1. Introduction to SIS 2009 ICH User Group James Shannon, IATA

2. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS2 Goal & Agenda  Project Overview  The Need For IS  Vision  IS Solution & Features  Benefits & Changes  Next Steps To familiarize you with Simplified Interline Settlement and prepare you for tomorrow’s breakout sessions

3. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS3 Questions (Hidden slide)  What’s your familiarity with IS? (never heard of, little, etc)  Were you briefed before coming here?  What’s your role within your airline? (Finance only, Revenue Accounting)  What’s your familiarity with Revenue Accounting? (IS-IDEC, etc)

4. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS4 Project Overview

5. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS5 Interline Settlement - Today ICH ATPCO (incl F&F pre IDEC Validation) Billed Entity Billing Entity Cargo IDEC File (monthly) Pax IDEC File (monthly) F12 – (weekly) F1 – net amounts of inv F2 - summary Cargo IDEC File (monthly) Pax IDEC File (monthly) F3– (weekly) Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) AIA F&F F&F: receives NFP value ARC-Compass (NFP storage) Previously released sales record prorate engine prorate engine GDSs BSPs ACH Recap sheets - weekly Settlement sheets – (weekly)

6. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS6 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  IDEC formats are maintained with increased record types  Passenger 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  Settlement action directly from ET systems is enabled

7. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS7 SIS Phase 3 Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation  Phase 1 – Feasibility followed FC96 in May 2007  Phase 2 – Requirements Development ran from December 2007-July 2008. Included the initial RFI  Phase 3 was too large to handle as a single operation, and was split:  Phase 3a became the RFP and selection process, from which the Kale/iPayables proposal was chosen  Phase 3b is the current System Design and requirements finalisation phase  Phase 3c is the System Development and Pilot testing

8. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS8 Phase 3 - Steering & Working Groups Airline participation has been essential to the progress that SIS had made:  Steering Group  Passenger WG  Cargo WG  Miscellaneous WG  IT WG  Over 60 participants from over 30 carriers  ICH Operations WG

9. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS9 IS Solution & Features

10. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS10 Interline Settlement - Today ICH ATPCO (incl F&F pre IDEC Validation) Billed Entity Billing Entity Cargo IDEC File (monthly) Pax IDEC File (monthly) F12 – (weekly) F1 – net amounts of inv F2 - summary Cargo IDEC File (monthly) Pax IDEC File (monthly) F3– (weekly) Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) AIA F&F F&F: receives NFP value ARC-Compass (NFP storage) Previously released sales record prorate engine prorate engine GDSs BSPs ACH Recap sheets - weekly Settlement sheets – (weekly)

11. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS11SIS – Materials – RA42 Breakout Interfaces & Validation11 Integrated Settlement Billed Entity Integrated Settlement Billing Entity Overall Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Overall Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC

12. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS12 No F12 files. No recap sheets, either. Nothing that you submit to the ICH or ACH today can be submitted after migration.

13. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS13 Main Features of IS  File Formats & Validation  Passenger  Time of Sales – NFP final, NFP non-final, and Own Prorate Storage  Value Determination & Autobilling  Sampling (remove)  Correspondence  Audit Trail  Differences for Cargo  Differences for Miscellaneous  Bringing It All Together  Member Administration  Processing Dashboard  Document Storage

14. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS14 File Formats & Validation

15. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS15 File Formats Billed Entity Integrated Settlement Billing Entity Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Send files (or enter online) Receive (or download) invoices Validation Format Conversion Format Conversion:  Billed Entity’s choice of format does not depend on the billing carrier’s

16. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS16 Input & Output Formats (Hidden Slide)  Files (upload & download)  IS-IDEC  IS-XML  IS-WEB  Others – Usage File for Pax  All contain same fields for a given record type  Billing carrier can use any format at any time (“input combination”)  Billing carrier’s choice doesn’t affect billed carrier (“format conversion”)  Available formats depend on functionality (see e.g. Misc)

17. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS17 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

18. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS18 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 Miscellaneous 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

19. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS19 IS-WEB Record Structure  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  Won’t be as user-friendly as a dedicated, local system  Not an alternative to a Revenue Accounting system

20. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS20 IS-WEB For Everybody IS-WEB is also used for other web-based services  Audit Trail  Pax & Cargo 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)

21. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS21 Breakdown Records  Breakdown Records have been added where necessary to provide for detailed, possibly repeating, data or to provide for large amounts of text  In PAX invoices, a coupon can have 0 or more tax breakdown records, each detailing a tax type and amount  In Misc invoices, a “Ground Handling – Cleaning” line item contains a breakdown of line item detail records which show aircraft and route information

22. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS22 Example Breakdowns (Pax Rejection Memo) (Hidden Slide) Rejection Memo (SFI = 21) Reason Breakdown (SFI = 31) Reason Breakdown (SFI = 31) Coupon Breakdown (SFI = 32) Coupon Breakdown (SFI = 32) Coupon Breakdown (SFI = 32) Tax Breakdown (SFI = 33) Tax Breakdown (SFI = 33) Tax Breakdown (SFI = 41) VAT Breakdown (SFI = xx) VAT Breakdown (SFI = xx) VAT Breakdown (SFI = 34)

23. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS23 Example Breakdowns (Simplistic Misc Invoice) Invoice Invoice Header Line Item Tax Details Line Item Detail Attachment Aircraft Details

24. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS24 Validation Billed Entity Integrated Settlement Billing Entity Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Send files (or enter online) Receive (or download) invoices Validation Format Conversion Validation:  Guarantees links between records (e.g. 2 nd and 1 st RMs, Misc “referenced invoice #”)  Enforces timeframes and “order” (1 st RM -> 2 nd RM -> 3 rd RM)  Ensures file is properly formed  Other validations

25. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS25 Validation (Hidden Slide)  Validation will be necessary in the Integrated Settlement environment as quality data is essential:  No paper invoice or “back up” to determine what the electronic data means  Uploaded data is no longer a data exchange file in support of a paper invoice, but rather the base for invoicing and settlement  Billed entity will always be able to trust incoming data  Some existing fields will continue to be passed through the system without validation for use on a bilateral basis

26. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS26 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 ICH-only members  Mandatory Fields  Line Item Net Price, Source Code, Ticket Issuing Airline, Coupon Number, etc  Rejection & Correspondence Timeframes and Order Enforced  1 st RM  2 nd RM  3 rd 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

27. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS27 Passenger

28. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS28 Time of Sales – Now (Optional) ATPCO (incl F&F pre IDEC Validation) Billed Airline Billing Airline Pax IDEC File (monthly) AIA F&F ARC-Compass (NFP storage) Previously released sales record prorate engine prorate engine GDSs BSPs Sales Records F&F: receives NFP value All: May receive sales records Optional Proration, Storage, Switching Sales Records, NFPs ICH F12 – (weekly) F1 – net amounts of inv F2 - summary F3– (weekly) ACH Recap sheets - weekly Settlement sheets – (weekly)

29. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS29 Time of Sales – With IS Billed Airline Integrated Settlement Billing Airline Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Sales Records, NFPs, & Sales Carrier’s Own Prorates Sales Records or Own Prorates Optional Proration (final & non-final), Storage, Switching

30. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS30 Neutral Fare Prorates – With IS (Hidden)  NFP engine will be available to carriers for FIRST & FINAL™ (NFP Final) and non-F&F (NFP non-final) purposes  NFP non-final could minimize rejections without any obligation by the carriers  Own prorate storage and switching will allow the sales carrier to upload prorates, which are then forwarded or made available to the billing carrier

31. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS31 Time of Billing – Now ATPCO (incl F&F pre IDEC Validation) Billed Airline Billing Airline Pax IDEC File (monthly) AIA F&F ARC-Compass (NFP storage) Previously released sales record prorate engine prorate engine GDSs BSPs F&F: receives NFP value All: May receive sales records Pre-IDEC Validation for F&F NFP values (updates the PMI)

32. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS32 Submitting Billing Information – With IS Billed Airline Integrated Settlement Billing Airline Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Billing File / Data (similar to today) Billing Value Confirmation (Leaves “Original PMI”, updates “Value Confirmation PMI”) Billing File / Data (similar to today)

33. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS33 Time of Billing – IS Value Determination Billed Airline Integrated Settlement Billing Airline Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Usage File Prorate Values Billing File / Data (similar to today) Billing File / Data (similar to today)

34. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS34 Time of Billing – IS Auto-Billing Billed Airline Integrated Settlement Billing Airline Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Usage File Weekly Invoice Posting File Daily Revenue Recognition File No Billing File From Carrier Billing and Invoice Files Created Within IS Billing File / Data (similar to today)

35. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS35 Sampling (Hidden)  Provisional Invoice (as today with prime coupon billing, but with elements from Forms A and B)  Universe Adjustment (Form C)  Digit Evaluation (Forms D and E)  Form G (ACH)  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

36. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS36 Pax & Cargo Correspondence Billed Airline Integrated Settlement Billing Airline Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Enter Correspondence (including attachments) Receive Correspondence (including attachments) Validation

37. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS37 Pax & Cargo Correspondence (Hidden)  Correspondence can include an “authority to bill” flag which identifies when the authority to bill has been issued  Not tied to settlement periods like transactions in Integrated Settlement – real-time and similar to e-mail but via IS-WEB interface  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

38. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS38 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)

39. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS39 Audit Trail (Pax example view) (Hidden) ActivityDateRecord / Supporting Docs 1 st Correspondence1 May$35; “I do not agree with your calculation…” 3 rd Rejection1 Apr$50; Long Explanation.doc 2 nd Rejection1 Mar$100; “See attached”; ticket.jpg 1 st Rejection1 Feb$100; “No coupon in our system” Prime Billing1 Jan$100 Create Correspondence

40. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS40 Audit Trail (Misc example view) ActivityDateDetails 2 nd Rejection1 MarInvoice #1290 Amount: $85 1 st Rejection1 FebInvoice #094834 Amount: $100 Original Invoice1 JanInvoice: #1284 Amount: $100 Create Rejection

41. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS41 Key Differences for Cargo & Misc

42. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS42 Key Differences for Cargo  All cargo 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

43. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS43 Key Differences for Miscellaneous  IS-IDEC cannot be used for Miscellaneous billings (only IS-XML and IS-WEB)  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  Examples: Charge CategoryCharge Code GroundHandlingBaggage GroundHandlingCargo PartnerAllianceFF Miles ----

44. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS44 Bringing it Together

45. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS45 Bringing it All Together  Member Administration will contain centralized preferences for your company:  User Administration with the ability to create users and roles, customize user permissions  Member Profile to set your own preferences, such as:  Who to contact for ICH 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

46. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS46 Supporting Documents  Supporting documents can be attached to most record types (including Pax Prime Billings, Cargo, Miscellaneous)  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.

47. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS47 Supporting Documents – With IS Billed Airline Integrated Settlement Billing Airline Enabling Processes Billing & Invoicing Processes Central Repository “Digital Signature” Company Enabling Processes Settlement Processes ICHACH Processes at time of Sales NFP engine ARC COMPASS™ Prorate Engine IS-WEB IS-XML IS-IDEC Usage File IS-WEB IS-XML IS-IDEC Batch Transfer e.g. FTP Batch Transfer e.g. FTP

48. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS48 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)  How?  Discussed in more detail during the Breakout Sessions

49. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS49 Benefits & Changes

50. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS50 Key Benefits of IS – Billing Carrier  Substantial savings due to:  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”

51. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS51 Key Benefits of IS – Billed Carrier Substantial savings due to:  Reduction in internal paper handling and supply chain efforts (e.g. registration, and reconciliation of invoices to payment)  Automated data  Less manual intervention  Data quality improvements on IS-IDEC  Pax Rejection Memos, Billing and Credit Memo electronically  Cargo Original AWB, Rejection and Charge Memo electronically  Supporting Documents immediately available in electronic presentation

52. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS52 Key Benefits of IS  Rejection Memo & Correspondence process improvements due to:  Enforcement of RAM rules (RM stage and correspondence)  Opportunity to detect duplicate rejections of the same original billing  All rejections and correspondence link to previous billings; information and supporting documents do not have to be re-uploaded  Time-limit reduction possibilities for Rejection Memos and Correspondence  Risk management and process improvements due to:  Fewer items outstanding for a shorter period of time  Future potential time-limit reduction for prime / original billings  Benefits to the environment due to reduction of paper and shipping  Alliance objectives complemented by SIS

53. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS53 Airline Changes (where applicable)  Change from IDEC to IS-IDEC  500 bytes instead of 160 bytes  Follow rules in RAM  Some detail records mandatory (e.g. taxes)  Other elements mandatory (e.g. Source Code)  Choose and implement other submission formats (IS-XML, IS-WEB)  Prepare to scan and upload supporting documents  Implement e-billing (possible legal implications)

54. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS54 Next Steps

55. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS55 Next Steps This Week  Breakout Sessions Back at Your Office  Airline Business Case (on the SIS website)  IS Participation Guide (see the breakout session)  Internal Planning and Budgeting (based on the IS Participation Guide and the Migration breakout session)

56. ATH – 27/28 Oct 2009SIS P3 – ICHUG09 – Intro to SIS56 Thank you. Email: sis@iata.org SIS Website:  www.iata.org/sis www.iata.org/sis