ICH Update

1. ICH Update 2010 ICH User GroupNicholas Coote Clearing House Manager

2. Where have we come from? • The deepest recession for 20 years, possibly since the 1930s • ICH volumes in 2009 were down by 20% on 2008 • More in P, C and U, less in M • 23 suspensions in 2009 • Several major bankruptcies

3. 81% 420 Average one-way fare 80% 400 79% 78% 380 77% 360 % ASKs 76% Average one-way fare 75% 340 Passenger 74% load factor 320 73% 72% 300 2006 2007 2008 2009 2010 What is in store for 2010? • Demand is increasing, and faster than capacity • Load factors up from around 72% to nearly 79%

4. Business confidence is back

5. Profits are increasing

6. Clouds on the horizon? • Not in the clear yet – 2011 is looking mixed • Load factors seem to have passed their peak • Business confidence seems to have turned

7. ICH activity • Throughput is increasing – up by 8% on last year • Led by UATP and Cargo • Plenty of new joiners • 11 Airlines, 10 Associates and 2 Sponsored • Only 6 suspensions so far this year, with a loss ratio of just 0.0001% • The remainder was covered by security deposits or by recoveries after the event

8. Changes related to the SIS project • New interface to SIS to replace ICH-Web and F12 • Streamlined interclearance with the ACH • New reports to show sources of data (ICH Web or SIS) • New Suspended Member reports • Other changes • Improvements to F3 processing • NOTE: Existing ICH reports will continue to be available after SIS implementation

9. Changes to service pricing in 2011 • Participation structure and fees have been unchanged since inception • Need to start rethinking both in the light of SIS needs • Non-IATA Airlines, Strategic Partners, Airline Subsidiaries and Sponsored airlines • Billings up to USD1m pa – USD10,000 pa • Billings up to USD10m pa – USD20,000 pa • Associate Members and Sponsored non-airlines • Billings up to USD1m pa – USD16,000 pa • Billings up to USD10m pa – USD32,000 pa • ICH Web fees and billing over USD10m – rates are unchanged

10. Changes to service pricing in 2011 • New baseline pricing implemented for SIS users • Billings up to USD100,000 pa – USD1,000 • No ICH-Web fees – use of ICH-Web not permitted • Applies to Airline Members and Associate Members • Effective from go-live, and included within the SIS Participation Fee

11. SIS Migration Surcharge • Reminder • At SIS go-live, the SIS Migration surcharge comes in • Published in March 2009 and also highlighted last year • Applies to all ICH Web users • Charge likely to apply to period October-December 2011 • Rate varies according to number of invoices processed and status of Member • Published amounts will be prorated accordingly

12. SIS Migration Surcharge

13. Changes to settlement rules in SIS • Settlements will be based on invoices, not claims • No invoice = no settlement • Adjustments will be based on invoices, not claims • Incorrectly issued invoices; error identified before Closure: • Issue a credit invoice to correct the settlement balance • Same Charge Category and Charge Code, and reference the original invoice • Goes through ICH in the normal manner • Maintains the link between invoice values and settlement values • Settlement value is changed by the ICH after Closure due to a Protest/Adjustment: • Issue a credit invoice as above with Settlement Method Indicator = R • Signifies ‘Reversal’, and SIS will not route it to the ICH to avoid a duplicated adjustment

14. Changes to settlement rules in SIS • ICH-Web blocking for migrated users • Applies once you have migrated a complete billing Category (P, U, C or M) • The migrated Member can notify the ICH of its move of that Category, and the ICH will publish this to the Membership • After 6 months, ICH-Web access will be closed to both billing and billed Members • Effectiveness date still under discussion • All billings thereafter must go through SIS, in both directions • May mean manual entry through IS-Web

15. Changes in the Regulations • Full review by ICH Panel • New edition in 2011 • Review of Protest procedures • Changes to • Claims entry and submission (Procedure 1) • Report outputs (Procedure 2) • Signatory processes (Procedure 3) • Service charges and fees (Procedure 11) • New concepts, such as handling and disposal of duplicate claims

16. ICH WG • LA resigned from the Panel, • Now LH (Chair), UA, KL • Open for applications for membership • Must be a senior financial manager from an IATA Member, in good standing, approved by CFO • CV to be submitted to Financial Committee for review • Must be able to travel to meetings (not more than twice per year)

17. ICH UG • Focus on SIS – this will probably be the last major industry meeting before go-live • Most of the meeting has been given over to SIS briefings • SIS fundamentally changes the way you make your claims • E-invoice instead of ICH-Web/F12 • Take the opportunity to talk to the SIS project team, and colleagues from other airlines • ICH staff will answer any questions on impacts on ICH processes • Give us any suggestions for improvements or changes in the services we provide

18. Final note • For ICH Members SIS is mandatory • You don’t have to migrate immediately, or all at once • You can be part ICH-Web and part SIS • In the SIS world, your invoice is your claim • Benefit: Settlement always reconciles to invoices • Corollary: Failed invoice = no settlement • A huge change for all of us, including ICH itself • We will do all we can to support and assist our Members during the transition

19. Thank you Email: ich@iata.org ICH Website: www.iata.org/ich