SIS Functional Review James SHANNON RA 44

SIS Functional Review James SHANNON RA 44 – BUD 14 Sept 2010

Goal & Agenda To familiarize you with Simplified Interline Settlement and prepare you for tomorrow’s breakout sessions Ö Project Overview Ö The Need For IS Ö Vision Ö IS Solution & Features Ö Benefits & Changes Ö Next Steps SIS – RA 44 –SIS Review 2 14 Sept 2010

Project Overview SIS – RA 44 –SIS Review 4 14 Sept 2010

Interline Settlement - Today Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) Settlement sheets – (weekly) F 3– (weekly) Billed Entity prorate engine GDSs BSPs Cargo IDEC File (monthly) Pax IDEC File (monthly) Pre viou s sale ly relea s re cord sed ACH ICH ATPCO (incl F&F pre IDEC Validation) F 12 – (weekly) F 1 – net amounts of inv F 2 - summary Cargo IDEC File (monthly) Pax IDEC File (monthly) Billing Entity prorate engine ARC-Compass (NFP storage) AIA F&F SIS – RA 44 –SIS Review Recap sheets weekly 5 F&F: receives NFP value 14 Sept 2010

SIS Vision Fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefits to the industry. Ö Ö Invoices are electronic and not backed by paper Prime passenger billings do not require paper invoices or coupon listings IDEC formats are maintained with increased record types Passenger rejects, including any attachments, are submitted electronically without paper Ö Cargo and Mail billings are electronic and paperless Ö Miscellaneous billings (including any supporting information) are electronic, whether as data or with attachments Ö Settlement action directly from ET systems is enabled SIS – RA 44 –SIS Review 6 14 Sept 2010

IS Solution & Features SIS – RA 44 –SIS Review 7 14 Sept 2010

Interline Settlement - Today Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) Settlement sheets – (weekly) F 3– (weekly) Billed Entity prorate engine GDSs BSPs Cargo IDEC File (monthly) Pax IDEC File (monthly) Pre viou s sale ly relea s re cord sed ACH ICH ATPCO (incl F&F pre IDEC Validation) F 12 – (weekly) F 1 – net amounts of inv F 2 - summary Cargo IDEC File (monthly) Pax IDEC File (monthly) Billing Entity prorate engine ARC-Compass (NFP storage) AIA F&F SIS – RA 44 –SIS Review Recap sheets weekly 8 F&F: receives NFP value 14 Sept 2010

Integrated Settlement Processes Billed Entity IS-IDEC Overall Processes IS-XML ICH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ SIS – Materials – Review RA 44 –SIS RA 42 Breakout Interfaces & Validation IS-WEB ACH Overall Processes IS-WEB IS-XML IS-IDEC Usage File Billing Entity Prorate Engine NFP engine 9 14 Sept 2010

IS Overview – One Level Down ICH IS-WEB Supp. Doc. IS-XML IS-IDEC Supp. Doc. Digital Signatur e Invoice PDF ACH Interface ICH Interface ACH ATOS SIS – RA 44 –SIS Review Validation Supp. Doc. IS-XML Billing Outward Digital Signature IS-WEB IS-IDEC Billing Record DB Supp. Doc. Billing Value Validation & Value Determination Confirmation Correction (IS-WEB) ATPCO Billing Carrier 10 Usage File ATPCO 14 Sept 2010

No F 12 files. No recap sheets, either. Nothing that you submit to the ICH or ACH today can be submitted after migration. SIS – RA 44 –SIS Review 11 14 Sept 2010

Main Features of IS Ö File Formats & Validation Ö Passenger Ö Ö Ö Time of Sales – NFP final, NFP non-final, and Own Prorate Storage Value Determination & Autobilling Sampling Correspondence Audit Trail Ö Differences for Cargo Ö Differences for Miscellaneous Ö Bringing It All Together Ö Member Administration Ö Processing Dashboard Ö Document Storage SIS – RA 44 –SIS Review 12 14 Sept 2010

File Formats & Validation SIS – RA 44 –SIS Review 13 14 Sept 2010

File Formats Integrated Settlement Billed Entity IS-IDEC “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ Receive (or download) invoices SIS – RA 44 –SIS Review IS-WEB Enabling Processes IS-XML Enabling Processes IS-WEB Settlement Processes Format Conversion: Ö Billed Entity’s choice of format ACH does. ICH depend on the billing not carrier’s IS-XML IS-IDEC Usage File Billing Entity Prorate Engine NFP engine Validation Format Conversion 14 Send files (or enter online) 14 Sept 2010

