Simplified Interline Settlement
RA44 – SIS Overview
Nicholas Coote
Director Industry Clearing Services
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
 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
 IDEC concept is maintained as IS-IDEC but with extended record lengths and new
types
 Settlement action directly from ET systems is enabled – Auto-billing
SIS P3 – Materials – RA44 Plenary
2
September 2010
Think about your IS Implementation
 You’ll save money by replacing
today’s processes with IS
 But the greatest potential of IS comes
from completely rethinking your
processes (especially in Misc)
 Going forward, you should think
about IS holistically
SIS P3 – Materials – RA44 Plenary
4
September 2010
SIS Phases - Overview
Phase 1
Feasibility
Phase 2
Requirements
Phase 3a
RFP
Phase 3b
Analysis
Phase 3c
Dev/Test/Pilot
Phase 1 – July 2007 to September 2007:

This concept was found to be feasible after changes to ICH and AIA processes, with further evaluation
and prioritization required
Phase 2 – January 2008 to September 2008:

Requirements gathering & RFI
Phase 3a – November 2008 to Feb 2009:

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RFP & Vendor Selection
Internal Business Case: Project & recurring costs, costs to the industry
Phase 3b – March 2009 to December 2009:

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Airline Business Case, Vendor contracting, Analysis, Requirement Finalizations
IATA Stage Gate Review
Phase 3c – January 2010 to August 2011:

Development, Test and Acceptance, Pilot Test
Move to Operation – September 2011
SIS P3 – Materials – RA44 Plenary
5
September 2010
Timeline Phase 3
High-level Project Plan
Nov 08 –
Dec 09
Jan 10 Apr 10
May 10 –
Feb 11
Mar 11–
Apr 11
May 11 –
Aug 11
Sep 2011
October
2011
Nov 11 Sep 2012
Apr
2013
SIS P3a/b – RFP & Specification
Vendor
IATA
Airlines
Steering Group
SIS P3c - Development & Pilot
Requirements review
Development & System test
UAT – Acceptance Tests
Pilot run
Operations & Roll-out
Member Profile set-up by carriers
Sandbox testing
IDEC parallel test & cut-over
Move to Operation
SIS Go-live
Pilot live
All carriers migrating
Potential mandated Pax/CGO prime
Old IDEC cut-off date
Potential mandated date overall
ICH Web cut-off date
SIS P3 – Materials – RA44 Plenary
6
September 2010
Project Update
 Project Status

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Pilot Kick Off completed - 5th and 6th of May, YMQ
Interface Kick-Off - 21st and 22nd of June, YMQ
All ISD’s with 3rd parties signed off
Key milestones agreed
Screen Prototype review with airlines and others
 Upcoming Activities

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User interface optimisation
Test Strategy finalization
Acceptance testing
Pilot testing
SIS P3 – Materials – RA44 Plenary
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September 2010
Objectives of the Pilot test

