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Slide1

ZMF AGM 2017

29 & 30 March 2017Geneva, Switzerland

Welcome

Slide2

Introduction and Welcome

Marco

Alvarenga

Head Airline Participation Management

IATA

Slide3

Housekeeping

Toilets

Coffee

machines

Lunch options

WIFI & laptop usage

Dinner

Timing

Slide4

New Members

4

ZMF AGM 2017 – Geneva

Who’ve joined since last AGM

Slide5

5

New Full Member:Abidjan – Ivory CoastHF flies with Airbus 320/319 and regional Dash8 toDestinations in West & East Africa

Slide6

6

New Full Member:Lisbon – PortugalYU flies schedule with Boeing 767/777 to Bissau (Guinea-Bissau)and also Charter/Wet Lease.

Slide7

7

New Full Member:Bern – SwitzerlandSX flies schedule with Dornier 328 & Saab 2000 to DestinationSwitzerland – Europe e.g BRN-MUC or BSL-LCY

Slide8

8

New Full Member:Florida – U.S.AVC positioned their aircraft throughout the continentalUS for scheduled routes

Slide9

9

New Full Member:Lisbon – PortugalWI flies charter & wet leased with Boeing / Airbus &ATR

Slide10

10

Associate Member:Dublin – IrelandRE wet leased specialist operates scheduled servicesin Europe on behalf Aer Lingus Regional & Flybe

Slide11

11

New associate Member:Hamburg – GermanyAHO flies world wide executive charter with privatejets.

Slide12

Members are invited for concurrences .

12

Slide13

Introducing our Meeting Sponsors

myIDTravel

ID90T

IBS

Slide14

Financial Statement

14

ZMF AGM 2017 – Geneva

Slide15

Financial Statement

Slide16

Financial Statement

Slide17

A Tribute to Thierry

Slide18

Voting Papers

18

ZMF AGM 2017 – Geneva

Slide19

Voting Papers

ZED Lower baselineZED Super LowAGM Networking EventTax CollectionChargebacksTicket ValidityDefinition of NomineesYour ZMACAGM 2018

Slide20

Voting PaperZED Lower Baseline

Slide21

SituationCurrently (approved AGM16) fares are constructed using two baselines: Economy Space available LOW zone 1  Economy Positive space LOW zone 1 The evolution (increase or decrease) is calculated using the yearly figures provided by IATA:

 

 

ACTUALS

ACTUALS

 

2013

2014

2015

Passenger yield previous year N-1

 

-5,5%

-11,7%

Jet fuel

price

$/

bbl

124,5

114,8

66,7

Jet fuel price (IATA source- N-1 vs N-2)

 

-7,8%

-41,9%

Fuel % expenses (IATA sources)

 

32%

27,5%

Calculated % evolution

 

 

-23,2%

Slide22

As from such

c

alculated

% evolution

and using those two baselines, all

ZEDMIBA

Fares are calculated on a yearly adjustment process

Economy

/ Premium Economy/

Business

Space Available/Confirmed

 

At the AGM 2016, following was agreed:

“

The lowest adult fare for space available fare type in Economy may never fall below

15 USD

in order to maintain a minimum revenue for the operating carrier.”

Slide23

ZED Space Available – Economy Class Fares

Slide24

ZED Space Available –

Business

Class Fares

Slide25

ZED Space Available –

Premium Economy Class Fares

Slide26

Problem

 

Looking at the

IATA forecast values for 2016, we

can foresee to have

a decrease on ZEDMIBA fares for 2017.

 

However, because

in Nov 2016 we voted to have

Economy Space available LOW zone

1

to be the

lowest possible fare

of

15.00 USD

,

all related Space available fares constructed from that baseline will not decrease at all. They will be identical

to

what we have today.

Slide27

3 options

Do

nothing

and keep the

15USD

as the lowest fare possible for

Economy Space available LOW zone 1.

 

Set

the lowest adult fare for

Economy space

available fare

for Economy to

13USD

Set

no minimum fare

at all, like for positive space fares.

Discussion on Pros and Cons

 

 

 

 

Slide28

Voting PaperZED Super Low

Slide29

ZED and MIBA fares: where do we come from

29

2011-2012:

Workshops conducted to determine :

What is a fair value for ZED R2 fare? what would be the minimum ZEDR2 (ZL) fare which an operating carrier would agree to be acceptable to offset its operating costs?

No agreement reached

yet

within

the industry

What is a fair

value

for confirmed fare? ZMAC offered to outsource to a third party the assessment of market fare levels (research on all GDSs with similar fare conditions). This solution had a cost and was not retained by members.

