SIS – Simplified Interline Settlement SIS Functional Review

1. SIS – Simplified Interline SettlementSIS Functional Review San Diego, ACH Annual Meeting 2011 Gianna Monsch, aerwise

2. Agenda • General & Basics • IS Functionality – more in detail • Special Cases SIS P3 – ACH Annual Meeting - SIS Functional Review

3. SIS Overview SIS P3 – ACH Annual Meeting - SIS Functional Review

4. Interline Settlement - Today Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) Settlement sheets – (weekly) Recap sheets - weekly Billed Entity ACH Billing Entity F3– (weekly) F12 – (weekly) F1 – net amounts of inv F2 - summary ICH ATPCO Cargo IDEC File (monthly) Cargo IDEC File (monthly) Pax IDEC File (monthly) Pax IDEC File (monthly) (incl F&F pre IDEC Validation) prorate engine prorate engine ARC-Compass (NFP storage) Previously released sales record GDSs BSPs F&F: receives NFP value AIA F&F SIS P3 – ACH Annual Meeting - SIS Functional Review

5. Integrated Settlement Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File SIS P3 – ACH Annual Meeting - SIS Functional Review 5

6. File Formats SIS P3 – ACH Annual Meeting - SIS Functional Review

7. Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ File Formats Integrated Settlement Format Conversion: • Billed Entity’s choice of format does not depend on the billing carrier’s IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Send files (or enter online) Receive (or download) invoices Validation Format Conversion SIS P3 – ACH Annual Meeting - SIS Functional Review

8. Invoice Data Input SIS P3 – ACH Annual Meeting - SIS Functional Review Invoice Input Data Files can be transferred using secure FTP or secure HTTP protocols Members also have an option of manually capturing Invoice information on IS-WEB

9. Input & Output Formats Files (upload & download) IS-IDEC-Passenger and Cargo IS-XML-Passenger, Cargo, Miscellaneous and UATP IS-WEB-All Others – Usage File for Pax All formats contain same fields for a given record type Billing participant can use any format at any time (“input combination”) Billing participant choice doesn’t affect billed participant (“format conversion”) Billing participant may submit billing data as often as they want Billing data files to be uploaded to IS via iiNet Record layouts and descriptions are documented in the Integrated Settlement Participant Guide (ISPG) located at: http://www.iata.org/whatwedo/finance/clearing/sis/Pages/materials-ISPG.aspx SIS P3 – ACH Annual Meeting - SIS Functional Review 9

10. File Formats – IS-IDEC No longer data exchange file, but rather used to create an invoice and settlement file Similar to IDEC, with enhancements: Existing fields made mandatory (source codes, etc) New records added (Rejection Memos, tax breakdowns, etc) New fields added (for e-billing, additional info, etc) Unnecessary records / fields removed (batch total records, etc) 500 byte records (instead of 160 byte) Every carrier will need system enhancements to support IS-IDEC SIS P3 – ACH Annual Meeting - SIS Functional Review 10

11. File Formats – IS-XML New XML format for Integrated Settlement Based on IATA Aviation Invoice Standard, used by IATA InvoiceWorks Identical fields and validation requirements to IS-IDEC Every carrier will need to make system enhancements to support IS-XML IS-IDEC vs. IS-XML is an IT decision – it is immaterial to the RA department Potential Benefits of IS-XML IS-XML format is more flexible and thus better than IS-IDEC for variable record structure (like Non-Transportation billings) Potential Benefits of IS-IDEC Relatively little system development for carriers with a sophisticated IDEC solution in place already IS-IDEC format is more efficient (processing, storage, and internet bandwidth) than IS-XML for a fixed record structure SIS P3 – ACH Annual Meeting - SIS Functional Review 11

12. Breakdown Records Breakdown Records have been added where necessary to provide for detailed, possibly repeating, data and to provide for large amounts of text E.g., a coupon can have 0 or more tax breakdown records, each detailing a tax type and amount Examples Coupon Prime Billing breakdown records: Tax, VAT breakdown Breakdown records for Rejection, Billing, Credit Memos: Reason Breakdown, Coupon Breakdown (with Tax & VAT) SIS P3 – ACH Annual Meeting - SIS Functional Review 12

13. Example Breakdowns (Pax Rejection Memo) Rejection Memo (SFI = 21) Reason Breakdown (SFI = 31) Coupon Breakdown (SFI = 32) VAT Breakdown (SFI = xx) Reason Breakdown (SFI = 31) Coupon Breakdown (SFI = 32) VAT Breakdown (SFI = xx) Coupon Breakdown (SFI = 32) VAT Breakdown (SFI = 34) Tax Breakdown (SFI = 33) Tax Breakdown (SFI = 33) Tax Breakdown (SFI = 41) SIS P3 – ACH Annual Meeting - SIS Functional Review 13

