confidential | ©2018 sabre glbl inc. all rights reserved. · a. dpe with dynamic fare adjustment...
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confidential | ©2018 Sabre GLBL Inc. All rights reserved. 1
confidential | ©2018 Sabre GLBL Inc. All rights reserved. 2
Melanie Dezelak
Principal
26 July 2018
GLOBAL TAX DATA MANAGEMENT
ATPCO in the Tax Lifecycle
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Evolution of the Industry Tax Solution
Centralized source for automated tax data
GDS/Pricing System Adoption
Agile Processing Solutions
Filing Tax Data with ATPCO
Agenda
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Evolution of the Industry Tax Solution
2006 ATPCO Tax Workgroup to explore industry centralized solution
2010 Launch of Industry Solution for Ancillary & Ticket Tax Automation
-DXC/HP implementation
2013Amadeus initiates adoption plan for ATPCO Tax solution
2015 Sabre implements ATPCO solution for ancillary taxation
2016Travelport implements ATPCO ancillary taxation solution
2018 Sabre & SITA implement ATPCO ticket tax solution
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Evolution of the Industry Tax Solution
More than 60 carriers file ancillary tax data with ATPCO, and the number grows each year• Includes taxation on baggage charges, seat fees, and other ancillary revenue products and
services
IATA transitioned the publication of carrier specified amounts (CSA) for airport departure and arrival taxes to ATPCO in January 2015
• Benefit: Data available in the Revenue Accounting Tax Database (RATD Viewer)
“One stop shop” for the filing of carrier tax exceptions and distribution to GDS, OTAs, and pricing systems
• Benefit: Comprehensive tax data for interline settlement purposes
• IATA-TTBS and ATPCO partnership to align tax interpretation across industry distribution channels through the single automated source solution
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ATPCO: Single Source of Automated Tax Data
One Place for all your tax data filing needs IATA-TTBS
ANCILLARY & FEE TAXATION CARRIER TAX EXCEPTIONS
CARRIER SPECIFIED AMOUNTS- CSA(Reported to IATA & Automated by ATPCO)
AIRLINE-TERMINAL NOTIFICATION PROCESSFOR
AIRPORT DEPARTURE/ARRIVAL TAXES
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ATPCO Tax Data Alignment Processes
One PlaceOne
InterpretationOne Input
Standard
Tax Output
Across
Pricing Systems
Russian Terminal User Charge Notification (RI tax) for ALL carriers operating to/from Moscow
Indian State Registry Notification (K3 tax) for ALL carriers selling India originating travel itineraries
Terminal Tax Notification for ALL airports where departure/arrival/transfer/transit tax rates vary by terminal
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Global Adoption of the ATPCO Tax Solution
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New Processes to Comply with Tax Legislation
Agile Tax Processing Solutions
Industry aligned turnaround logic for global tax processing
US Tax processing based on TTBS stopover logic versus the traditional fare construction logic
Proration of domestic portion of international travel
Faster Time-to-Market for quickly changing tax legislation requiring new automated capabilities
• 2017-2018: New Indian GST regime (B2B processing in discussion with GDS and pricing systems)
• 2019: Newly announced Japanese departure tax
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Carrier “To Do” List
Filing Tax Data with ATPCO
Carrier Exceptions• Based on fare related data, such as ticket designators, fare basis codes (e.g. Staff Tickets, ID
fares)
Carrier Specified Amount (CSA)• First report to IATA, then IATA confirms and reports to ATPCO to issue CSA Notification
Ancillary Tax Data• Including VAT/GST on baggage, seat, meal and other EMDs
Application of VAT/GST for sale on your validating carrier• Notify ATPCO if applies on “fare only” – or – “fare + YQ/YR”
DUAL RBD VALIDATION
ATPCO Dynamic Pricing Working Group
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Dynamic Pricing Working Group: Background and Focus
PODS* Research Paper: Pricing Mechanisms
Working Group Focus
Dual RBD Validation
Agenda
* Passenger Origin-Destination Simulator (PODS) Research Consortium at MIT
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Established 2016
Dynamic Pricing Working Group: Background
PODS* Research Paper
• Advances in Airline Pricing, Revenue Management, and Distribution
Initial Focus: Optimize price points an airline offers along a demand curve
• Dynamic Price Adjustment
• Assortment Optimization (including Dual RBD Validation)