ZEDR2 Medium was then retained as the industry standard (used by the majority of carriers): 2012 ZMR2 levels were used as a starting point and became the central reference on which ZL and ZH is being calculated

ZEDR1 and MIBAS1-C1 fares were “merged”: same reference whether it is leisure or duty. 2012

levels were used as a starting

point: R1 for Low, S1 for Medium and High levels

2016-2017:

Levels of fares are being questioned again by ZEDMIBA members.

If

the

yearly

fare

adjustment

drops

below

the

minimum

ECO

baseline

fare

,

there

is

no

movement

Slide30

Market prices Mileage zone 1: examples

Current ZED fares:

RT ZEDR2 Medium without taxes: 2*24

=

48 $, ZEDR2 Low: 2*15 = 30 $ RT ZEDR1 Medium without taxes: 2*62 = 124 $, ZEDR1 Low: 2*28 = 56 $Public fares within mileage zone 1: 2 weeks prior to departure (MAR’17)PAR-NCE/ Easy Jet: : Public fare: 86 $ RT fare, without airport taxes No refund, no changes, 1x luggage incl.TYO-OSA/ flyPeach: Public fare: 87 $ RT fare, without airport taxes No refund, no changes, 1x luggage incl.NYC-BOS/ Delta-Jet Blue- AA: Public fare: 108 $ RT fare, without airport taxes No refund, no changes, 1x luggage incl.

Lower than ZEDMIBA R1 on MM

Lower than ZEDMIBA R1 on MM

Lower

than

ZEDMIBA R1

with

MM

Slide31

Market prices Mileage zone 3: examples

Current ZED fares:

RT ZEDR2 Medium without taxes: 2*39

=

78 $, ZEDR2 Low: 2*29 = 58 $ RT ZEDR1 Medium without taxes: 2*118= 236 $, ZEDR1 Low: 2*53 = 106 $Public fares within mileage zone 3: 2 weeks prior to departure, non-stop flight (MAR ’17)FRA-IST/ Pegasus Airlines : Public fare: 55 $ RT fare, without taxes No refund, no changes, 1x luggage incl.SIN-DPS/ Tiger Air: Public fare: 126 $ RT fare, without taxes No refund, no changes, 1x luggage incl.GIG-BUE/ EMIRATES: Public fare: 239 $ RT fare, without taxes No refund, no changes, 2x luggage incl.

Lower than ZEDMIBA R2 with ML!!!

Close to ZEDMIBA R1 with MM

Lower

than

ZEDMIBA R1

with

MM

Slide32

Market prices Mileage zone 6: examples

32

Current ZED fares:

RT ZEDR2 Medium without taxes: 2* 79

=

158 $

, ZEDR2 Low: 2*59 = 118 $ RT ZEDR1 Medium without taxes: 2*248= 496 $, ZEDR1 Low: 2*163 = 326 $Public fares within mileage zone 6: 2 weeks prior to departure, non-stop flight (MAR ‘17)CGN-MIA/ Eurowings: Public fare: 400 $ RT fare, without airport taxesNo refund, no changes, 1x luggage incl.BKK-MEL/ Jet Stars: Public fare: 318 $ RT fare, without airport taxesNo refund, no changes, 1x luggage incl.MAD-SDQ/ Air Europa: Public fare: 647 $ RT fare, without airport taxesNo refund, possible changes, 1x luggage incl.

Lower than ZEDMIBA R1 with ML!!!

Lower

than

ZEDMIBA R1

with

MM

Slide33

What happened after our workshop in Sep 2016?

Isabelle from Air France gathered some information

Inhouse

pricing

scheme

from

SWISS in

October

Isabelle prepared an excel sheet with the actual ZED MIBA fare level compared with the SWISS inhouse fares

Isabelle, Ingo (LX) and Axel (LH) scheduled a conference call for end of November

We discussed the possibility of using the

L

X inhouse fares

We decided to evaluate the proposal and compare it with commercial fares from some airlines

Where

are

we

now

?

Working

group

meeting

in MIA

prepared

a

voting

paper

Keep

the

fares

simple &

continue

with

actual

fare

scheme

We

defined

a

feasible

ZED Super Low

fare

scheme

We

defined

the

possible

new

farebasis

code

e.g. YID

ZS

R2…

We

identified

all

necessary

changes

in

the

different ZEDMIBA

documents

Slide34

Proposal for the new fare levels (I)

Space

available

– Economy Class

Slide35

Proposal for the new fare levels (II)

Space

available

– Premium Economy Class

Slide36

Proposal for the new fare levels (III)

Space

available

– Business Class

Slide37

Proposal for the new fare levels (IV)

Positive Space – Economy Class

Slide38

Proposal for the new fare levels (V)

Positive Space – Premium Economy Class

Slide39

Proposal for the new fare levels (VI)

Positive Space – Business Class

Slide40

Considerations

 Worldwide standard option for airlines who wish to agree on a lower fare levelA new product within ZEDEasy typical ZED fare structureNo complex fare schemeIn connection with the actual fare schemeEasy to add to existing agreementsA valid option, if fare adjustment rule for ZED LOW does not go below 15USD (minimum level) May not be needed by all airlinesNew fare basis myIDTravel & other tools need an updateISTA & Concurrence form need an update. Cost to Infonia and possibly myIDTravelRevenue loss – fix costs covered?If baseline is removed there a risk of not meeting the transportation costATPCO must be filedFare adjustment mechanism must be updated

Slide41

Action and choices now!

