1. Simplified Interline Settlement:
Airline Preparedness Survey
Industry Research I Simplified Interline Settlement : Airline Preparedness Survey

2. Contents
Overview 01
Executive Summary 02
Survey Participants 03
Key Findings 04
Methodology 08
Industry Research I Simplified Interline Settlement : Airline Preparedness Survey

3. Overview: Simplified Interline Settlement (SIS)
The Simplified Interline
Settlement (SIS) project
aims to simplify interline
billing, and remove paper
from 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 benefits
financial benefits to the to the industry.
airline industry.
ä are electronic and not backed by paper
? Invoices
The SIS solution will äpassenger billings do not require paper invoices
? Prime
encompass Passenger, or coupon listings
Cargo, Miscellaneous,
? IDEC formats are maintained with increased record types
ä
and UATP interline
billings and ICH ? Passenger rejects, including any attachments, are submitted
ä
electronically without paper
settlements
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. Executive Summary
The Simplified Interline Settlement: Of course, there are some airline that are doing
Airline Preparedness Survey builds on the insights we everything they can to become SIS compliant, but
sought and bring together a snapshot of airlines there are others who are not even aware what benefits
preparedness 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 those
Majority of the airlines surveyed have welcomed the who participated in our survey.
initiative taken by IATA for developing a single platform
for communication amongst airlines. The information shared by participants has enabled us
to create a benchmark report which will provide fresh
Some of the world’s major airlines consider SIS at high insights to all those associated with the airline
priority 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 for
training among some airlines related to the changes
required in their present systems to become SIS
compliant.
Airlines are citing SIS as a single
platform where they will submit a single
electronic billing file that will be
converted into an invoice and a
settlement file, which in turn will be sent
to the billed airline, and cleared through
the relevant clearinghouse.
Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 02

5. Survey Participation
The SIS Preparedness Survey saw active participation from Airlines across the globe. A total of 56 airlines from all
continents 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. Key Findings
Airlines intent for using IATA's 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. Airlines understanding of changes required for IATA's 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 IATA's 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. 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. 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. 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
Analysis
Kale Consultants Limited distributed a survey questionaire
to Airline Revenue Accounting Heads and other high-level
executives.
Most of the questions used simple check box, multiple
choice, or ranking format, but there were several open-
ended questions as well. The extensive nature of the Report
question set was intended to maximize depth of
information rather than breadth of responses. The titles of
many of the charts in this report paraphrase the actual
survey question.
Industry Research I Simplified Interline Settlement : Airline Preparedness Survey 08

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Dec 20 2010