Preparing for SIS: Are you there yet? Philip Fernandes

Preparing for SIS: Are you there yet? Philip Fernandes

Agenda SIS Phases Objectives and Benefits of SIS High Level Process Flow Key Change Due to SIS Migration to SIS

Objectives of SIS Project Fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefits to the industry Interline settlement process will be completely paperless, including supporting documents, for Passenger, Cargo, and Miscellaneous billings Invoices will be completely electronic and all necessary components such as digital signatures and electronic archiving will be made available to carriers The billing files submitted by airlines will contain high-quality data sufficient for invoicing and reconciliation There will be no reconciliation issues between the billing, settlement, and invoice files

Expected benefits from SIS Project IATA estimates that the SIS Project will save the industry $ 400 million per year Higher Automation and quality of data Printing and Shipping Costs 200 tonnes of paper invoices and supporting documents will be eliminated Trapping potential leakages Cash Flow Increase and Control Potential for reducing the Rejection timelines Potential for reducing the Settlement timelines Daily Settlement in the near future

SIS Phases - Overview Phase 1 July 2007 to September 2007: Phase 2 January 2008 to September 2008: o Requirements gathering & RFI Phase 3a November 2008 to Feb 2009: o RFP & Vendor Selection o Internal Business Case: Project & recurring costs, costs to the industry Phase 3b March 2009 to April 2010: Phase 1 Feasibility o Airline Business Case, Vendor contracting, Analysis, Requirement Finalizations o IATA Stage Gate Review Phase 3c TBD: Phase 2 Requirements Phase 3a RFP o Development, Test and Acceptance, Pilot Test Move to Operation TBD (Tentative Sept 2011) Phase 3b Analysis Phase 3c Dev/Test/Pilot

High Level Process Flow Billing Entity Billed Entity

IS-Validation Two Step Validation Process o Step 1: Sanity Checks Check for File Construction Errors For e.g. Invalid file naming convention, Duplicate File submission, Invalid characters in the file, Records not as per IS-IDEC File Specification, etc. Entire File rejected o Step 2: Detail Validation Check individual fields For e.g. Currency of Listing: Should be a valid ISO Numeric Currency code Entire File/Individual Invoice rejected based in the Billing Participants IS- Member Profile Setting

Validation Error Correction Sanity Check Errors o Participant will fix the errors reported by SIS and submit a fresh file. Detail Validation Errors o Two types of Errors Non Correctable Errors: Such type of Invoices will have to be deleted from IS, error fixed within the Revenue Accounting System and re-submitted For e.g. Sum Totals of individual transactions not equal to the Source Code totals Correctable Errors: Participants can correct the error over IS-WEB, facility to Batch update errors provided For e.g. Invalid City Code

Key Changes due to SIS Invoice Numbers o 10 Alphanumeric o Need to be unique across all Billing Categories (PAX,CGO,MISC,UATP) within a calendar year Breakdown Records o Mandatory to provide breakdown records in case certain type of values are billed. For e.g. If a coupon is billed for tax amounts, the tax code level breakdown needs to be provided If an Air Waybill is billed for VAT amounts, then the VAT breakdown details (VAT base amount, VAT %, VAT description, etc) will have to be provided

Key Changes due to SIS Supporting Documents o Have to be provided in electronic format o Need to link the electronic documents to the respective Invoice/transactions Financial Processes o Settlement of Invoices triggered through the Billing File (IS-IDEC, IS-XML) rather than existing Settlement Files (ICH Web F12, ACH Recap Sheet) o New Process required to control and monitor the Settlement Process o New Process to handle Suspended Airline billings and Late Submissions

Key Changes due to SIS Member Profile Setup: Centralized functionality to configure the processing done by Integrated Settlement System o Need to understand the various option available on the Member Profile Mandatory fields in Billings o Source Codes, Reason Codes, etc. Rejection/Billing/Credit Memo Handling o The amounts used to compute the Rejected amount will be the Total billing value instead of the Difference amount used today Stage 1,3 Rejected Value = Billed Value Accepted Value Stage 2 Rejected Value = Accepted Value Billed Value

Overall Processes Overall Processes Migration Overview Web F12 Hard Cutover! Non-migrated claims Non-migrated Old IDEC Integrated Settlement Settlement Processes Recap Sheets Old IDEC Non-migrated claims Non-migrated ICH ACH Billed Entity IS-WEB IS-XML IS-IDEC Digital Signature Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS NFP engine IS-WEB IS-XML IS-IDEC Usage File Billing Entity Prorate Engine

Migration Timelines Activity Potential Date* Pilot Run May Aug 2011 Go Live September 2011 Hard Cut-Over September 2011 Mandate date for PAX Prime Billings and CGO Original Billings in IS-Format (Discontinuation of Old IDEC) Go-live + 12 months (September 2012) Potential mandate date for SIS Go-live + 19 months (Apr 2013) * Planned Dates

Questions? Are you there yet!!!

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