Evaluate for the ZEDMIBA community if the Super Low Fare Level is necessary?

Are

there

any

open

questions

/

items

or

concerns

,

please

ask

now

?

Always

keep

in

mind

it

is

not a must

to

use

or

implement

,

it

is

only

another

possibility

to

choose

from

our

ZED

product

range

Please

vote

and

be

a

part

of

the

community

to

move

ideas

forward

Slide42

Voting PaperNetworking Event

Slide43

43

Situation

Members agree that a networking event an essential part of the AGM. Previous events have been sponsored, and if not, a vote was held to authorize the use of ZMF funds.

At the Boulder AGM 2016, Members suggested that we incorporate a clause into the ISTA, thus removing the

need to request authorization each time by vote.

However, the release of funds will always to be subject to a there being a minimum balance of USD 50,000 in the ZED MIBA Forum account.

Slide44

44

PROPOSAL

The proposal is to add the following clause to ISTA Financial section 10.:

A.10.h. The Advisory Council may access ZMF funds to organize a networking event held in conjunction with the Annual General Meeting, limited to

USD 15,000.00

per year and only if available (unspent) funds are not less than

USD 50,000.00

Slide45

45

VOTING question

Do you agree to add A 10.h to ISTA

a) Yes

b) No

As this is a financial issue, 67% majority is required for the vote to be approved.

Slide46

NEXT STEPS

If we reach the 67% majority, ZMAC will take action and add this clause to ISTA to secure the networking events at any future AGMs.

If we do not reach the 67% majority, no further

steps

will be taken and this issue will be closed.

MANY

THANKS FOR YOUR ATTENTION

Slide47

Voting PaperZPA vs. ZPU

Slide48

Special conditions may be bilaterally agreed between members, however it is common practice that the Travel Partner is to travel accompanied by the employee/retiree. It is clearly stated on the PTC definition beyond any doubt.Having such policy in place avoids the possibility of fraud – employees/retirees selling their ID tickets. 

ZPAAccompanied travel partner of employee/retiree - AdultZPCAccompanied Travel partner of employee/retiree- Child ZPUPartner Unaccompanied

Info

available

-

http://www.zedmiba.org/fares-filing-list-of-ptcs

Slide49

Also, on the ISTA agreement, if we accept Travel Partners we only have to insert the ZED Fare Level, there’s no mention for the ZPU – then we have to assume that by default all concurrences are to be treated as ZPA or ZPC - Accompanied travel partner of employee/retiree.

STANDBY YR2YS2CR2CS2DEADHEAD Crew Employee(ZM)(00)(ZM)(00)RetireeSpouseChild (age 0-2/Infant) Child (age 2-12/Child)Child (age 12- under 24) Child (age 24 and over) Parents Sibling Travel Partners

Info available - http://www.zedmiba.org/ista-appendix-concurrence-form

Eligible Persons (Agreement Section B.1) and Applicable Fare Levels (Appendix Fares)

Fare levels shown in chart are for example purposes only. Members may bilaterally agree to any zonal or discount fare level.

Slide50

Problem

 

 

Once the employee/retiree is validated on the NIET tool myidtravel,

it is

possible to book/issue

tickets for

ZPA

to travel alone - in spite of the agreement

having been

correctly uploaded with the PTC

ZPA (

Accompanied

)

instead of

ZPU (

Unaccompanied

)

.

The

validation

should

be

at the level of

myIDTravel

at

the time of the booking/issuance,

that is

why we

have

different

types

of PTC’s.

A provider currently offers an

add-on

at a cost to validate

ZPA

from traveling

Unaccompanied.

Paid add-ons

should not be offered for

standard matters,

but

only for matters requiring a customization. Here this is not the case.

Since

the majority of ZEDMIBA members

are NIET

carriers, and assuming that they have no intention to pay LSY an

add-on, the provider is required

to comply with a ZEDMIBA basic detailed on Appendix Passenger Type Codes (PTCs)

/ Ticket

Designators.

Slide51

 

Currently

“Travel Partner - any one person recognized as a travel partner by the employing airline. In the case of more than one travel partner being allowed, it should be bilaterally agreed.”