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Improve industry confidence in solution
Testing of the application in the final production infrastructure
Understand challenges of the migration with limited deployment
Benefit from end users feedback on key migration tools (CBT, User Guide,
Sandbox file testing, Training)
 But it is not :
 A formal sign-off on the application acceptance from industry – IATA does it
 Full coverage test – Acceptance Test done by IATA prior Pilot testing
SIS P3 – Materials – RA44 Plenary
8
September 2010
Pilot Participants
Pilot Name
Adria
Air Austral
Air China
Alitalia
Air India
American
British Airways
China Airlines
TBD – ACH
menber
IATA
JP
UU
CA
AZ
AI
AA
BA
Pax
MonaLisa
Edgar
IPRA
Sirax
REVERA
in-house
in-house
Cargo
Champ
Edgar
Cargo Spot
Misc
in-house
Edgar
GHCS
Rapid
MBS
SAP
in-house
CI
in-house
in-house
TBD
?
?
XB
SAP
Emirates
EK
Rapid
Rapid
Lufthansa
LH
Sirax
SAP
SITA
XS
SIS P3 – Materials – RA44 Plenary
Kenan
9
September 2010
Steering & Working Groups
Airline participation has been essential to the progress that SIS has made:
 Steering Group
 Passenger WG
 Cargo WG
 Miscellaneous WG
Over 60 participants from over 30 carriers, from ICH and ACH
 ICH Operations WG
SIS P3 – Materials – RA44 Plenary
10
September 2010
Note on Miscellaneous
 Misc billing is subject to the biggest changes of all
 No data standards currently in use – no IDEC equivalent
 Huge variations in invoices compared to passenger and cargo
 A ticket is a ticket, and an AWB an AWB, but a catering invoice has almost
nothing in common with an engineering invoice or a GDS billing
 IS-XML serves the same purpose as IS-IDEC, but designed to work in
conjunction with financial systems
 Over 80 business types have been identified and encoded in the design
 RAM A13 has been rewritten, and has gone from 5 pages to over 60 pages,
without the IS-XML breakdown
 Full details and breakouts will be provided at the ICH User Group in
KUL 20-22 October
SIS P3 – Materials – RA44 Plenary
11
September 2010
Why it is important to be in KUL
 There is substantial business re-engineering to be done at the outset, as
invoicing is often originated from many sources
 Person in charge of invoice not usually from the business end, unlike
Revenue Accounting. This is an extra challenge
 The structure of invoices needs to be changed in order to invoice
electronically and enable compliance with IS-XML standards
 ICH UG is where the e-invoicing, legal and financial management aspects will
be discussed
 The concept of Charge Category and Charge Code will be explained more
fully (remember: more than 80, each with their own mandatory field contents)
 The changes to UATP processing will be covered there
SIS P3 – Materials – RA44 Plenary
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September 2010
Principles of the Charging Model
 Cover costs – SIS will be run as a revenue-neutral service – which means
no profits but also no losses
 Fair and transparent to the end users – possible for IS users to calculate
costs in advance; no surprises
 Flattening cost curve – The largest carriers put far more than ten
thousand times the number of invoices through SIS than the smallest; their
SIS fees cannot be proportional
SIS P3 – Materials – RA44 Plenary
13
September 2010
SIS Fee Components
Component
ICH Member
ICH Web Fees
Same as today
($1,500 annually)
ICH Web/SIS Migration
Surcharge
Dependent on type of member and # of invoices
processed
($4,000 – $22,000 annually)
Declines over time as
Transaction Fees build up
IS Annual Fee
Dependent on type of member
($1,000 - $4,500 annually)
Transaction Fees
Per transaction dependent on previous years
history.
Additional 25% if entered through the IS-Web
(Invoice, Coupon, AWB,
supporting document kb, etc.)
SIS P3 – Materials – RA44 Plenary
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September 2010
SIS Fee Timing
 After SIS go-live
 Before you sign-up
 After you sign-up
 Before full migration
ICH-WEB Fee
ICH-WEB Fee
SIS Migration Surcharge
SIS Migration Surcharge
Transaction Fees
 After full migration*
 Through eternity
Transaction Fees
IS Annual Fee
Fees with blue background are only applicable to ICH members (not payable by
ACH-only carriers)
* “Full migration” means that you no longer submit claims outside of SIS (via the
ICH-WEB or the ACH Recap sheet)
SIS P3 – Materials – RA44 Plenary
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September 2010
Governance
 Two new permanent bodies to be proposed to the Financial
Committee, with new Terms of Reference
 SIS SC to be responsible for the oversight of the service, the funding,
and the prioritisation of changes and enhancements
 Made up as now of directly appointed representatives of the key
industry bodies (RAWG, ICHP, E-invoicing, ACH RAC, ACH, ICH),
together with 5 members from IATA airlines proposed by the industry
and approved by the DG
 E-invoicing Standards WG to be responsible for management and
development of the IS-IDEC and IS-XML standards, consistency
between the two, and integration of other standards if needed
 Made up of 10 airline and 2 non-airline users of the IS service
SIS P3 – Materials – RA44 Plenary
16
September 2010
IS Participation Agreement

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An industry standard agreement, with the same terms applicable to all
Will be published in the RAM, like IDEC, Sampling and First & Final
Will be in the B section as not currently a mandate
Will be published once review completed by the SIS SG
Needs to be signed in order to access the IS platform

