The practical effect of this on fliers is that it will make life a bit more difficult, but it doesn’t stop anyone from flying to Iran.
Currently, an Iranian living in North America who wants to visit home buys a ticket from an international airline and pays once, covering both the flight from North America to Europe on an international airline and the connecting flight on Iran Air from Europe to Tehran.
With IATA’s suspension, the international airline won’t sell you a ticket for the Iran Air link. You will have to go directly to Iran Air over the Internet to buy an Iran Air ticket. A one-step process will become a longer two-step process.
The United States imposed sanctions on Iran Air in June saying it 
had provided “material support and services” to the Pasdaran, which is sanctioned by the US Treasury for supporting terrorism and for human rights abuses in suppressing political protesters.
The sanctions mean that no US “person” can do business with Iran Air. A US “person” is any American business and anyone residing in the United States, including non-citizens. But as the Iran Times explained in June, the sanctions include an exemption for routine travel so residents of the United States may buy passenger tickets on Iran Air.
It isn’t clear why IATA decided it had to abide by US sanctions. It is organized under Canadian law and headquartered in Montreal. IATA told the Iran Times it was “obliged to suspend all settlement services with Iran Air with effect from Wednesday 5 October” because the US sanctions “are directly applicable to IATA.”
But Iran Air disputed that. Farhad Parvaresh, Iran Air’s chief executive, said IATA “is not obliged to implement US laws and sanctrions.” He said, “I have talked to the IATA secretary general and have written a letter to him in protest.”
Parvaresh said IATA was violating internatonal laws, although he did not cite any specific international law, He also said that IATA was funded by its member airlines and is bound by its statute to support them. However, IATA said that membership in its Billing and Settlement Plan, from which Iran Air has now been suspended, is separate from IATA membership. Not all of IATA’s 230 members are also in the billing services plan, and many airlines not members of IATA are in the Billing and Settlement Plan, which serves 400 airlines.
IATA is not a governmental organization. It is a private association of airlines.
The IATA billing services is essentially a clearinghouse that simplifies payments among airlines. For example, Japan Air may sell someone a ticket from Tokyo to San Francisco to New York to Frankfurt. The first leg may be on Japan Air, the second leg on American Airlines and the third leg on Lufthansa. Japan Air doesn’t send checks to American Airlines and Lufthansa. It tells IATA, which nets out all the payments owed back and forth among airlines and periodically tells each airline what it needs to pay to balance everything out.
IATA’s suspension applies only to Iran Air and not to the three other Iranian airlines—Aseman, Kish and Mahan—that are also members of IATA. Those airlines are not under US sanctions.