 

Proposal

“Travel

Partner - any one person recognized as a travel partner by the employing airline. In the case of more than one travel partner being allowed, it should be bilaterally agreed.

Travel Partner must be accompanied by the Employee/Retiree on all flights unless bilaterally agreed

.”

VotING

QUESTION

 

Do you agree on the proposal to change the definition?

 

Yes

No

Slide52

Voting PaperTax Collection

Slide53

53

Slide54

54

Slide55

55

Slide56

56

Slide57

57

Slide58

58

The rules

Slide59

Slide60

Voting paper proposal

Add

verbiage to ISTA section C.1.c. and C.2.c. clarifying that transit exempt taxes must be collected on ZED and MIBA tickets (except where an NIET agreement exists and the ticketing/transporting airline unilaterally choses to exempt them), regardless of whether an immediate connection or stopover is intended

.

 

Slide61

C.1.c.

Taxes/Fees/Charges

C.1.c.i Applicable

interlineable

taxes/fees/charges must be collected and shown on the ticket.  

This includes transit-exempt taxes, regardless of whether an immediate connection or stopover is intended.  

C.1.c.ii Any tax, fee, or charge imposed by an airline (i.e., charges that are not remitted to a third party government or airport authority, such as YQ, YR and Q charges) must not be collected and shown on the ticket, and must not be collected from the passenger by the Transporting Airline at the time of check-in, unless bilaterally agreed specifically for industry discount tickets.  

 

 

Slide62

C.2.c.

Taxes/Fees/Charges

C.2.c.i With the exception of an administrative or ticketing handing fee, any tax, fee, or charge imposed by an airline (i.e. charges that are not remitted to a third party government or airport authority) must not be collected from the passenger by the Transporting Airline, unless bilaterally agreed specifically for industry discount travel.  

C.2.c.ii The ticketing carrier may collect transit exempt taxes, regardless of whether an immediate connection or stopover is intended

.

 

 

Slide63

Voting PaperChargebacks

Slide64

What is a Chargeback?

After the booking / issuance / payment is made on the NIET provider (e.g.

myIDTravel

) and after the tickets are already used, the employee/retiree states to the bank (of the CC he/she has used to pay for the tickets) that he/she does not recognize such transaction.

The bank treats this as a Fraud and starts the Chargeback process, by the time the Transporting Carrier claims the amount of the ticket(s) in question, the bank does not allow the debit due to Chargeback.

 

The issue at this point has to be addressed between the Employing Carrier and the Transporting Carrier. The Employing Carrier is responsible for the HR database of their own staff and their eligible nominees. It is through them that they have ID tickets with OAL.

The Transporting Carrier has no information about these ID

paxs

besides the flight details, the CC used, PTC; first name/surname and employee ID number. No direct contact may be used, Transporting Carrier relies on the good will of the Employing Carrier.

Slide65

65

Transporting Airline is not able to collect the amount for the ID

tkts

which has transported already. Multiple scenarios may happen at this stage:

Employing Airline reaches their staff and he/she settles the amount to be paid with the Transporting Airline directly.

ALL

SOLVED!

 

Employing Airline reaches their staff and he/she refuses to settle the amount due. Employing Airline settles such with the Transporting Airline.

ALL

SOLVED!

 

Employing Airline reaches their staff and he/she refuses to settle the amount due. Employing Airline refuses to do such as well.

Transporting

Airline problem!

 

Employing Airline can’t reach their staff (because they already left the airline or have retired). Employing Airline settles such with the Transporting Airline.

ALL

SOLVED!

 

Employing Airline can’t reach their staff (because they already left the airline or have retired). Employing Airline refuses to do such as well.

Transporting

Airline problem

!

Slide66

66

“Authorizing Airline

– a Member airline through which industry discount travel benefits are derived.”

In order to avoid possible loss of revenue by the Transporting Airline, we should hold the Authorizing Airline ultimately responsible for the inadequate actions of their staff when using a NIET solution - as for the IET issuances since payment is made directly to the Employing Airline this issue never happens.

Slide67

Proposal

“… C.2

. TRANSPORTING AIRLINE TICKETING

C.2.g. Disputes and

Chargebacks

In the event of a dispute

arising in connection with tickets issued under this Agreement, it is the responsibility of the Authorizing Airline to ensure the Transporting Airline is compensated within six (6) months, or as bilaterally agreed, for transportation provided

.

”

Slide68

Voting PaperTicket Validity

Slide69

why

?

It is imperative that an employee who has left the employer providing travel benefit on OAL, doesn’t use the bilateral concurred travel privilege after end of employment.

It sends all the wrong signals, having someone on holiday on OAL ZED tickets,

theoretically

almost 3 months after termination of employment.

how?