File Formats – IS-IDEC Ö No longer data exchange file, but rather used to create an invoice and settlement file Ö Similar to IDEC, with enhancements: Ö Ö 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) Ö 500 byte records (instead of 160 byte) Ö Every carrier will need system enhancements to support IS-IDEC SIS – RA 44 –SIS Review 16 14 Sept 2010

File Formats – IS-XML Ö Ö New XML format for Integrated Settlement Based on IATA Aviation Invoice Standard, used by IATA Invoice. Works Identical fields and validation requirements to IS-IDEC Every carrier will need to make system enhancements to support IS-XML Ö IS-IDEC vs. IS-XML is an IT decision – it is immaterial to the RA department Ö Potential Benefits of IS-XML Ö IS-XML format is more flexible and thus better than IS-IDEC for variable record structure (like Miscellaneous billings) Ö Potential Benefits of IS-IDEC Ö Relatively little system development for carriers with a sophisticated IDEC solution in place already Ö IS-IDEC format is more efficient (processing, storage, and internet bandwidth) than IS-XML for a fixed record structure SIS – RA 44 –SIS Review 17 14 Sept 2010

IS-WEB Record Structure Ö Web-based user interface to create and receive invoices and records Ö Identical fields and validation requirements to IS-IDEC and IS-XML Ö Validation in real-time minimizes possibility of later validation errors Ö Potential Benefits Ö The web interface is hosted by IATA, so no system development is required by carriers Ö Potential Negatives Ö More internet bandwidth will be required than file formats, and the connection will have to be stable Ö Won’t be as user-friendly as a dedicated, local system Not an alternative to a Revenue Accounting system SIS – RA 44 –SIS Review 18 14 Sept 2010

IS-WEB For Everybody IS-WEB is also used for other web-based services Ö Audit Trail Ö Pax & Cargo Correspondence Ö Online Corrections after validation failure Ö Processing Dashboard Ö Airline profile updates Ö Web Analysis Reports Ö View and print invoices in a standard format Ö Extensive user access controls (your company’s administrator can grant detailed permissions) SIS – RA 44 –SIS Review 19 14 Sept 2010

Breakdown Records Ö Breakdown Records have been added where necessary to provide for detailed, possibly repeating, data and to provide for large amounts of text Ö E. g. , a coupon can have 0 or more tax breakdown records, each detailing a tax type and amount Ö Examples Ö Coupon Prime Billing breakdown records: Ö Tax, VAT breakdown Ö Breakdown records for Rejection, Billing, Credit Memos: Ö Reason Breakdown, Coupon Breakdown (with Tax & VAT) SIS – RA 44 –SIS Review 20 14 Sept 2010

Example Breakdowns (Pax Rejection Memo) Rejection Memo (SFI = 21) Reason Breakdown (SFI = 31) Coupon Breakdown (SFI = 32) VAT Breakdown VAT (SFI = xx) Breakdown (SFI = 34) Tax Breakdown Tax (SFI = 33) Breakdown (SFI = 41) SIS – RA 44 –SIS Review 21 14 Sept 2010

Example Breakdown Ö Invoice Header Information Ö Prime Billings (Source Code Summary) Ö 1 st Stage Rejections (Source Code Summary) Ö 2 nd Stage Rejections (Source Code Summary) Ö 3 rd Stage Rejections (Source Code Summary) Ö Billing Memos (Source Code) Ö Credit Memos (Source Code Summary) Ö Invoice Summary Ö Invoice VAT Summary ($100) Ö Invoice VAT Breakdown ($80) Ö Invoice VAT Breakdown ($20) SIS – RA 44 –SIS Review 22 14 Sept 2010

Example Breakdown Ö Billing Memos ($100) (Source Code Summary) Ö Billing Memo #1 ($10) Ö Billing Memo #2 ($50) Ö Billing Memo #3 ($40) Ö VAT Summary ($20) Ö VAT Breakdown ($5) SIS – RA 44 –SIS Review 23 14 Sept 2010

