Simplified Interline Settlement A fundamental change…

1. Simplified Interline SettlementA fundamental change… Nicholas Coote Project Sponsor

2. SIS is theproject…. • Board of Governors, IATA Top management • IATA people and money • IATA StB mobilisation • Workshops at IATA regional offices

3. Why SIS is important? • Hitting the core of the process: paper • Changing the way industry works

4. Any organization, not only airlines

5. Not just an IT project • Business re-engineering • Re-think global processes

6. Spread the messagein your organization • Service providers • Invoice creators • Finance team • Treasury

7. Big, industry wide, global • IATA: $millions, 4 years, 20 people • 400 Airlines • 80 industry suppliers • +5,000 people $ +700 mSAVINGS

8. SIS Vision Fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefits to the industry. • Invoices are electronic and not backed by paper • Prime passenger billings do not require paper invoices or coupon listings • Rejects, including any attachments, are submitted electronically without paper • Cargo and Mail billings are electronic and paperless • Miscellaneous billings (including any supporting information) are electronic, whether as data or with attachments • IDEC concept maintained as IS-IDEC but with extended record lengths and new types • Settlement action directly from ET systems is enabled – Auto-billing

9. Think about your IS Implementation • You’ll save money by replacing today’s processes with IS • But the greatest potential of IS comes from completely rethinking your processes (especially in Misc) • Going forward, you should think about IS holistically

10. Important aspects to think about • There is substantial business re-engineering to be done at the outset, as invoicing is often originated from many sources • Person in charge of invoice not usually from the business end, unlike Revenue Accounting. This is an extra challenge • The structure of invoices needs to be changed in order to invoice electronically and enable compliance with IS-XML standards • Legal and financial management aspects of e-invoicing • The concept of Charge Category and Charge Code • Remember: more than 80, each with their own mandatory field contents • There are major changes to UATP processing

11. Miscellaneous billings • Misc billing is subject to the biggest changes of all • No data standards currently in use – no IDEC equivalent • Huge variations in invoices compared to passenger and cargo • Over 80 business types have been identified and encoded in the design • IS-XML serves the same purpose as IS-IDEC, but designed to work in conjunction with financial systems • Revenue Accounting Manual chapter A13 has been rewritten, and has gone from 5 pages to nearly 100 pages

12. Principles of the Charging Model • Cover costs – SIS will be run as a revenue-neutral service – which means no profits but also no losses • Fair and transparent to the end users – possible for IS users to calculate costs in advance; no surprises • Flattening cost curve – The largest members put far more than ten thousand timesthe number of invoices through SIS than the smallest; their SIS fees cannot be proportional

13. SIS Fee Components

14. SIS Fee Timing * “Full migration” means that you no longer submit claims outside of SIS (via the ICH-WEB)

15. The timer is running • SIS goes live in less than a year • Initial feedback is that 25-50% of members will migrate in 2011 itself • That means that members doing business with them also have to be prepared

16. Don’t forget… • Your SIS billings are standardised for both ICH and bilateral settlements • Means that once migrated you can use SIS to bill any airline, whether or not they will settle through ICH • Standardisation reduces costs and expands opportunities – look for the benefits

17. Thank you. Email: sis@iata.org SIS Website: www.iata.org/sis