In this, sensitivity based approach to estimate BITC(bilateral interchange transfer capacity) considering the real power flow control function of FACTS devices is presented. The real power flow setting of the FACTS devices is adjusted so that it transfers the power flow from the first violation point of transmission capacity to other transmission lines in the power system, thus allowing more power to be transferred from the specified generator bus to the specified load bus. The transfer between the two bus locations is increased from this new operating condition until a violation of transmission capacity limits occurs or until the setting of the FACTS devices can no longer be adjusted. The proposed algorithm is illustrated using examples of small and real life power system.