Example Breakdown Ö Billing Memo #3 ($40) Ö Coupon #1 ($10) Ö Coupon #2 ($10) Ö Coupon #3 ($20) Ö VAT Summary Ö VAT Breakdown (multiple) Ö Tax Summary Ö Tax Breakdown (multiple) SIS – RA 44 –SIS Review 24 14 Sept 2010

Validation Integrated Settlement Processes Validation: Billed Entity IS-IDEC Ö Guarantees links between ICH ACH records (e. g. 2 nd and 1 st RMs) Ö Enforces timeframes and “Digital “order” (1 st RM -> 2 nd RM -> 3 rd Signature” RM) Company Ö Ensures file is properly formed Ö Other Invoicing Billing & validations Processes Central Repository Processes at time of Sales ARC COMPASS™ Receive (or download) invoices SIS – RA 44 –SIS Review IS-WEB Enabling Processes IS-XML Enabling Processes IS-WEB IS-XML IS-IDEC Usage File Billing Entity Prorate Engine NFP engine Validation Format Conversion 25 Send files (or enter online) 14 Sept 2010

Examples of Validation Ö Format Rules Ö Ensures data types (e. g. numeric/alphanumeric), length, etc as defined Ö Correct Values Ö e. g. Settlement method cannot be “ACH” if both airlines are only ICH members Ö Mandatory Fields Ö Source Code, Ticket Issuing Airline, Coupon Number, etc Ö Rejection & Correspondence Timeframes and Order Enforced Ö 1 st RM 2 nd RM 3 rd RM Correspondence Ö Mandatory Breakdown Records Are Present Ö Tax breakdown records are present if coupon tax is populated and the breakdown record sums match the tax field Ö Billing entity will be notified of validation results Ö Invoices (and possibly files) failing validation will not go any further SIS – RA 44 –SIS Review 27 14 Sept 2010

Passenger SIS – RA 44 –SIS Review 28 14 Sept 2010

Time of Sales – Now (Optional) Settlement sheets – (weekly) F 3– (weekly) ICH Billed Airline prorate engine GDSs BSPs ATPCO Pax IDEC File (monthly) Pre viou s sale ly relea s re cord sed Sales Records Recap sheets weekly ACH (incl F&F pre IDEC Validation) F 12 – (weekly) F 1 – net amounts of inv F 2 - summary Pax IDEC File (monthly) prorate engine ARC-Compass (NFP storage) AIA F&F Billing Airline F&F: receives NFP value All: May receive sales records Sales Records, NFPs Optional Proration, Storage, Switching SIS – RA 44 –SIS Review 29 14 Sept 2010

Time of Sales – With IS Integrated Settlement Processes Billed Airline IS-IDEC Enabling Processes IS-XML ICH IS-WEB ACH “Digital Signature” Company Billing & Invoicing Processes Central Repository Enabling Processes IS-WEB Processes at time of Sales Records or Own Prorates SIS – RA 44 –SIS Review ARC COMPASS™ NFP engine Optional Proration (final & non-final), Storage, Switching 30 IS-XML IS-IDEC Usage File Billing Airline Prorate Engine Sales Records, NFPs, & Sales Carrier’s Own Prorates 14 Sept 2010

Neutral Fare Prorates – With IS Ö NFP engine will be available to carriers for FIRST & FINAL™ (NFP Final) and non-F&F (NFP non-final) purposes Ö NFP non-final could minimize rejections without any obligation by the carriers Ö Own prorate storage and switching will allow the sales carrier to upload prorates, which are then forwarded or made available to the billing carrier SIS – RA 44 –SIS Review 31 14 Sept 2010

Time of Billing – Now Pre-IDEC Validation for F&F NFP values (updates the PMI) Billed Airline prorate engine GDSs BSPs ATPCO Pax IDEC File (monthly) Pre viou s sale ly relea s re cord sed (incl F&F pre IDEC Validation) Pax IDEC File (monthly) prorate engine ARC-Compass (NFP storage) AIA F&F SIS – RA 44 –SIS Review Billing Airline 32 F&F: receives NFP value All: May receive sales records 14 Sept 2010

Submitting Billing Information – With IS Integrated Settlement Billing File / Data (similar to today) IS-WEB ACH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ Enabling Processes IS-IDEC ICH Enabling Processes Billed Airline (similar to today) Settlement Processes IS-WEB IS-XML Billing File / Data IS-XML IS-IDEC Usage File Billing Airline Prorate Engine NFP engine Billing Value Confirmation (Leaves “Original PMI”, updates “Value Confirmation PMI”) SIS – RA 44 –SIS Review 33 14 Sept 2010

