1. SIS Functional Review Kuala Lumpur ICH UG 2010 James SHANNON

2. October 2010SIS – ICH UG 2010 – SIS Refresher2 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. October 2010SIS – ICH UG 2010 – SIS Refresher3 Questions (Hidden slide)  What’s your familiarity with IS? (never heard of, little, etc)  What’s your role within your airline? (cargo only, represent cargo, Pax RA, etc)

4. October 2010SIS – ICH UG 2010 – SIS Refresher4 Project Overview

5. October 2010SIS – ICH UG 2010 – SIS Refresher5 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. October 2010SIS – ICH UG 2010 – SIS Refresher6 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. October 2010SIS – ICH UG 2010 – SIS Refresher7 IS Solution & Features

8. October 2010SIS – ICH UG 2010 – SIS Refresher8 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)

9. October 2010SIS – ICH UG 2010 – SIS Refresher9SIS – Materials – RA42 Breakout Interfaces & Validation9 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

10. October 2010SIS – ICH UG 2010 – SIS Refresher10 IS Overview – One Level Down IS-XML IS-IDEC Billing Record DB Supp. Doc. Usage File ATPCO Invoice PDF Billing Outward IS-WEB IS-XML IS-IDEC Supp. Doc. Supp. Doc. Digital Signature Validation & Correction (IS-WEB) Billing Carrier Billing Value Confirmation ATPCOATOS Interface ACH Interface ICH IS-WEB Validation Supp. Doc. Value Determination Digital Signature

11. October 2010SIS – ICH UG 2010 – SIS Refresher11 No F12 files. No recap sheets, either. Nothing that you submit to the ICH or ACH today can be submitted after migration.

12. October 2010SIS – ICH UG 2010 – SIS Refresher12 Main Features of IS  File Formats & Validation  Passenger  Time of Sales – NFP final, NFP non-final, and Own Prorate Storage  Value Determination & Autobilling  Sampling  Correspondence  Audit Trail  Differences for Cargo  Differences for Miscellaneous  Bringing It All Together  Member Administration  Processing Dashboard  Document Storage

13. October 2010SIS – ICH UG 2010 – SIS Refresher13 File Formats & Validation

14. October 2010SIS – ICH UG 2010 – SIS Refresher14 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

15. October 2010SIS – ICH UG 2010 – SIS Refresher15 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)

16. October 2010SIS – ICH UG 2010 – SIS Refresher16 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

17. October 2010SIS – ICH UG 2010 – SIS Refresher17 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

18. October 2010SIS – ICH UG 2010 – SIS Refresher18 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

19. October 2010SIS – ICH UG 2010 – SIS Refresher19 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)

20. October 2010SIS – ICH UG 2010 – SIS Refresher20 Breakdown Records  Breakdown Records have been added where necessary to provide for detailed, possibly repeating, data and to provide for large amounts of text  E.g., a coupon can have 0 or more tax breakdown records, each detailing a tax type and amount  Examples  Coupon Prime Billing breakdown records:  Tax, VAT breakdown  Breakdown records for Rejection, Billing, Credit Memos:  Reason Breakdown, Coupon Breakdown (with Tax & VAT)

21. October 2010SIS – ICH UG 2010 – SIS Refresher21 Example Breakdowns (Pax Rejection Memo) 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)

22. October 2010SIS – ICH UG 2010 – SIS Refresher22 Example Breakdown  Invoice  Invoice Header Information  Prime Billings (Source Code Summary)  1 st Stage Rejections (Source Code Summary)  2 nd Stage Rejections (Source Code Summary)  3 rd Stage Rejections (Source Code Summary)  Billing Memos (Source Code)  Credit Memos (Source Code Summary)  Invoice Summary  Invoice VAT Summary ($100)  Invoice VAT Breakdown ($80)  Invoice VAT Breakdown ($20)

23. October 2010SIS – ICH UG 2010 – SIS Refresher23 Example Breakdown  Billing Memos ($100) (Source Code Summary)  Billing Memo #1 ($10)  Billing Memo #2 ($50)  Billing Memo #3 ($40)  VAT Summary ($20)  VAT Breakdown ($5)

24. October 2010SIS – ICH UG 2010 – SIS Refresher24 Example Breakdown  Billing Memo #3 ($40)  Coupon #1 ($10)  Coupon #2 ($10)  Coupon #3 ($20)  VAT Summary  VAT Breakdown (multiple)  Tax Summary  Tax Breakdown (multiple)

25. October 2010SIS – ICH UG 2010 – SIS Refresher25 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)  Enforces timeframes and “order” (1 st RM -> 2 nd RM -> 3 rd RM)  Ensures file is properly formed  Other validations

26. October 2010SIS – ICH UG 2010 – SIS Refresher26 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

27. October 2010SIS – ICH UG 2010 – SIS Refresher27 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 only ICH members  Mandatory Fields  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

28. October 2010SIS – ICH UG 2010 – SIS Refresher28 Passenger

29. October 2010SIS – ICH UG 2010 – SIS Refresher29 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)

30. October 2010SIS – ICH UG 2010 – SIS Refresher30 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

31. October 2010SIS – ICH UG 2010 – SIS Refresher31 Neutral Fare Prorates – With IS  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

32. October 2010SIS – ICH UG 2010 – SIS Refresher32 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)

33. October 2010SIS – ICH UG 2010 – SIS Refresher33 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)

34. October 2010SIS – ICH UG 2010 – SIS Refresher34 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)

35. October 2010SIS – ICH UG 2010 – SIS Refresher35 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)

36. October 2010SIS – ICH UG 2010 – SIS Refresher36 Sampling  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

37. October 2010SIS – ICH UG 2010 – SIS Refresher37 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

38. October 2010SIS – ICH UG 2010 – SIS Refresher38 Pax & Cargo Correspondence  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

39. October 2010SIS – ICH UG 2010 – SIS Refresher39 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)

40. October 2010SIS – ICH UG 2010 – SIS Refresher40 Audit Trail (example view) 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

41. October 2010SIS – ICH UG 2010 – SIS Refresher41 Key Differences for Cargo & Misc

42. October 2010SIS – ICH UG 2010 – SIS Refresher42 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. October 2010SIS – ICH UG 2010 – SIS Refresher43 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. October 2010SIS – ICH UG 2010 – SIS Refresher44 Bringing it Together

45. October 2010SIS – ICH UG 2010 – SIS Refresher45 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. October 2010SIS – ICH UG 2010 – SIS Refresher46 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. October 2010SIS – ICH UG 2010 – SIS Refresher47 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. October 2010SIS – ICH UG 2010 – SIS Refresher48 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. October 2010SIS – ICH UG 2010 – SIS Refresher49 Benefits & Changes

50. October 2010SIS – ICH UG 2010 – SIS Refresher50 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. October 2010SIS – ICH UG 2010 – SIS Refresher51 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. October 2010SIS – ICH UG 2010 – SIS Refresher52 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. October 2010SIS – ICH UG 2010 – SIS Refresher53 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. October 2010SIS – ICH UG 2010 – SIS Refresher54 Next Steps

55. October 2010SIS – ICH UG 2010 – SIS Refresher55 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. October 2010SIS – ICH UG 2010 – SIS Refresher56 Thank you. SIS Website: www.iata.org/sis