Simplified Interline Settlement:Airline Preparedness Survey        Industry Research I Simplified Interline Settlement : A...
Contents        Overview                                                            01        Executive Summary           ...
Overview: Simplified Interline Settlement (SIS)The Simplified InterlineSettlement (SIS) projectaims to simplify interlineb...
Executive SummaryThe Simplified Interline Settlement:                                 Of course, there are some airline th...
Survey ParticipationThe SIS Preparedness Survey saw active participation from Airlines across the globe. A total of 56 air...
Key FindingsAirlines intent for using IATAs Simplified Interline Settlement (SIS)                              No, we oper...
Airlines understanding of changes required for IATAs SIS                                     Clear      Not Clear        S...
Airline readiness for implementing technology changes for SIS                                 Already in process          ...
Need for training on Simplified Interline Settlement (SIS)                                Not Sure                        ...
Methodology                                                                                Web based questionnaire (survey...
CORPORATE HEAD OFFICE                                                                                           INDIA     ...
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Survey report simplified interline settlement (sis) - airline preparedness survey wave 1

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Survey report simplified interline settlement (sis) - airline preparedness survey wave 1

  1. 1. Simplified Interline Settlement:Airline Preparedness Survey Industry Research I Simplified Interline Settlement : Airline Preparedness Survey
  2. 2. Contents Overview 01 Executive Summary 02 Survey Participants 03 Key Findings 04 Methodology 08Industry Research I Simplified Interline Settlement : Airline Preparedness Survey
  3. 3. Overview: Simplified Interline Settlement (SIS)The Simplified InterlineSettlement (SIS) projectaims to simplify interlinebilling, and remove paperfrom the entire process, IATA states the vision for SIS project as follows:delivering tangible To fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefitsfinancial benefits to the to the industry.airline industry. ä are electronic and not backed by paper ? InvoicesThe SIS solution will äpassenger billings do not require paper invoices ? Primeencompass Passenger, or coupon listingsCargo, Miscellaneous, ? IDEC formats are maintained with increased record types äand UATP interlinebillings and ICH ? Passenger rejects, including any attachments, are submitted ä electronically without papersettlements äand Mail billings are electronic and paperless ? Cargo ? Miscellaneous billings (including any supporting ä information) are electronic, whether as data or with attachments Settlement action is enabled directly from ET systems ä Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 01
  4. 4. Executive SummaryThe Simplified Interline Settlement: Of course, there are some airline that are doingAirline Preparedness Survey builds on the insights we everything they can to become SIS compliant, butsought and bring together a snapshot of airlines there are others who are not even aware what benefitspreparedness for Simplified Interline Settlement (SIS), this industry change brings for the airlines.which have presented in this report. Kale Consultants Limited would like to thank all thoseMajority of the airlines surveyed have welcomed the who participated in our survey.initiative taken by IATA for developing a single platformfor communication amongst airlines. The information shared by participants has enabled us to create a benchmark report which will provide freshSome of the world’s major airlines consider SIS at high insights to all those associated with the airlinepriority 80 percent of the airlines surveyed consider SIS industry today.as essential initiative for the airline industry.There is a lack of clear understanding and need fortraining among some airlines related to the changesrequired in their present systems to become SIScompliant.Airlines are citing SIS as a singleplatform where they will submit a singleelectronic billing file that will beconverted into an invoice and asettlement file, which in turn will be sentto the billed airline, and cleared throughthe relevant clearinghouse. Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 02
  5. 5. Survey ParticipationThe SIS Preparedness Survey saw active participation from Airlines across the globe. A total of 56 airlines from allcontinents participated in the survey ranging from network carriers to low cost carriers.Participation Statistics South America 7% Africa 11% North Tier 1 America 23% 14% Tier 3 45%Middle East 7% Asia Pacific 31% Tier 2 Europe 30% 32% Region Wise Tier Wise Tier Classification (Passenger carried) Tier 1 Above 15 Million Tier 2 Between– 3 – 15 Million Tier 3 Below 3 Million Director Level 31% Manager Level 69% Detail Number of Airline Responded 56 Airline Number of Person Responded 71 Respondents Respondents Profile *All percentages are based on Airline responses and not individual responses Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 03