Time of Billing – IS Value Determination Integrated Settlement Billing File / Data (similar to today) IS-WEB ACH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ NFP engine Enabling Processes IS-IDEC ICH Enabling Processes Billed Airline (similar to today) Settlement Processes IS-WEB IS-XML Billing File / Data IS-XML IS-IDEC Usage File Billing Airline Prorate Engine Usage File Prorate Values SIS – RA 44 –SIS Review 34 14 Sept 2010

Time of Billing – IS Auto-Billing Integrated Settlement Billing File / Data (similar to today) Settlement Processes IS-IDEC Enabling Processes Billed Airline ICH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ Billing and Invoice Files Created Within IS IS-WEB ACH NFP engine Enabling Processes IS-WEB IS-XML No Billing File From Carrier IS-XML IS-IDEC Usage File Billing Airline Prorate Engine Usage File Daily Revenue Recognition File Weekly Invoice Posting File SIS – RA 44 –SIS Review 35 14 Sept 2010

Sampling Ö Provisional Invoice (as today with prime coupon billing, but with elements from Forms A and B) Ö Universe Adjustment (Form C) Ö Digit Evaluation (Forms D and E) Ö Form G (ACH) Ö Rejection Memos & Correspondence (as today with non-sample but with elements from Forms F and XF) All via IS-IDEC, IS-XML, and IS-WEB SIS – RA 44 –SIS Review 36 14 Sept 2010

Pax & Cargo Correspondence Integrated Settlement Processes Billed Airline IS-IDEC Enabling Processes IS-XML ICH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ Receive Correspondence (including attachments) SIS – RA 44 –SIS Review IS-WEB ACH Enabling Processes IS-WEB IS-XML IS-IDEC Usage File Billing Airline Prorate Engine NFP engine Validation 37 Enter Correspondence (including attachments) 14 Sept 2010

Pax & Cargo Correspondence Ö Correspondence can include an “authority to bill” flag which identifies when the authority to bill has been issued Ö Not tied to settlement periods like transactions in Integrated Settlement – real-time and similar to e-mail but via IS-WEB interface Ö Validation ensures no “cross-over” – correspondence can only be in reply to another correspondence (or 3 rd-stage RM) and cannot be out-of-order SIS – RA 44 –SIS Review 38 14 Sept 2010

Audit Trail & Rejection History Ö With operational data being stored: Ö Future records (e. g. rejections) don’t need supporting documents re-attached Ö IS-WEB can be used to search and take action on previous billings: Ö Search & browse through all records for which your carrier billed or was billed Ö Drill down through tickets, coupons, tax breakdowns, correspondences, etc Ö View audit trail of linked correspondences, rejections, and prime billings Ö Find outgoing correspondences that haven’t been responded to Ö Go directly to appropriate action (create RM, create correspondence, create billing memo) SIS – RA 44 –SIS Review 39 14 Sept 2010

Audit Trail (example view) Activity Date Record / Supporting Docs 1 st Correspondence 1 May $35; “I do not agree with your calculation…” 3 rd Rejection 1 Apr $50; Long Explanation. doc 2 nd Rejection 1 Mar $100; “See attached”; ticket. jpg 1 st Rejection 1 Feb $100; “No coupon in our system” Prime Billing 1 Jan $100 Create Correspondence SIS – RA 44 –SIS Review 40 14 Sept 2010

Key Differences for Cargo & Misc SIS – RA 44 –SIS Review 41 14 Sept 2010

Key Differences for Cargo Ö All cargo record types also represented in IS-IDEC, IS-XML, and IS-WEB Ö The IATA e-freight project will introduce e-electronic formats (structured data) for these supporting documents over time Ö Before then, carriers can bilaterally decide to use e-electronic formats, or to not transfer supporting documents at all SIS – RA 44 –SIS Review 42 14 Sept 2010

Key Differences for Miscellaneous Ö IS-IDEC cannot be used for Miscellaneous billings (only IS-XML and IS-WEB) Ö All Miscellaneous 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 Ö Examples: Charge Category Ground. Handling Baggage Ground. Handling Cargo Partner. Alliance SIS – RA 44 –SIS Review Charge Code FF Miles 43 14 Sept 2010

