Transformation in Revenue Accounting

Transformation in
Revenue Accounting
World Financial Symposium 2014
Chair Opening
Gyrgyi Szantner
Head of Finance Services
British Airways
NDC
Impact on Revenue Accounting
Bryan Wilson
Director, Industry Architecture, Financial & Distribution Services
(FDS), Transformation
IATA
New Distribution Capability

Impact on Revenue Accounting
Bryan Wilson
Industry Architect - IATA
Overview
What is NDC?
Industry architecture changes
Focus on NDC processes
What this means for Revenue Accounting
International Air Transport Association 2014
What is NDC?
NDC is a travel industry-supported program (NDC

Program) launched by IATA for the development and
market adoption of a new, XML-based data transmission
standard (NDC Standard).
The NDC Standard will enhance the capability of
communications between airlines and travel agents and
will be open to any third party, intermediary, IT provider or
non-IATA member, to implement and use.
From Flight Distribution
Travel agents only

have access to
limited airline
information that
essentially
commoditizes the
airline to schedule
and price
to Air Retailing
Travel agents want access to all of an airlines
product offering as available in airline web sites
NDC is about giving travel agents the

same capability as the airline website
NDC - Air Retailing Tomorrow

Content
Aggregators
NDC
Airline Offer
NDC
(GDS | New
Entrants)
Management
Travel
Agents
Travelers
(TMC | OTA |
Independent)
System
NDC
aggregation
Airline
Travelers only access & accept airline offers

Airline systems to keep control of all data
Revenue Accountants to have good data at last!
Regulatory
DOT Approved Resolution 787
Comparison shopping under the current system is
generally limited strictly to comparing fares, and it is difficult
to make price quality comparisons of different carriers
product offerings (...)
The modernized communication standards and protocols
and the marketing innovations that [Resolution 787] could
facilitate would be pro-competitive and in the public interest
NDC Technical Development

1
November 2013
NDC Shopping schemas (v1.0) released for testing
December 2013
Live transaction | Hainan Airlines & TravelSky
July 2014
Draft End-to-End schemas (v1.1) (except interline)
September 2014
Candidate Release NDC Shopping schemas (v1.1)
November/December 2014
Candidate Release NDC Booking, Payment & Ticketing
1st Implementation Guide
Mid 2015
Updated NDC schemas
New NDC complete interline capabilities
Overview
What is NDC?
12
Overview
What is NDC?
The Full NDC Process
Message types:
Proprietary
NDC ex Airline
NDC ex Agent
NDC ex Aggregator
Cash credit
check
Profile
Distributor
Passenger
3b
1a
Airline
Profile
Shop
ET Server
Own ticket
stock
2 Order
3a
3c
1b
Offer
Aggregator
Agent
Credit Card
Authorization
Airline
Pay
3d
or
5b
Files for Credit

Card Remittance
BSPLink
Agents &
Airlines
Billing
5c
5a
Own
Sales
$$$
$$$
6a
IATA BSP
6b
7 NDC Steps
0. Setup
1. Shop
2. Order
3. Pay/Ticket
4. Report sale
5. BSP Confirmation
6. Payments
The Full NDC Process

Cash credit
check
Profile
Distributor
Passenger
1a
3b
Airline
Profile
3a
ET Server
Own ticket
stock
2 Order
Aggregator
Agent
3c
1b
Offer
Shop
Credit Card
Authorization
Airline
Pay
3d
or
5b
Files for Credit

Card Remittance
BSPLink
Agents &
Airlines
Billing
5c
5a
Own
Sales
$$$
$$$
6a
IATA BSP
6b
7 NDC Steps
0. Setup
1. Shop
2. Order
3. Pay/Ticket
4. Report sale
5. BSP Confirmation
6. Payments
The Interline Process

10 steps for Interline NDC
0. Setup
1. Shop with ORA
2. ORA relays Complementary Shop RQ to POA
3. ORA consolidates POA RS into its Aggregator RS
4. Agent sends Order RQ to ORA
5. ORA accepts POAs offer with Order RQ & confirms with Agent
6. Ticketing & Payments all with ORA as Validating Carrier (incl BSP
reporting & settlement)
7. ORA as Validating Carrier advises ET# to POA
8. ORA as Validating Carrier manages ET/EMD coupon(s) with POA
9. POA claims flown revenue through SIS-IDEC (not NDC messages)
Participating
Offer Airline
2
Passenger
Airline Profile
incl Interline markets
1
Agent
Aggregator
Order
Offer
Responsible
Airline
Interline
Settlement
Tkt Nr
IATA
SIS/ICH
7
8
Tkt /EMD
Msgs
(Validating Carrier)
6
Interline
Order
0
Offer
Shop
Interline
Shop/Offer
Ticket
BSP
Overview
What is NDC?
Good News for Revenue Accounting