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Update your airline profile information - key contacts
Notify us of any corrections to controlled data
Set up your users
No charges apply until SIS go-live in September
SIS P3 – Materials – RA44 Plenary
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September 2010
What this means for you
2011
2013
Sept
Apr
~19 months
Go-live
Mandate
Assuming you have at least one partner that is an early adopter…
 Go-live is P1 of September 2011
 You will begin to receive billings through IS, but you still receive the paper…
 Expected IS mandate is April 2013
SIS P3 – Materials – RA44 Plenary
18
September 2010
Sept 2011 – 2nd and 3rd RMs via SIS
2011
2013
Sept
Apr
Go-live,
RMs
You received an RM via IS and wish to reject (or initiate/continue correspondence)
 As per Revenue Accounting Manual rules, you must continue all rejections and
correspondence via IS
 Some of your partners are likely to migrate rejections and correspondence as quickly
as possible
 If you haven’t migrated these types yet, you’ll need to log into IS-WEB and create the
billing online
SIS P3 – Materials – RA44 Plenary
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September 2010
Dec 2011 – No longer receive all paper
2011
2013
Sept
Dec
Apr
3 months
Go-live,
RMs
No More
Paper
Your partner migrated some billing types (e.g. Pax primes) to IS 3 months ago
 A billing carrier can stop sending paper copies of invoices they’ve been sending
through IS for at least 3 months
 If you haven’t migrated these types yet, you’ll need to log into IS-WEB and
download the billing data (invoices, coupon listings, supporting documents, etc)
 Otherwise, you will see only the claim in the ICH F3 – no invoice as you know
it today
SIS P3 – Materials – RA44 Plenary
20
September 2010
Sept 2012 – IDEC service discontinued
2011
2013
Sept
Dec
3 months
Go-live,
RMs
Apr
Sept
9 months
No More
Paper
IDEC discontinued
The “old” IDEC service is discontinued
 You will no longer be able to send any billings using the old IDEC format and your
partners will not be able to bill you using the old IDEC format. This applies to primes
and whatever other billings are sent via IDEC.
 All data on old IDEC must be sent via IS; expect that you will receive all prime
billings via IS – a lot of effort if you’re still manual
SIS P3 – Materials – RA44 Plenary
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September 2010
Apr 2013 – No direct ICH/ACH claims
2011
2013
Sept
Dec
3 months
Go-live,
RMs
Apr
Sept
7 months
9 months
No More
Paper
IDEC discontinued
Mandate
Usage of Integrated Settlement is mandated
 ICH WEB and ACH recap sheet service will be disconnected for claims submission
 All claims must be submitted via IS and must include all relevant billing info
 All your partners will be fully migrated by now – every incoming billing will be via
IS
* The mandate date is an estimate; the exact date will depend on acceptance of the solution, sufficient
volumes, and approval by the responsible committees.
SIS P3 – Materials – RA44 Plenary
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September 2010
An operation needs staff…
 SIS Operations Manager
 Significant management experience of interline billing
 Understanding of all Clearing House processes
 Ability to lead change in the industry
 SIS Operations staff
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Experienced in at least one business stream (P, C, U, M)
Support acceptance and pilot testing of IS application
Provide set-up and customer support to migrating and migrated airlines
Could also be done as a secondment for 1-2 years
 If you are interested, or know someone who is, CV/biodata to
CooteN@iata.org
SIS P3 – Materials – RA44 Plenary
23
September 2010
Final word

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Integrated Settlement is on its way
In one year it will be live
It will affect everyone here
Make sure your teams are aware of the changes to billing rules and
processes
Make sure your Finance department is on board
Make sure your departmental champions are assigned
Make sure you are signed up, profile data is correct, and your staff
have log-on IDs and training before IS goes live
Look forward to a paperless world!
SIS P3 – Materials – RA44 Plenary
24
September 2010
Thank you.
Email:
sis@iata.org
SIS Website:
www.iata.org/sis
SIS P3 – Materials – RA44 Plenary
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September 2008
2010