Bringing it Together SIS – RA 44 –SIS Review 44 14 Sept 2010

Bringing it All Together Ö Member Administration will contain centralized preferences for your company: Ö User Administration with the ability to create users and roles, customize user permissions Ö Member Profile to set your own preferences, such as: Ö Who to contact for ICH alerts, file validation failures, etc Ö Rules as to how IS will operate for your company (apply digital signatures, allow corrections, etc) Ö Processing Dashboard will provide a centralized overview of all submitted files and their statuses throughout the Integrated Settlement SIS – RA 44 –SIS Review 45 14 Sept 2010

Supporting Documents Ö Supporting documents can be attached to most record types (including Pax Prime Billings, Cargo, Miscellaneous) Ö Two types of supporting documents: Ö 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. Ö 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 – RA 44 –SIS Review 46 14 Sept 2010

Supporting Documents – With IS Integrated Settlement Processes Billed Airline IS-IDEC Enabling Processes IS-XML ICH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales Batch Transfer e. g. FTP SIS – RA 44 –SIS Review IS-WEB ACH ARC COMPASS™ NFP engine 47 Enabling Processes IS-WEB IS-XML Billing Airline IS-IDEC Prorate Engine Usage File Batch Transfer e. g. FTP 14 Sept 2010

Central Repository & Supporting Docs Ö What? Ö Any type of accepted supporting document (image, PDF, etc) Ö How long? Ö As long as the data is operationally required Ö When? Ö Before or after the associated record is uploaded (with “pending attachments” flag, which allows for notifications if not uploaded) Ö How? Ö Discussed in more detail during the Breakout Sessions SIS – RA 44 –SIS Review 48 14 Sept 2010

Benefits & Changes SIS – RA 44 –SIS Review 49 14 Sept 2010

Key Benefits of IS – Billing Carrier Ö Substantial savings due to: Ö Ö Ö Reduction in paper, postage and courier fees Reduction in internal paper handling and supply chain efforts No more loss of supporting documents and re-creation of invoices Automation of billing directly from uplifts (e. g. Auto-Billing) Optional à la carte service of “Integrated Settlement” SIS – RA 44 –SIS Review 50 14 Sept 2010

Key Benefits of IS – Billed Carrier Substantial savings due to: Ö Reduction in internal paper handling and supply chain efforts (e. g. registration, and reconciliation of invoices to payment) Ö Automated data Ö Less manual intervention Ö Data quality improvements on IS-IDEC Ö Pax Rejection Memos, Billing and Credit Memo electronically Ö Cargo Original AWB, Rejection and Charge Memo electronically Ö Supporting Documents immediately available in electronic presentation SIS – RA 44 –SIS Review 51 14 Sept 2010

Key Benefits of IS Ö Rejection Memo & Correspondence process improvements due to: Ö Enforcement of RAM rules (RM stage and correspondence) Ö Opportunity to detect duplicate rejections of the same original billing Ö All rejections and correspondence link to previous billings; information and supporting documents do not have to be re-uploaded Ö Time-limit reduction possibilities for Rejection Memos and Correspondence Ö Risk management and process improvements due to: Ö Fewer items outstanding for a shorter period of time Ö Future potential time-limit reduction for prime / original billings Ö Benefits to the environment due to reduction of paper and shipping Ö Alliance objectives complemented by SIS – RA 44 –SIS Review 52 14 Sept 2010

Airline Changes (where applicable) Ö Change from IDEC to IS-IDEC Ö Ö 500 bytes instead of 160 bytes Follow rules in RAM Some detail records mandatory (e. g. taxes) Other elements mandatory (e. g. Source Code) Ö Choose and implement other submission formats (IS-XML, IS-WEB) Ö Prepare to scan and upload supporting documents Ö Implement e-billing (possible legal implications) SIS – RA 44 –SIS Review 53 14 Sept 2010

Next Steps SIS – RA 44 –SIS Review 54 14 Sept 2010

Next Steps This Week Ö Breakout Sessions Back at Your Office Ö Airline Business Case (on the SIS website) Ö IS Participation Guide (see the breakout session) Ö Internal Planning and Budgeting (based on the IS Participation Guide and the Migration breakout session) SIS – RA 44 –SIS Review 55 14 Sept 2010

Thank you. SIS Website: www. iata. org/sis SIS – RA 44 –SIS Review 56 14 Sept 2010