* Passenger Origin-Destination Simulator (PODS) Research Consortium at MIT
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ADVANCES IN AIRLINE PRICING, REVENUE MANAGEMENT, AND DISTRIBUTION
Evolution of airline pricing, revenue management, and distribution
Price selection mechanisms
• Assortment Optimization
• Dynamic Price Adjustment
• Continuous Pricing
Next generation mechanisms
• More frequent updating of fare structures
• Dynamic availability of fare
• Additional RBD capabilities
• Dynamic price adjustments (increments or discounts)
• Continuous pricing
• Dynamic offer generation
PODS Research
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Common Definitional Framework
Pricing Mechanisms
Assortment Optimization
ContinuousPricing
Dynamic Price Adjustment
More frequent updating of fare structures
Dynamic availability of fare products
Additional RBD capabilities
Continuous Pricing
Dynamic Offer Generation
Dynamic Pricing Engine (DPE)
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Optimize Price Points Along a Demand Curve
Dynamic Pricing Working Group: Focus
Dynamic Price Adjustment - Pilots
A. DPE with Dynamic Fare Adjustment (Sabre, Farelogix, ATPCO)
B. DPE with FBR Trigger (PROS and ATPCO)
Refer to ATPCO Dynamic Pricing Working Group at www.atpco.net for further information
Assortment Optimization
Additional RBD Capabilities: Dual RBD Validation
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Dual RBD Validation
DUAL VALIDATION EXISTS TODAY
Instant upgrade fares
Limited use within cabin for fare brands
INCREASING AVAILABLE PRICEPOINTS WITHIN CURRENT FRAMEWORKS
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• Airlines manage fares by reserving a subset of the 26 RBDs for secondary discount RBD validation
• For a fare to price, availability would be required in two booking classes: Class where booking is made (primary) and the secondary availability. Both must be available.
• Allows airline to utilize assortment optimization by first closing the discount secondary RBD(s) while leaving the main RBD open. Then moving to the next main RBD with secondary RBD open, then closing these discount secondary RBDs and so forth.
• Managing this in a one-cabin process theoretically allows for as many as 182 RBD combinations of primary and secondary RBDs. This allow for 156 more assortment options than what exists today in the 26 RBD constraint.
• The number of possible permutations varies based on the number of cabins and prime versus discount RBDs an airline allocates.
• If airline has more than one cabin and does not manage a seamless inventory across cabins the carrier would decide how to divide the 26 RBDs across cabins. The more cabins a carrier has, the fewer the total number of fare levels available
Solution Overview
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Dual RBD Validation: Defining the Fare Levels
7 RBDs Available
A, B, C, D, X, Y, Z
Divide into Primary and secondary
Primary: A, B, C, D
Secondary: X, Y, Z
Resulting in 16 fare levels
A, AX, AY, AZ
B, BX, BY, BZ
C, CX, CY, CZ
D, DX, DY, DZ
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Dual RBD Validation: Defining the Fare Levels
FARE CLASS PRIMARY RBD DISCOUNT RBD OR RBD PRICE POINTAONE A $500 ATWO A X B $490 ATHREE A Y B $480 AFOUR A Z B $470 BONE B $460 BTWO B X C $450 BTHREE B Y C $440 BFOUR B Z C $430 CONE C $420 CTWO C X D $410 CTHREE C Y D $400 CFOUR C Z D $390 DONE D $380 DTWO D X E $370 DTHREE D Y E $360 DFOUR D Z E $350
Example: Z is closed, A and B are Available
• A, AX, AY, AZ are open (AZ will be open by virtue of the fact a lower “OR” RBD, B, is open)
• B, BX, BY are open
• All C of C and D are closed.
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Dual RBD Validation: Inventory and Availability
FARE CLASS PRIMARY RBD DISCOUNT RBD OR RBD PRICE POINTAONE A $500 ATWO A X B $490 ATHREE A Y B $480 AFOUR A Z B $470 BONE B $460 BTWO B X C $450 BTHREE B Y C $440 BFOUR B Z C $430 CONE C $420 CTWO C X D $410 CTHREE C Y D $400 CFOUR C Z D $390 DONE D $380 DTWO D X E $370 DTHREE D Y E $360 DFOUR D Z E $350
Example: Airline wants to set the rate at $400.
• System makes available seats for RBDs A, B, C as well as X and Y, to ensure discounted C fare classes are available.
• Airline needs an availability response from XXX to YYY where we want to sell two more seats at the CTHREE, four at the
CTWO and six at the CONE levels, as follows: XX 123 A9 B9 C6 D0 X4 Y2 Z0 XXXYYY 312P 743P
NOTE: AFOUR and BFOUR are available since A and B are available, and B and C are available. Z does not need to
available since a lower prime RBD is available.