14. IS-WEB Web-based user interface to create and receive invoices and records Identical fields and validation requirements to IS-IDEC and IS-XML Validation in real-time minimizes possibility of later validation errors Potential Benefits The web interface is hosted by IATA, so no system development is required by carriers Potential Negatives More internet bandwidth will be required than file formats, and the connection will have to be stable IS transaction fees 25% higher  Not an alternative to a Revenue Accounting system SIS P3 – ACH Annual Meeting - SIS Functional Review 14

15. Validation SIS P3 – ACH Annual Meeting - SIS Functional Review

16. Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Validation Integrated Settlement Validation: • Guarantees links between records (e.g. 2nd and 1st RMs) • Enforces timeframes and “order” (1st RM -> 2nd RM -> 3rd RM) • Ensures file is properly formed • Other validations IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Send files (or enter online) Receive (or download) invoices Validation Format Conversion SIS P3 – ACH Annual Meeting - SIS Functional Review

17. Sanity Check First, Then Validation • Files will go through and must pass, “Sanity Check” before moving to the next, more rigorous, “Validation” process • Sanity Check will: • Check for formatting issues • Validation will: • If errors encountered, file will continue to go through Validation process and report all errors • In IS-WEB • Email with validation error report (in detail) as per Member Profile • Take up to 4 hours to complete • CAUTION: Be sure to finalize your invoices allowing enough time for validation to complete and time to correct any errors before the submission deadline (same as Recap Sheet due date and time) SIS P3 – ACH Annual Meeting - SIS Functional Review

18. Examples of Validation Format Rules Ensures data types (e.g. numeric/alphanumeric), length, etc as defined Correct Values e.g. Settlement method cannot be “ACH” if both airlines are only ICH members Mandatory Fields Source Code, Ticket Issuing Airline, Coupon Number, etc Rejection & Correspondence Timeframes and Order Enforced 1st RM  2nd RM  3rd RM  Correspondence Mandatory Breakdown Records Are Present Tax breakdown records are present if coupon tax is populated and the breakdown record sums match the tax field Billing entity will be notified of validation results Invoices (and possibly files) failing validation will not go any further SIS P3 – ACH Annual Meeting - SIS Functional Review 18

19. After Validation Validated invoice billing totals sent to the ACH for settlement Clearing House will combine the IS billing totals with the Recap Sheet billing totals and settle the combined totalCAUTION: Do not add IS billing totals to a Recap Sheet or it will be billed to the other participant TWICE The billed participant may retrieve their billed and settled invoices data via the IS Web(At period end – as per IS Calendar) The billed participant will be able to retrieve their billed data files (At period end – as per IS Calendar) The billed participant will receive a billing file at the end of each period instead of one time per month SIS P3 – ACH Annual Meeting - SIS Functional Review 19

20. Correspondence SIS P3 – ACH Annual Meeting - SIS Functional Review

21. Correspondence Settlement Processes ICH ACH Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Central Repository Prorate Engine Usage File Enter Correspondence (including attachments) Receive Correspondence (including attachments) Validation SIS P3 – ACH Annual Meeting - SIS Functional Review 21

22. Correspondence Correspondence can include an “authority to bill” flag which identifies when the authority to bill has been granted Not tied to settlement periods like transactions in Integrated Settlement – real-time and similar to e-mail but via IS-WEB interface Notifications sent when Correspondence has been created and sent to you Additional notifications sent when time limits are set to expire Validation ensures no “cross-over” – correspondence can only be in reply to another correspondence (or 3rd-stage RM Pax and Freight or 2nd stage RM ACH non transport) cannot be out-of-order SIS P3 – ACH Annual Meeting - SIS Functional Review 22

23. Supporting Documents SIS P3 – ACH Annual Meeting - SIS Functional Review

24. Supporting Documents Supporting documents can be attached to most record types (including Pax Prime Billings, Freight, Non-Transportation) Two types of supporting documents: Electronic Presentation - Supporting document that is digital but not in a defined and structured format. The document might be a PDF file or an image that a computer can read but not extract data from. E-Electronic Document – Supporting document that is in a defined and structured format which can be parsed by a computer. Example formats are IDEC, XML, or CSV. SIS P3 – ACH Annual Meeting - SIS Functional Review 24

25. Supporting Documents – With IS Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Batch Transfer e.g. FTP Batch Transfer e.g. FTP SIS P3 – ACH Annual Meeting - SIS Functional Review 25

26. Central Repository & Supporting Docs What? Any type of accepted supporting document (image, PDF, etc) How long? As long as the data is operationally required When? Before or after the associated record is uploaded (with “pending attachments” flag, which allows for notifications if not uploaded)S SIS P3 – ACH Annual Meeting - SIS Functional Review 26