1) With NDC you keep control
-
Offer Airline sets the Offer Rules

Only Offers can get Ordered
Only Orders can get ticketed
Much less scope for fictitious bookings held in a GDS
No scope for ticketing data to be manipulated
Less revenue integrity checking, Less ADMs
2) NDC simplifies interline tickets/EMD

-
Each interline participant states their price & product code

No need for complex through fare filing or proration
No need to use 30 pages of industry ancillary codes
No confusion of the pax order between the players
Are you ready to

1.
Embrace the Offer ID?

- Its your offer or your interline partners proposal
- Dont check it, just ensure its used
2.
Stop ticket issuance to defaulted agents?

- IATA now provides ticketing authority status files
- Files sent every 2 hours as with GDSs
3.
Report sales to the BSP?

- IATA offers NDCLink service to airlines reporting sales to BSPs
- Just 1 file in DISH/RET format required for all BSPs
4.
Use new formats for reporting RET and IS-IDEC

- No more RBDs or Fare Construction data elements
- Instead you will want to record NDC Offer IDs
and a final tip
Irregular operations
- More pax will be travelling on fares which lack a fare
construction
- Time to re-assess more of the default use of Y fares?
- Or time to negotiate more bilateral prorates?
www.iata.org/ndc
The Operational Opportunity

for Revenue Accounting
Gyrgyi Szantner
British Airways
The Operational Opportunity

for Revenue Accounting
Gyorgyi Szantner
Head of Finance Services, British Airways
Traditionally Revenue Accounting

has been
relying on..
travel agents & other sales offices created sales reports to learn a ticket
has been sold
airports to collect and send flight documentation to account for revenue
perceived as
late at providing sales and revenue information
either delaying speedy implementation of commercial initiatives, or
not evaluating and reporting sales / revenue in line with commercial
expectations
reactive
Transformation in Revenue Accounting Operational
Opportunity
2
and that was because

Opportunity
3
History

Opportunity
4
But now
Supported by operational databases containing reservation, e-ticketing, flight and

departure information that communicate with each other on a real time basis
Opportunity
5
So what can revenue accounting

take from these changes &
what can it give to the business?

Opportunity
6
Tapping into this rich data available in all airlines operational systems will create
Opportunity:
Benefit to business:
Receive sales data immediately when

a ticket is sold anywhere in the world
Sales monitoring, improved forecasting

(revenue and cash), risk management,
fraud control
Improved decision making
Know the revenue from a flight as

soon as the aircraft door is closed
End-to-end view of a customers

journey
Syncronised data
Common use of reference data to
sell,
manage the flight and
account
Meeting and Name of Presentation
7
effective monitoring of operational

controls
tactical or strategic adjustment to flight
capacity
Facilitate recovery of service failure by

customers first point of contact
no back end reconciliation needed
immediate response to market changes
- what you can sell, you can account
for
and the standards coming with NDC also provide

Opportunity:
Benefit to business:
NDC ticketing airline controlled
Revenue integrity - eliminate need for

sales audit
Interline messaging at offer stage for

interline price
Interline settlement based on price

agreed at time of offer improved
supply and demand management

8
So the questions are

Do airlines value this opportunity and the potential benefits it can bring,
and,
if they do,
How can the revenue accounting system providers respond to this

challenge?

Opportunity
9
Thank you

10
10
ERP General Ledger Perspective

Simon Lescarcelle-Evin, Head of T&T APJ Services,
Deputy Global T&T Services Hub Head, SAP
Baljeet Nagi, ERP Sales Dev & Strategy leader Gulf &
Saudi Cluster, Oracle
Beyond ERP Airlines Back-Office

SAP Ready for Departure!
Simon Lescarcelle, VP & Global Head of Transportation & Manufacturing Services, SAP
World Financial Symposium - Abu Dhabi, UAE, September 17, 2014
Airlines Words from the Floor

