1. First & Final Interline Billing Business Case

2. 2 The purpose n Mutually agreed billing without manual validation or pricing n Guaranteed transactions, no reject processing n Faster processing and settlement n Better cash-flow n Reduced costs to the industry

3. 3 The basic principles n Single proration business standard - NFP Two approved engines: ATPCO CIPS and Kale APEXTwo approved engines: ATPCO CIPS and Kale APEX n Consistent and mutually verifiable coupon valuations n Single source and rule set for interlineable taxes (RATD) n Standard data transmission sources TCN, BSP, CAT, (= ISR); IDECTCN, BSP, CAT, (= ISR); IDEC

4. 4 Summary of business benefits - proration n Neutral Fare Proration (NFP) No interline disputes over valuesNo interline disputes over values – Everyone gets the same result Mutually-agreed SPA applicationMutually-agreed SPA application – If you approved it, you cant disagree with it Use for Sample pricingUse for Sample pricing – Accuracy permits smaller sample sizes – Reduction in sample adjustments

5. 5 Summary of business benefits – reject processing n What rejects? There are no rejects! n No re-billings n No second pass, no third pass n No correspondence

6. 6 Summary of business benefits - administrative n No paperwork, handling costs, shipping costs, storage n Fewer staff in Interline, so more time available for added-value activities: Agent recoveriesAgent recoveries Fare auditingFare auditing Management informationManagement information

7. 7 Summary of business benefits - financial n Cash-flow clarity What you bill is what you getWhat you bill is what you get n No provisioning for rejects n No adjustments to management reporting for flown revenue variances n Mass of cost reductions from revenue accounting departments

8. 8 Summary of business benefits – added value n Extracts more value from existing data sources – TCN, BSP, IDEC, etc n Sales data repository – comprehensive data analysis possible n Single process for entire industry, managed by IATA But you can have bilateral arrangements on topBut you can have bilateral arrangements on top

9. 9 Basic pricing n Sign-up fee US$ 2,750 n Monthly administrative fees vary between US$ 747-US$ 1,820, depending on volume n Transaction price = US$ 0.093 n Post sales price = US$ 0.15

10. 10 Case outline – large non- sample airline

11. 11 Case outline – large sample airline

12. 12 Case outline – small, low cost airline

13. 13 Launch pricing offers! n Carriers signed by 31 March 2004 No sign-up feeNo sign-up fee No monthly management feeNo monthly management fee Transaction price = US$ 0.0675Transaction price = US$ 0.0675 Post Sales price = US$ 0.15Post Sales price = US$ 0.15 Minimum charge of 10,000 transactions per monthMinimum charge of 10,000 transactions per month n Carriers must achieve threshold volumes to maintain pricing 15% of IDEC billings within 6 months15% of IDEC billings within 6 months 25% of IDEC billings within 12 months25% of IDEC billings within 12 months 40% of IDEC billings within 18 months40% of IDEC billings within 18 months

14. 14 Launch pricing, second year n Carriers signed by 31 March 2004, from 18 months on: Provided a monthly average of 40% of IDEC volume is reached then launch prices continueProvided a monthly average of 40% of IDEC volume is reached then launch prices continue If volume threshold is not reached then standard transaction pricing will be applicableIf volume threshold is not reached then standard transaction pricing will be applicable Option to pay based on 40% thereafterOption to pay based on 40% thereafter Same minimum volume appliesSame minimum volume applies

15. 15 Case outline – large non- sample airline, launch pricing

16. 16 Case outline – large sample airline, launch pricing

17. 17 Case outline – small, low cost airline, launch pricing

18. 18 Q&A n For more information on business case examples contact Nick Coote or the AIA team n For a customised version of the business case to represent your airline, contact nick@mazro.com or cooten@iata.org nick@mazro.com cooten@iata.orgnick@mazro.com cooten@iata.org

19. 19 Some assumptions used in case XX

20. 20 Some assumptions used in case YY

21. 21 Some assumptions used in case ZZ