As soon as

end-date

is known to employer, this

end-date

should be reflected in HR/ticket issuance system. It is the responsibility of the employing carrier to adhere to

this

or make effort s to recover outstanding unused tickets

Slide70

what’s required?additional wording to ISTA.C.2.d. Validity C.2.d.i The travel authorization or ticket validity shall be no more than three (3) months from the date of issue, unless bilaterally agreed.It is the responsibility of the employing carrier to ensure that any tickets held by employees that have been terminated, or who have resigned, are not valid after the last date of employment.

70

Slide71

Voting PaperDefinition of Nominees

Slide72

72

Definition of Parents

Do we want to

create a definition for “Parents” as we did for “Spouse” and “Travel Partner”

e.g.

Spouse

– any one person recognized as a spouse by the employing airline.

Slide73

73

Proposal

DEFINITION

Parents

– any person recognized as a parent by the employing airline

.

The

Employee/Retiree can have only two parents eligible for

travel at one time.

Slide74

74

Proposal

DEFINITION

Sibling of Employee / Retiree

– any person recognized as a sibling by the employing airline.

Slide75

Voting Paper ZMAC Election

Slide76

76

The ZMAC members below were elected last year and will remain until AGM 2018

Sylvia

Ibach (AB)

Teresa Miller (F9)

Peter Nielsen (SK)

Luanne Stetson

(

AS)

Slide77

Four positions are vacant for the coming yearMembers were invited to stand as a candidate

77

Slide78

78

Four members put themselves forward

Afonso

Crawford (

TP)

Karmen Jese (JP)

Ingo

Jeske

(LX)

Julie Williams (BA)

 

Slide79

So in the absence of any other candidates these four will take their places on the Council for two years. No requirement to vote.

79

Slide80

80

As a Council, we have voted between ourselves to select

our Chairperson.

This

will be:

Julie Williams (BA)

Slide81

81

Our future Council

There

are plenty of you out there who

would

make very good Council Members and we want to encourage you to consider standing in future.

A challenge for us is how to persuade you to join us.

 

Slide82

82

Qualifying Criteria:

Open minded

Bring new ideas

Basic ZED MIBA knowledge

Staff travel experience preferred

Committed to the cause

Team player

Airline/Supervisor support/approval

 

Slide83

83

Your commitment

as a Council Member:

AGM

2 x

Workshops

per year

1 x ZMAC meeting per year

The above does mean arriving/departing earlier/later

Monthly conference calls

 

Slide84

84

We are interested to find out what else might

hinder

applications.

Time or lack of it to dedicate to ZMF?

Fear of speaking at AGMs/Working Groups?

Unable to gain authorisation to travel to anything other than AGM?

Slide85

85

What ideas do you have that we can implement in order to encourage members to take this step and be instrumental in shaping the organisation’s future?

Slide86

Voting Paper AGM 2018

Slide87

- PROPOSAL FOR AGM 2018 -

Slide88

Why Croatia

?

Because it is:

ExcitingBeautifulRomanticCulturalRelaxing ... and yet so close … Between 1 and 3 hours flight from all major European gateways

Slide89

Map of Croatia

At the crossroads of cultures and civilizations, Croatia is a mixture of Mediterranean and Central Europe – reflected in diversified customs, rich national costumes, excellent cuisine and exquisite wines.

A “green” destination enabling visitors to experience the values rare in modern world – ecologically clean environment, green forests and crystal clean sea and fresh waters.

A safe corner of the world where one can enjoy an unspoiled destination and vintage hospitality!

Slide90

Why

Dubrovnik?

 

“If you want to see heaven on Earth, come to Dubrovnik!”George Bernard Shaw

Slide91

Introducing Dubrovnik

The over a thousand year old history of Dubrovnik is visible in every part of this city

, s

ince 1979 the town has been under UNSECO protection.“The Pearl of the Adriatic” has captivated and seduced kings and artists for centuries with its immaculate medieval architecture.One of the most attractive and best-known cities in the MediterraneanThe city is a living museum and a live stage, and has an ideal connection between its historical past and the modern day.

Slide92

Grand Villa Argentina

Hotel rate of €

130 for double room/single use and €150double room/double use, breakfast included

No up-front deposit requiredAll conference facilities and standard equipment includedCroatia Airlines will sponsor coffee breaks and one lunchComplimentary wireless internet in all guestrooms and conference facilitiesAgreed areas for vendorsSame price is guaranteed during entire week (15-22APR)

Slide93

Few more pics

Slide94

Hope to see you in Dubrovnik, 18/19APR2018!!!

Slide95

AGM 2018

Panama City

Slide96

Semantic Changes

96

ZMF AGM 2017 – Geneva

Slide97

Semantic Changes

Reference to SLA

Associates Membership

ID50S1 & IDZHR1, IDMHS1

Get input from Julie?