27. Audit Trail SIS P3 – ACH Annual Meeting - SIS Functional Review

28. Audit Trail & Rejection History With operational data being stored: Future records (e.g. rejections) don’t need supporting documents re-attached IS-WEB can be used to search and take action on previous billings: Search & browse through all records for which your carrier billed or was billed Drill down through tickets, coupons, tax breakdowns, correspondences, etc View audit trail of linked correspondences, rejections, and prime billings Find outgoing correspondences that haven’t been responded to Go directly to appropriate action (create RM, create correspondence, create billing memo) SIS P3 – ACH Annual Meeting - SIS Functional Review 28

29. Member Profile SIS P3 – ACH Annual Meeting - SIS Functional Review

30. Bringing it All Together • Member Administration will contain centralized preferences for your company: • User Administration with the ability to create users and customize user permissions • Member Profile to set your own preferences, such as: • Who to contact for IS alerts, file validation failures, etc • Rules as to how IS will operate for your company (apply digital signatures, allow corrections, etc) • Processing Dashboard will provide a centralized overview of all submitted files and their statuses throughout the Integrated Settlement SIS P3 – ACH Annual Meeting - SIS Functional Review

31. Key Differences forFreight & Non- Transport SIS P3 – ACH Annual Meeting - SIS Functional Review

32. Key Differences for Freight • All freight record types also represented in IS-IDEC, IS-XML, and IS-WEB • The IATA e-freight project will introduce e-electronic formats (structured data) for these supporting documents over time • Before then, carriers can bilaterally decide to use e-electronic formats, or to not transfer supporting documents at all SIS P3 – ACH Annual Meeting - SIS Functional Review

33. Key Differences for Non-Transportation • IS-IDEC cannot be used for Non-Transportation billings (only IS-XML and IS-WEB) • All Non-Transportation and UATP billings are uniquely defined by a charge category and charge code, allowing for routing to the correct person/department, automatic posting, or even automatic reconciliation • UATP: carriers can opt-in to a service, where UATP-ATCAN will send the billing (via IS-XML) to SIS on behalf of the billing carriers. • Non-Transportation and UATP use Rejection Invoices (not Memos) and Credit Notes (not Memos) • Examples: SIS P3 – ACH Annual Meeting - SIS Functional Review

34. Questions? SIS P3 – ACH Annual Meeting - SIS Functional Review

35. Agenda • General & Basics • IS Functionality – more in detail • Special Cases SIS P3 – ACH Annual Meeting - SIS Functional Review

36. Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ SIS Overview Integrated Settlement IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File SIS P3 – ACH Annual Meeting - SIS Functional Review

37. Onlythefunctionalityisshown, whichyouareallowedtouse (Member Profile – User – Permissions) Alerts (from the system and additionally sent by email to this user) Upcoming Milestones Messages from SIS-Operation On behalf of - SIS-Ops - ICH Ops - ACH Ops Announcements SIS P3 – ACH Annual Meeting - SIS Functional Review

38. Insight into IS(Integrated Settlement) SIS P3 – ACH Annual Meeting - SIS Functional Review

39. Integrated Settlement Settlement Processes IS-WEB IS-WEB ICH ACH Central Repository Billed Entity Billing Entity Billing & Invoicing Processes “Digital Signature” Company IS-XML IS-XML Billing Record DB Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Processes at time of Sales NFP engine ARC COMPASS™ IS – Integrated Settlement SIS P3 – ACH Annual Meeting - SIS Functional Review

40. Billing and Invoicing Process ICH ACH IS-WEB Interface ICH Interface ACH Validation IS-WEB Supp. Doc. Invoice PDF Supp. Doc. IS-XML Billing Outward IS-IDEC Billing Record DB IS-XML Supp. Doc. IS-IDEC Supp. Doc. Digital Signature Billing Value Confirmation Validation & Correction(IS-WEB) Value Determination & Auto-Billing Usage File Digital Signature Billing Carrier ATOS ATPCO ATPCO SIS P3 – ACH Annual Meeting - SIS Functional Review

41. IS-WEB For Everybody IS-WEB is also used for other web-based services Audit Trail Pax & Cargo & Miscellaneous Correspondence Online Corrections after validation failure Processing Dashboard Airline profile updates Web Analysis Reports View and print invoices in a standard format Extensive user access controls (your company’s administrator can grant detailed permissions) SIS P3 – ACH Annual Meeting - SIS Functional Review 41

42. Billing Record DB IS-WEB - Various Processes Audit Trail Correspondence Member Administration Web Analysis Reports Processing Dashboard IS-WEB SIS P3 – ACH Annual Meeting - SIS Functional Review

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47. Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Correspondence is sent immediately Integrated Settlement IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File SIS P3 – ACH Annual Meeting - SIS Functional Review

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49. IS Validation SIS P3 – ACH Annual Meeting - SIS Functional Review

50. IS Validation of Data Files (1 of 4) • Sanity Checks (General) • File naming convention • Duplicate filename check • Successful Decompression of file • Invalid character set check SIS P3 – ACH Annual Meeting - SIS Functional Review