agents a lower cost of doing business, QBE assistant manager Victor Cheung said. 'We estimate the insurance premium arising from the programme will only represent about 1 per cent of our operating cost,' said Patco Yik, accounts manager of Nan Hwa (Express) Travel Service, one of the participants of the wholesale programme.