Slide98

Coffee Break

98

ZMF AGM 2017 – Geneva

Slide99

Vendors Sessions

99

ZMF AGM 2017 – Geneva

Slide100

myIDTravel

100

ZMF AGM 2017 – Geneva

Slide101

ID90T

101

ZMF AGM 2017 – Geneva

Slide102

IBS

102

ZMF AGM 2017 – Geneva

Slide103

ZMF and IATA

103

ZMF AGM 2017 – Geneva

Slide104

ZMF and IATA

ISTA Agreement

Slide105

“Complex Taxes” project

105

ZMF AGM 2017 – Geneva

Carlos Alanis, IATA

Manager Ticket Tax Box

Slide106

Milestones

MilestonesPlanned datesBusiness case approval31 December 2015Kick-off in GVA26 January 2016Recruitment project resources29 January 2016Workshop in GVA25-26 February 2016Validation of diagnostic and proposed actions31 March 2016Implementation new TTBS templates completedJune 2016Validation of report and plan for follow-up29 July 2016Report at World Financial Symposium30 September 2016Report to FinDev and agree on next steps16-17 November 2016Project final closure30 December 2016

Complex TFCs Project

Slide107

1Q2017

Handover

Continuation of actions by diverse subject matter expert players

Beyond the 75 cases

1Q16

2Q16

3Q16

4Q16

Project initiation and business case

Workshop and analysis of the 75TFCs

Draft new TTBS forms

Corrective Actions

Formalize conclusions and report to FINDEV

Follow-up on open actions and handover to operations

4Q2015

Identify system solutions

Diagnostic +Recommendations

Advocacy actions

Identification + Objectives

Report and Feedback

Conclusions and project closing

Identify workarounds

Update of TTBS content

Timeline

Phases

Deliverables

Implement new TTBS forms

Complex TFCs Project

Slide108

Project success criteria

Closure on the 75 TFCs open items signed off by the FinDev Delivery of improved TTBS templates signed off by the FinDevDetermination of benefitsSee the objectives being achievedIdentification, Simplification, Standardization, Advocacy, Framework and Quantification

Complex TFCs Project

Slide109

Benefit quantification

Extrapolation for the 75 Complex TFCs in scope based on data extracted from the ICH. Annualized amounts of potential savings based on extracted interline rejections:Analysis ADMs related to TFCs 25.000 ADMs, total $1.35M value estimated per yearMain reasons: incorrect calculations, taxes not collected, taxes under wrong tax code

Complex TFCs Project

Slide110

Issues/solutions categorization

Complex TFCs Project

Slide111

Process Improvement

Slide112

Process improvement

New TTBS forms created and implemented, now operationalNew Tax Fee or ChargeAmendment to existing Tax Fee or ChargeAddress root causes of uncertainties and errors in the codingIntelligence incorporated into the forms to Guide the users through clear definitions of concepts such as exemptionsProvide pre-set drop-down lists to avoid incorrect data or format being capturedAssociated implementation guide and webinar training for filing carriers deliveredPost go-live improvements already delivered as part of the continuous improvement process

Complex TFCs Project

Slide113

Advocacy related cases

Slide114

TFC Advocacy actions results

Authorities have changed the provision of the law:Côte d’Ivoire (TFC: HZ)Cook Islands (TFC: QE)Egypt (TFC: EG)Singapore (TFC: OP)South Sudan (TFC: SS)Norway (TFC: NO) is in the hands of the national carrier and currently undergoing their own advocacy work. IATA will assist if/when necessary.USA (TFC: AY and XF) and Canada (TFC: CA) originally assessed as requiring advocacy, shifted solution to status quo after careful analysis of the case.Ireland (TFC: IE) originally assessed as requiring advocacy, shifted to technical solution following the discussion with the FinDev sponsors (workaround solution deemed more suitable).IATA taxation group will continue to work on the open issues as part of their operational duties (HF Ukraine, YB Algeria, BD Bangladesh and AM Armenia).

Complex TFCs Project

Slide115

Technical related cases

Slide116

Technical solution identification

Methodology: IATA has analyzed the Fare life cycle to identify where the data elements are missing

Complex TFCs Project

Most of the data elements do not exist at ET Record level

Therefore, the SOLUTION: Technical solution to introduce the data elements at ET Record level

Slide117

Technical diagnosis summary

Percentage taxesIdentification of the correct fare for applicability of fare and surchargesMissing coupon and ticket dataDate of birthArrival/departure timesCabin classTax definition not clearDefine next possible connectionDefine infants (with or without seats)ExemptionsAlign to industry standards (e.g. infants under 5, children under 15)Separate ticketsMap correct tax applications to separate tickets