  6. 6. Key FindingsAirlines intent for using IATAs Simplified Interline Settlement (SIS) No, we operate on direct settlement 5% Today interline billing process involves sharing paper documents duplication of efforts. Even moving to e-ticketing hasn’t solved the problems as rejections and many non ticket-related processes, such as handling and catering are still supported by paper documents. Over 200 tons of invoices and supporting documents are being shipped between airlines around the world each year to support the airlines interline billing and settlement process. Yes, 95% More than 95% of airlines surveyed foresee various benefits associated with IATA SIS initiative as it removes the paper and delivers financial benefits to the airlines. Airline Willingness It involves electronic invoicing, which simplifies interline billing of for SIS passenger, cargo and miscellaneous items. 80 % of airlines surveyed consider Simplified Interline Settlement (SIS) at High Priority *All percentages are based on Airline responses and not individual responses Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 04
  7. 7. Airlines understanding of changes required for IATAs SIS Clear Not Clear Somewhat Clear The greatest potential of Simplified Interline Settlement (SIS) comes from complete redesigning of process flows. Passenger 34% 16% 50% There is substantial business re-engineering to be done at the outset, as invoicing often originates from many Cargo 29% 36% 36% sources.Miscellaneous 16% 43% 41% Understanding of changes required for IATAs SIS. 66 % of airlines surveyed are in planning stage for the largest industry change Simplified Interline Settlement (SIS) Airlines are already forming employee groups and have started planning for industry changes. Majority of the airlines surveyed understand what changes will be required in passenger system to be SIS compliant, but lack understanding related to changes required in case of miscellaneous and*All percentages are based on Airline responses and not individual responses cargo system to become SIS compliant. Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 05
  8. 8. Airline readiness for implementing technology changes for SIS Already in process 7% In order to be SIS compliant airlines will be required to change their internal systems and business processes in passenger, cargo and finance areas. The return on investment made by carriers in the short term will be balanced by substantial long-term cost savings. Not Sure 23% Airlines using legacy systems or in-house developed systems will Planning Stage require more than 12 months to get completely ready for IATA’s 70% Simplified Interline Settlement (SIS) compliance. Airlines which have outsourced their accounting system to vendors have shown dependency for technology change. Airlines Readiness on SIS 77 % of the airlines surveyed will require more than 9 months getting completely ready for leveraging the benefits of SIS compliance. *All percentage calculated are based on Airline response and not individual response Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 06
  9. 9. Need for training on Simplified Interline Settlement (SIS) Not Sure Airlines surveyed consider training is very much required to have a 4% clear understanding of changes required for SIS, easy to use, and No ideally suited for their applications. 7% Airline who have hosted their Revenue Accounting (RA) system and those with Legacy system (developed in-house) have shown keen To Some interest in training. Extent 23% Yes, Completely Airlines plan to migrate one- by-one as per the system readiness and 66% comfort in handling. Airlines need for Training on SIS 37 % of airlines surveyed are yet to take a decision on migration mode (one – by – one / all together) of billing categories to SIS*All percentages are based on Airline responses and not individual responses Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 07
  10. 10. Methodology Web based questionnaire (survey window open between July - August 2010) Respondents answered a variety of questions pertaining to Airline Prepardness for SIS Data Collection + Data AnalysisKale Consultants Limited distributed a survey questionaireto Airline Revenue Accounting Heads and other high-levelexecutives.Most of the questions used simple check box, multiplechoice, or ranking format, but there were several open-ended questions as well. The extensive nature of the Reportquestion set was intended to maximize depth ofinformation rather than breadth of responses. The titles ofmany of the charts in this report paraphrase the actualsurvey question. Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 08
  11. 11. CORPORATE HEAD OFFICE INDIA 1st Floor, Modi House, Naupada, Eastern Express Highway, Thane (W) - 400 602. Tel : +91-22-6780-8888 Fax : +91-22-6780-8899 Email: airlines@kaleconsultants.com GLOBAL OFFICES USA 33, 150 Morris Ave. Suite 203 Springfield, NJ 07081 Tel : +1-973-376-8002 Fax : +1-973-376-8006 UK 100A High Street Hampton TW12 2ST United Kingdom Tel : +44-20-8783-2392 Fax : +44-20-8783-2391 Other Offices and Delivery Centres USA: Chicago - IL, Brasstown - NC India: Mumbai, Pune, Goa New Zealand: Christchurch©2010 Kale Consultants Limited. All rights reserved. The ‘Kale’ logo and product and services mentioned herein are either registered trademark ortrademarks pending registration of Kale Consultants Limited, or its affiliated entities. Dec 20 2010

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