Simplified Interline Settlement

Airline Preparedness Survey –Wave 2

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Overview – Kale Consultants

25 years of experience in technology & outsourcing

Exclusive focused on Airline vertical

Offer best-in-class products and services across:

• Financial Management, Revenue Accounting, Revenue Recovery & Audit and Decision Support Systems

(DSS) Commercial

IATA Strategic Partnership – 10 years

Trusted by the airline industry bodies:

• Simplified Interline Settlement

• Neutral Fare Proration | (Kale’s APEX® in association with ATPCO)

• Zero Octa preferred supplier for Star Alliance for Revenue Recovery & Audit services

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Overview – Kale Consultants

Over 80 airline customers

• 15 of the top 20 airlines are our customers

Scale

• 250+ mn RA transactions processed thru REVERA®

• 100+ mn proration transactions thru APEX®

• $70+ mn in revenues recovered annually

1400+ techno-functional professionals

Global footprint – US, UK, India and New Zealand

Now part of the Accelya Group

Combined

• Over 200 airline customers

• Revenues $100+ mn

• 170+ mn tickets processed for IATA

BSP

• $180mn in revenue recovery

• 2100+ professionals

• Global footprint -

US, Mexico, South Africa, Tunisia

UK, France, Portugal, Hungary, India

and New Zealand

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Survey

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Objective and Methodology

Data Collection + Data Analysis

Distributed questionnaire to Airline Revenue

Accounting Heads and other high-level

executives.

Web based questionnaire

(survey window open for 4 - 6

weeks

MethodologyObjective

Survey Result

To monitor industry readiness for IATA’s Simplified Interline Settlement (SIS)

↗ Priority level for IATA’s SIS Project

↗ Clarity on required changes

↗ Approaches to become SIS Compliant

↗ Current status on readiness

↗ Estimated timelines and budget

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Overview

↗ 3 Wave approach

↗ Wave 1 conducted in June 2010 and Wave 2 conducted in Jan 2011

↗ Wave 3 to be done in June 2011

↗ Participation

WAVE- 1, JUNE 2010

•Airline: 56

•Respondents: 71

WAVE – 2, JANUARY 2011

•Airline: 66

•Respondents: 82

WAVE – 3, JULY 2011

•Proposed

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Airline Participant Detail – Wave 2

Annual Pax Count

Tier 1 Above 15 Million

Tier 2 Between 3 - 15 Million

Tier 3 Below 3 Million

Manager Level72%

Director Level28%

Respondents Profile

Tier 125%

Tier 227%

Tier 348%

Tier Wise

Africa + Middle East

, 8

Asia, 22

Europe, 20

North America, 9

South America, 7

Airline Participation

Full Service 86%

Low Cost 9%

Cargo Airline

5%

Airline Type

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Level of priority to become SIS compliance

Base: Those respondents answering – unweighted

Wave 1

Wave 2

17%

9%

48%

53%

35%

38%

Low priority High priority Very high priority

↗ 91% of the respondents consider SIS compliance as high to very high priority

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Understanding Change required for SIS

Wave 1

Wave 2

Wave 1

Wave 2

Wave 1

Wave 2

Mis

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r

16%

17%

27%

26%

33%

43%

49%

58%

43%

49%

59%

49%

35%

25%

30%

26%

8%

8%

Clear Somewhat Clear Not Clear

Base: Those respondents answering – unweighted

↗ Passenger

↗ Better clarity of impact of SIS for Passenger

↗ Over 50% still not clear

↗ Cargo & Miscellaneous

↗ Requires clarity and training

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Training requirements and dependencies

No5%

Not sure6%

To some extent

25%Yes64%

Training Need

IATA + RA Vendor

26%

Only IATA36%

RA Vendor38%

Depend for Training / Hand holding

Depend for Training

Base: Those respondents answering – unweighted

↗ There is a high need for training and hand-holding felt by airlines

↗ Airline respondents who have vendor provided RA system depend on the

vendor for training

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Airline Status In term of readiness for SIS

Base: Those respondents answering – unweighted

↗ Over 50% of airlines are beyond Initiation and budget finalization stage of SIS readiness

↗ MEA region based airlines are ahead of others in readiness

Overall Status

Middle East + Africa

Asia

Europe

North America

South America

46%

38%

57%

29%

43%

63%

36%

38%

32%

43%

43%

25%

7%

4%

14%

13%

11%

25%

7%

14%

14%

Initiation & budget finalization Planning & SIS compliance approach finalization Execution of the plan System & process testing

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Approach to become SIS Compliant - Preferred Approach

23%

53%

5%

3% 16%

Develop in-house solution Expect solution current RA vendor to provide

Outsource interline billing to 3rd party vendor Purchase an off-the-shelf SIS compliant interline module

Replace current RA system with a SIS compliant RA system

Base: Those respondents answering – unweighted

↗ 53 % of the respondents across airline industry have shown dependency on RA vendor for

Implementing Technology Change

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Approach to become SIS Compliant - Preferred Approach

Overall

Middle East + Africa

Asia

Europe

North America

South America

23%

33%

9%

44%

25%

53%

86%

47%

57%

44%

50%

5%

7%

25%

3%

7%

16%

14%

7%

35%

11%

Develop an in-house solution Expect current RA system vendor to provide solution

Outsource interline billing to 3rd party vendor Purchase an off-the-shelf SIS compliant interline module

Replace current RA system with a SIS compliant RA system

↗ More than 50 % of respondents across region have shown dependence on RA system vendor

to provide solution for SIS compliance

Base: Those respondents answering – unweighted© 2

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Estimated time to be compliant and budget

3% 16%

37%

33%

11%

Expect system ready

Less than 3 months 3 to 6 months

6 to 9 months 9 to 12 months

More than 12 months

23%

4%

10%

4%

60%

Amount budgeted

Less than $50,000 $50,000 - $100,000

$100,000 - $250,000 $500,000 +

Can't say / Don't know

Amount Budgeted

Base: Those respondents answering – unweighted

↗ 81% airlines is expecting to take more than 6 months (Sept 2011) to be SIS compliant

↗ Majority of the surveyed airlines could not disclose the budgets allocated for SIS

compliance

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Expected time period comparison – Wave 1 & Wave 2

3%

16%

37%33%

11%8%

15%

32%

47%

Less than 3 months 3 to 6 months 6 to 9 months 9 to 12 months More than 12 months

Wave 2 Wave 1

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Summary

91% considered SIS compliance as a high priority

Over 50% respondents are still not clear about the required system changes

Over 60% respondents feel the need for training and hand-holding

Over 50% respondents are beyond initiation and budgeting phase

53% respondents show dependency on the RA vendor for implementing technology change

19% of airlines are confident of getting their systems SIS compliant before September 2011

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Thank You.

For more information on the surveywrite to us at research@kaleconsultants.com

Looking forward to your participation in the Wave 3 survey

Confidentiality Statement:

The material contained in this presentation is proprietary information of Kale Consultants Ltd. To avoid misunderstanding or misuse, we respectfully request that you do not show, distribute, or allow use of this document without a written consent from Kale Consultants Ltd. marketing team. Kale Consultants adheres to a strict code of ethics. We honor confidentiality requests and ask others to do so as well.

Copyright 2011 Kale consultants Ltd. (All rights reserved)Kale Consultants is the trademark or registered trademark of Kale Consultants in US and in several other countries all over the world.

www.kaleconsultants.com

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