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Implementation Guide
Fare Management and Decision Support
Content Creation, Collection and Distribution
Pricing and Distribution (Direct and Indirect)
Revenue Accounting and Audit
Support Services (Contact Centers/Airports)
Implementation Launch and AssessStrategy and Planning
Under final review
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Assumptions and Pre-Conditions
• Shopping/Pricing/Order Management systems capable of Dual RBD validation
• Inventory management systems support additional price points and can determine RBD availability based upon the proposed structures
• A hierarchical fare structure is implemented and Dual RBD validation provides the opportunity to create intermediate fare levels within an RBD
Identification of Stakeholders
• Lifecycle processes
Impact Analysis and Scope
• Codeshare and interline, markets, cabin, fare type, etc.
Strategy and Planning
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Sample Use Case Layer 1
Carrier uses five Primary RBDs (M, H, Q, K, V) and one Secondary RBD (X)Results in 10 fare levels using these 6 RBDs
Fare
Class Primary RBD Secondary RBDMFULL M
MLOW M X
HFULL H
HLOW H X
QFULL Q
QLOW Q X
KFULL K
KLOW K X
VFULL V
VLOW V X
A Fare Class would be available if the Primary RBD is available as well as the Secondary RBD ,where specified.
Example: QLOW would be available only if Q and X were both available
Strategy and Planning
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Sample Use Case Layer 2
A Primary RBD higher than the lowest available Primary RBD is booked (for example, to gain features that are only allowed with a higher RBD). The RBDs should be considered hierarchal and the data can be created to support the lower level fare of the higher RBD.
Example: M, H, Q, K are all availableV and X are not available
A segment booked in Q would price QLOW (even though X is zero) because K was available
Fare Class Primary RBD Secondary RBDMFULL M
MLOW M X or H
HFULL H
HLOW H X or Q
QFULL Q
QLOW Q X or K
KFULL K
KLOW K X or V
VFULL V
VLOW V X
Strategy and Planning
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Sample Use Case Layer 2 (cont.)
Bid price is $600. Return M, H, Q, K as available and have V and X closed.
If KFULL is not selected, QLOW could be considered because Q was available and K is available as well
Fare
Class Fare
Primary
RBD
Secondary
RBD ResultMFULL $900 M Books in M
MLOW $850 M X or H Books in M when X or H are available
HFULL $800 H Books in H
HLOW $750 H X or Q Books in H when X or Q are available
QFULL $700 Q Books in Q
QLOW $650 Q X or K Books in Q when X or K are available
KFULL $600 K Books in K
KLOW $550 K X or V Books in K when X or V is available
VFULL $500 V Books in V
VLOW $450 V X Books in V when X is available
Strategy and Planning
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Implementation
Schedules No changes
Inventory Set-up and Management
Primary and secondary RBDs as inventory is decremented
Inventory Allocation and Forecasting
• Determination how inventory is to be allocated between Secondary RBDs• Forecasting impact of multiple price points and how to allocate inventory to the
secondary RBD
Availability Messaging No changes
Inventory Systems Identify inventory system modifications required to manage the opening and closing of primary and secondary RBDs to communicate the value that will be received with the sale of the segment/segments requested.
Revenue Accounting and Audit
Uses booked RBD as well as the fare basis code on each coupon to drive their respective processes. No changes are anticipated to these processes as they correctly process today with existing dual validation
Voluntary Changes Systems must be able to determine primary booked RBD but also any secondary RBD that would have been available based on the RBD requirements of the fare being processed
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RBD Chart 1 Restriction Tags
Fares and RulesImplementation
B If RBD1 is Available then
RBD2 is Permitted
D If RBD1 is Available then
RBD2 Required
N No RBD Applies
Fare by Rule (Category 25) Target = Nov 2018
Example: QLOW FareValue B: Secondary validation of availability of K allowing booking into QValue D: Secondary validation of availability of X requiring booking into QValue N: If neither X nor K is available “N” specifies the fare will fail validation
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Last Seat AvailabilityImplementation
Itinerary pricing after sell prices higher than expected
Itinerary pricing after the sell prices lower than the airline intended
Scenario A Scenario B
Example Example
Coordinate with system providers to ensure that shopping and pricing requests are aligned. Potential impact on the booking process (Direct and Indirect) that will need to be addressed
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Launch and Assess
Documentation and Training
Implementation and roll-out
(staged)
Communication (impacted channels)
Assessment
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Airline Implementation
One in production
One in test
Many in research
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Dynamic Pricing Working Group
• White paper on Dual RBD validation
• Implementation Guide (pending)
• Agendas
• Summary reports
www.atpco.net
Resources
VOLUNTARY CHANGES AND REFUNDS
Categories 31 and 33
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Agenda
Voluntary Changes and Refunds Working Group
• Summary report of April 2018 agenda items
• Roadmap
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Category 31 and Category 33
Voluntary Changes and Refunds Working Group
These categories automate change and refund processing based on airline business requirements
Evolving industry needs result in multiple new requests from Airlines and Systems for enhancements or processing clarifications
April 2018 meeting: Discuss new requirements and potential solutions
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Requirement Update
No Show: Establish a charge/penalty for no show. • Proposal to add a new Table (in both categories)
to house the charges/penalties as well as “No
Show” charges and higher/lower/both
• New match element in both categories to dictate
table applies to no show situations
• Agreed on No Show definition
• Present solution at future webinar or meeting
Cancel Penalty: New methods of determining a
cancellation penalty when the ticket contains multiple
fare components (e.g. combination of 100%-
nonrefundable and refundable)
• New element and values discussed e.g. process
all as per fare component vs. apply the highest
penalty, etc.