Complex TFCs Project

Slide118

37 Technical cases

Complex TFCs Project

Date of birth = 7 cases

Antigua, Barbados, UK (2), Greece, Mauritius and Venezuela

Complex Seasonality = 1 case

Ireland

Cabin Class = 1 case

Pakistan

Eligible passenger exemption = 2 cases

Turkmenistan

Nationality or citizenship/residency = 15 cases

Anguilla, Belize (3), Colombia (2), Maldives (2), Mexico, Nepal, Panama (2), Philippines, Seychelles and Argentina

Tax on final destination = 2 cases

India and Congo

Terminal information = 8 cases

Bulgaria (2), Hungary (2), Israel, Russian Fed., Serbia and Singapore

Unticketed points = 1 case

Singapore

Slide119

Technical solution next steps

Standards - EnhancementAdd new data elements into the sales reporting capabilitiesStandards - ImplementationPricing to Ticketing Host/GDSTicketing Systems Host/GDSGDS Implementation of Sales Reporting StandardsRevenue Accounting SystemsProject closure 12-2016 and handoverIATA Airline Distribution and Standards: follow-up on BDISG adopting the standards set for the data elements.follow-up on where the new data elements should be added in the DISH, and on the implementation of the new release.

Complex TFCs Project

Slide120

75 Complex TFCs project handover

Complex TFCs Project

To be updated (underway)

ROOT CAUSESOLUTIONENGAGEMENT4Q154Q164Q174Q184Q19Missing data elementsAddition to DISHBDISG/PSC 2017 adoption of DISH 23 2018 and 2019373737370Unclear/complicated regulationAdvocacyLocal airline/IATA/government reps105 400Percentage tax calculation not clearStandard calculation approach agreedLocal airline/IATA/government reps/FINDEV sponsors70000Ambiguity with actionAnalysis and clarification bulletin as applicableLocal airline/IATA/government reps/FINDEV sponsors85000Ambiguity no action determinedNo action, status quo. Determined current process workingLocal airline/IATA/government reps/FINDEV sponsors/ATPCO137000755341370

forecast

Slide121

Implemented a virtuous cycle with all players

AchievementsAdvocacy processes embedded in TTBS procedures.Better filing discipline and intelligent forms with clear guidelinesCategorized exemptions based on what pricing is capable of Clarifications on tax applicability removing ambiguities wherever possibleSystem implementation requiredNeed to increase the quality of the data in the workflowFocus on automation wherever possible.

Complex TFCs Project

Conclusions

Slide122

Thank you!

Slide123

Break for Lunch

123

ZMF AGM 2017 – Geneva

Slide124

Break-out session 1

124

ZMF AGM 2017 – Geneva

Slide125

Break-out session 1

Fares and Taxes (ZED Super low) Room GenevaChargebacks & Ticket Validity Room BâleISTA Familiarization Room Lausanne

Slide126

Break-out session 2

Fares and Taxes (ZED Super low) Room GenevaChargebacks & Ticket Validity Room BâleISTA Familiarization Room Lausanne

Slide127

Break-out session 3

Fares and Taxes (ZED Super low) Room GenevaChargebacks & Ticket Validity Room BâleISTA Familiarization Room Lausanne

Slide128

Summary of Break-out sessions

&

Voting Papers discussion

Slide129

Announce for Dinner

129

ZMF AGM 2017 – Geneva

Slide130

Time for 1:1 ‘s

Slide131

ZMF AGM 2017

29 & 30 March 2017Geneva, Switzerland

Welcome back

Slide132

Summary and key points of Day 1

132

ZMF AGM 2017 – Geneva

Slide133

“NDC” project

133

ZMF AGM 2017 – Geneva

Cécile Rousseau, IATA

Manager Channel Distribution

Slide134

See separate presentation file

Slide135

“ONE order” project

135

ZMF AGM 2017 – Geneva

Ionut

Badea

, IATA

Manager ONE Order

Engagement and Strategy

Slide136

See separate presentation file

Slide137

“Cost of Payment” project

137

ZMF AGM 2017 – Geneva

Pascal Burg, Edgar Dunn & Co

Member of the project team

Slide138

Cost of Payments



Industry Transformation

March 2017

Slide139

Due to technology evolution, new payment methods (such as eWallets, VANs) are quickly emerging, some supported by GDSs. These new payment methods are usually coming with higher costs per transaction.

As

of today, airlines are not able to identify, discriminate or decide on payment methods acceptance, even though airlines are by default absorbing their

cost.

IATA

is planning new industry-wide initiatives involving Airlines, Travel Agents and GDSs, whose objective is to provide each airline with

transparency

, detection and

consent

regarding payment methods acceptance.

