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ICH Update2010 ICH User Group

Nicholas CooteClearing House Manager

KUL – 20-22 Oct 20102010 ICH UG Meeting 2

Where have we come from? The deepest recession for 20 years, possibly since the

1930s ICH volumes in 2009 were down by 20% on 2008

More in P, C and U, less in M

23 suspensions in 2009 Several major bankruptcies


What is in store for 2010? Demand is increasing, and faster than capacity

Load factors up from around 72% to nearly 79%

72%73%74%75%76%77%78%79%80%81%

2006 2007 2008 2009 2010

% A

SK

s

300

320

340

360

380

400

420

Ave

rag

e o

ne-

way

far

e

Passengerload factor

Average one-way fare


Business confidence is back


Profits are increasingGlobal commercial airline profitability

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

F

% r

even

ues

-20

-15

-10

-5

0

5

10

15

20

US

$ bi

llion

Net losses(right scale)

EBIT margin (left scale)


Clouds on the horizon?

Not in the clear yet – 2011 is looking mixed Load factors seem to have passed their peak Business confidence seems to have turned


ICH activity Throughput is increasing – up by 8% on last year

Led by UATP and Cargo

Plenty of new joiners 11 Airlines, 10 Associates and 2 Sponsored

Only 6 suspensions so far this year, with a loss ratio of just 0.0001% The remainder was covered by security deposits or by

recoveries after the event


Changes related to the SIS project New interface to SIS to replace ICH-Web and F12 Streamlined interclearance with the ACH New reports to show sources of data (ICH Web or SIS) New Suspended Member reports Other changes

Improvements to F3 processing

NOTE: Existing ICH reports will continue to be available after SIS implementation


Changes to service pricing in 2011 Participation structure and fees have been unchanged since

inception Need to start rethinking both in the light of SIS needs Non-IATA Airlines, Strategic Partners, Airline Subsidiaries and

Sponsored airlines Billings up to USD1m pa – USD10,000 pa Billings up to USD10m pa – USD20,000 pa

Associate Members and Sponsored non-airlines Billings up to USD1m pa – USD16,000 pa Billings up to USD10m pa – USD32,000 pa

ICH Web fees and billing over USD10m – rates are unchanged


Changes to service pricing in 2011 New baseline pricing implemented for SIS users

Billings up to USD100,000 pa – USD1,000 No ICH-Web fees – use of ICH-Web not permitted Applies to Airline Members and Associate Members Effective from go-live, and included within the SIS Participation

Fee


SIS Migration Surcharge Reminder

At SIS go-live, the SIS Migration surcharge comes in Published in March 2009 and also highlighted last year Applies to all ICH Web users Charge likely to apply to period October-December 2011 Rate varies according to number of invoices processed and

status of Member Published amounts will be prorated accordingly


SIS Migration Surcharge


Changes to settlement rules in SIS Settlements will be based on invoices, not claims

No invoice = no settlement Adjustments will be based on invoices, not claims Incorrectly issued invoices; error identified before Closure:

Issue a credit invoice to correct the settlement balance Same Charge Category and Charge Code, and reference the original invoice Goes through ICH in the normal manner Maintains the link between invoice values and settlement values

Settlement value is changed by the ICH after Closure due to a Protest/Adjustment:

Issue a credit invoice as above with Settlement Method Indicator = R Signifies ‘Reversal’, and SIS will not route it to the ICH to avoid a duplicated

adjustment


Changes to settlement rules in SIS ICH-Web blocking for migrated users

Applies once you have migrated a complete billing Category (P, U, C or M)

The migrated Member can notify the ICH of its move of that Category, and the ICH will publish this to the Membership

After 6 months, ICH-Web access will be closed to both billing and billed Members

Effectiveness date still under discussion All billings thereafter must go through SIS, in both directions

May mean manual entry through IS-Web


Changes in the Regulations Full review by ICH Panel New edition in 2011 Review of Protest procedures Changes to

Claims entry and submission (Procedure 1) Report outputs (Procedure 2) Signatory processes (Procedure 3) Service charges and fees (Procedure 11)

New concepts, such as handling and disposal of duplicate claims


ICH WG LA resigned from the Panel,

Now LH (Chair), UA, KL

Open for applications for membership Must be a senior financial manager from an IATA Member, in

good standing, approved by CFO CV to be submitted to Financial Committee for review

Must be able to travel to meetings (not more than twice per year)


ICH UG Focus on SIS – this will probably be the last major industry meeting

before go-live Most of the meeting has been given over to SIS briefings SIS fundamentally changes the way you make your claims

E-invoice instead of ICH-Web/F12 Take the opportunity to talk to the SIS project team, and colleagues

from other airlines ICH staff will answer any questions on impacts on ICH processes Give us any suggestions for improvements or changes in the

services we provide


Final note For ICH Members SIS is mandatory You don’t have to migrate immediately, or all at once

You can be part ICH-Web and part SIS

In the SIS world, your invoice is your claim Benefit: Settlement always reconciles to invoices Corollary: Failed invoice = no settlement

A huge change for all of us, including ICH itself We will do all we can to support and assist our Members during

the transition


Thank you

Email:

[email protected]

ICH Website:

www.iata.org/ich

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