• Carrier intent unclear, ATPCO to contact requestor
First Coupon: Add functionality to indicate changes
are required to the first coupon (supports 017f for
unused tickets with a change to the first flight coupon,
current fares must be used)
• Add new value to Reissue Table 988 First
Coupon/Fare component (byte 24)
• Pending Milestone 2/3 issuance
Working Group Summary
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Requirement Update
RBD Hierarchy: Revise Category 33 data application
to add current logic contained in Category 31 for RBD
revalidation. This includes logic for building a dynamic
hierarchy, processing the hierarchy, and using RBD
Answer Tables for RBD validation
• ATPCO to create examples for review
• Discuss intent of current data (byte 93) for same or
equal/higher RBD.
• Pending discussion at the next working group
Public/Private Reprice Fare: Align category options
for restricting/permitting the use of private or public
fares when repricing the itinerary. Category 31 Exclude Public/Private Ind. (byte 111)
Category 33 Include Private Ind.(byte 67)
• Possible proposal for new default: public to public,
private to private
• Would required data application change and
database conversion
• ATPCO to revise examples for review and
research possible implementation plan
Advance Purchase: Revise (Category 5) validation
logic when different values exist for fares within the
same pricing unit for different carriers (to be same as
exists for “same carrier”)
• Proposal: Apply the most restrictive value (latest
“From” measurement point)
• Pending Milestone 2/3 issuance
Working Group Summary
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Requirement Update
Reissue vs. Exchange: Continue discussing
suggested data application clarifications along with
possibly limiting scope of redefining Tags
• ATPCO to revise the proposed definitions
• Working group participants to review the proposed
coding recommendations for Resolution 017f
• ATPCO to analyze and work to retire the use of the
mixed process tags
• ATPCO to revise process tags descriptions to
relate to reissue vs. exchange where applicable.
• Pending Milestone 2/3 issuance
Current vs. No Fare Change: Reach agreement on
how to resolve a combination of the following
category 31 data in a single reprice scenario where
the entire itinerary must be repriced using current
fares but a fare component specifies changes to the
flight and fare are not permitted (Change Ind byte 50)
• ATPCO will update data application with examples
illustrating pass versus fail conditions.
• ATPCO to review current usage and intent
• Pending discussion at the next working group
Working Group Summary
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Requirement Update
Dual RBD Validation: Define the validation when
selecting reprice fares for unflown, unchanged fare
components.
• Proposal: When repricing an unflown, unchanged
fare component by keeping the fare, automatically
pass RBD requirements for the fare.
• Pending Milestone 2/3 issuance
MCO to EMD: In the Form of Refund options, amend
current reference to Miscellaneous Charge
Order (MCO) to be Electronic Miscellaneous
Document (EMD)
• Working group approved the proposed changes to
subscription documentation and user interface
• Pending Milestone 2/3 issuance
IF to Cat 15: Revise Sales Restriction (Category 15)
application when used as a Conditional (IF) to
indicate the data validates against the reissue
location as opposed to the original sales location
• Working group agreed in concept
• ATPCO will present this as an agenda item at the
next working group meeting
Working Group Summary
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Requirement Update
Ticket Validity: Provide functionality to indicate a
carrier-specific ticket validity definition.
• Working group agreed in concept
• ATPCO will survey carriers and present this as an
agenda item at the next working group meeting
Penalty > Fare: Clarify that if a penalty/fee is more
than the base fare, systems should apply the
penalty/fee only up to the base fare.
• Working group agreed in concept
• ATPCO will present this as an agenda item at the
next working group meeting
Task Force to define Voluntary Changes and Refunds
on Taxes and Fees
• Ongoing
Working Group Summary
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2018 Roadmap
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2019 Roadmap
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2020 Roadmap
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Resources
Voluntary Changes and Refunds Working Group
• Agendas
• Summary reports
• Upcoming meetings and webinars
www.atpco.net