Slide140

1. Direct Sales

BSP Card

BSP “Cash”

2. Indirect Sales: pass-through card sales

Customer’s card:

pass-through

Customer’s card:

payment

Bank transfer from the

agent’s bank account to

the airline’s bank account

$$$

Moneys heldin trust

Bank transfer or any otherform of paymentused by the customer

3. Indirect Sales

BSP original design

Slide141

1. Direct Sales

BSP Card

BSP “Cash”

2. Indirect Sales: pass-through card sales

Customer’s card:

pass-through

Customer’s card:

payment

Bank transfer from the

agent’s bank account to

the airline’s bank account

$$$

Moneys heldin trust

Bank transfer or any otherform of paymentused by the customer

3. Indirect Sales

BSP

evolution

Agent’s

card or VAN

BSP Card remittances

Slide142

Sources: CC: Phocus Wright March 25th,2013 + BSP and ARC sale figures. Van: VAN provider, public information. eWallet: Global eWallet provider public information *calculated on an average $400 ticket with TA monthly sale of above 100K.. BSP Cash: IATA internal information. IATA EasyPay: RFP average outcome in process

Current Market Situation – Average fee per transaction benchmark

Customer

Payment

Agent

Remittance

Airlines consent effective

Slide143

Sources: CC: Phocus Wright March 25th,2013 + BSP and ARC sale figures. Van: VAN provider, public information. eWallet: Global eWallet provider public information *calculated on an average $400 ticket with TA monthly sale of above 100K.. BSP Cash: IATA internal information. IATA EasyPay: RFP average outcome in process

Current Market Situation – Average fee per transaction benchmark

Cash flow speed

2-3 days

2

-30 days

2-30 days

18.9 days

2-30 days

“Credit risk”

-

-

-

0.025%

unknown

Agent “payment” recourse risk

-

yes

-

-

yes

Value proposition to Airlines

Slide144

1. Direct Sales

BSP Card

BSP “Cash”

2. Indirect Sales: Pass-through card sales

$$$

Funds held

in trust

3. Indirect Sales

Agent’s or Wholesale card

Preliminary scenario analysis – Current merchant fees costs for the airline industry

33%

66%

Indirect sales

card merchant fees (ARC)

$1.8

bn

Total current industry costs of card merchant fees

$6.5

bn

Direct sales

card merchant fees

$2.9

bn

$1.8

bn

Indirect sales

BSP card merchant fees

Slide145

Thank you!

Slide146

What is SIS again?

146

ZMF AGM 2017 – Geneva

Momchil

Momchilov

, Manager Invoicing & Collection

Adrian Dulaj, Manager Invoicing and Metrics

Slide147

Simplified Invoicing and Settlement

Introduction and highlights

Slide148

What is SIS?

SIS is the industry platform that facilitates the electronic invoicing and settlement process by streamlining key processes, unifying invoicing standards, and reducing paper wastes, ultimately fostering a simpler and more efficient environment for airlines and aviation business partners –such as ground handlers, maintenance companies, and manufacturers – to engage in business.

Key FeaturesOne e-invoicing standardOptional automatic settlement in ICH/ACHBilling/billed data automatically available for reconciliationDigital Signature and legal compliance servicesAvailability of audi​t trail for record-keeping

SIS – Introduction and Highlights

148

Slide149

Who is using SIS?

In 2016 SIS had over 600 airlines and suppliers sending and receiving invoices. In addition to these paying customers, more than 1,400 companies have registered to receive invoices through SIS from IATA or other business partners.Including the IATA offices and E&F Airports, SIS had a total of 2,144 participants at the end of 2016.

In Billing Year 2016 SIS processed 1,500,936 invoices (interline and suppliers) valued at approx. USD 66 Billion. 83% of invoices were submitted by airlines and 17% by suppliers (including IATA). 90% of all invoices are settled though the Clearing House (ICH and ACH).

SIS – Introduction and Highlights

149

Slide150

SIS – How to download your ZMIBA invoice? (Presenting…)

SIS – Introduction and Highlights

150

Slide151

Coffee Break

151

ZMF AGM 2017 – Geneva

Slide152

Break-out session 2

Survey / Newsletter Room GenevaWebsite Room Bâle1:1 Room Lausanne

Slide153

Voting Begins

153

ZMF AGM 2017 – Geneva

Slide154

Break-out session 1

Survey / Newsletter Room GenevaWebsite Room Bâle1:1 Room Lausanne

Slide155

Break-out session 1

Survey / Newsletter Room GenevaWebsite Room Bâle1:1 Room Lausanne

Slide156

Break for lunch

156

ZMF AGM 2017 – Geneva

Slide157

Membership FeesandProposed budget 2017-2018

157

ZMF AGM 2017 – Geneva

Slide158

AOB

158

ZMF AGM 2017 – Geneva

Slide159

Next Meetings

159

ZMF AGM 2017 – Geneva

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