Piecing together the Picture
Lots of high cost

manual processes, many
time consuming
2014 SAP SE or an SAP affiliate company. All rights reserved.
Poor data
governance, risk
and compliance
Confidential
What does Finance Excellence means for an Airline?
Standardization
Real time reporting
Automation
Best Practices
Shared Service
Airlines Experience
Confidential
Impacting the New Business Environment

Comprehensive End-to-End Finance Back-Office Solutions from SAP
Treasury and
Financial Risk
Management
Collaborative
Finance
Operations
Enterprise Risk
and Compliance
Management
Accounting
Payments and Bank

Communications
Receivables
Management
Enterprise,
Risk Management
Route Profitability
Planning, Budgeting
and Forecasting
Entity Close
Cash and Liquidity

Management
Collaborative
Invoice to Pay
Controls and
Compliance
Management
Flight Order
Profitability and Cost

Management
Corporate Close
Debt and Investment

Management
Travel Management
Access Governance
IATA Clearing
House (SIS)
Monitoring and
Reporting
Reporting and
Disclosure
Financial Risk
Management
Financial Shared
Services
International Trade
Management
Financial Close
Governance
Commodity Risk
Management
Financial
Planning and
Analysis
Develop and
Translate Strategy
Accounting and
Financial Close
Airlines Industry
Extension
Fuel Management
Fraud Management
Audit Management
Confidential
Limited Ability of CFOs to Support the Business
28%
Drive business
innovation
Drive business
innovation
Keep the
lights on
72%
Keep the
lights on
Forrester IT Survey, 2013
76% of Finance executives believe at least half their time

should be on high-value planning and analytic activities,
though only 55% achieve this
Source CFO.com Research 2013
Confidential
Beyond Airlines Finance Excellence Back-Office

Integrated Revenue Analytics for Airlines
Ability to analyze passengers revenues based on the year
comparison of issued revenue and flown revenue.
Analyze billions of PNR records and forecast future booking
based on trends, weather condition, seasons (vacations),
geography, gender, type of traveler, etc.
Effectiveness of promotions based on region, season, etc.
Ability to build predict fares for tickets with inputs like
seasons, competitor reactions, customer choices, direct /
hopping flights, code share, load, etc
Customer travel, choice, frequency, destinations, type of
traveler trends from customer loyalty programs.
Analyze and predict passengers requirements, passenger
in-flight purchases, music, movies, games, beverages, to
enhance at the end the Passenger Experience.
Confidential
SAP has Evolved Significantly

We are challenged by Similar Dynamics in Other Industries & have responded
NEW SAP:
New Business Outcomes
Times have
changed
INFLECTION
POINT
Old Model
Legacy Company
Airlines Excellence Back-Office
Integrated Analytics for Airlines

Cloud
Mobile
BA
ERP
ERP
ERP
BA
Analytics
Applications
Database & Technology
Others1
Powered by SAP HANA

Product
2002
2007
Industry
& LOB
Solutions
2010
Solution
Value
2014
Confidential
SAPs Next Generation Accounting(s) Solutions

SAP HANA is delivering Integrated Revenue Analytics for Airlines
Airlines Benefits
Stability
From
Flexibility
Totals & Indices
ERP
Operations
Documents
model
Totals & Indices
Analytics
Management / Sales Reporting
Significantly
reduced
reconciliation effort
Flexibility
Stability
internal and
external reporting
Account driven data
Pre-Defined Aggregates
BI
To
Processing
Financial Accounting
Harmonized
Higher flexibility in
Processing
Operations
Documents
HANA
Financial Accounting
Management / Sales Reporting
HANA Views
Significantly
on the Fly
Analytics
Logical Documents
reporting and data

customization
reduced memory
consumption
Confidential
Thank You
Simon Lescarcelle
VP & Global Head of Transportation
& Manufacturing Services
fly
Run Simple
SAP France
35, rue dAlsace
92 300 Levallois-Perret
M +33/615941017
F +33/146177988
mailto:simon.lescarcelle-evin@sap.com
Confidential
Transformation in Revenue
Accounting
Baljeet Nagi- ERP Sales Development & Strategy Leader
Copyright 2014 Oracle and/or its affiliates. All rights reserved.
Safe Harbor Statement

The following is intended to outline our general product direction. It is intended for
information purposes only, and may not be incorporated into any contract. It is not a
commitment to deliver any material, code, or functionality, and should not be relied upon
in making purchasing decisions. The development, release, and timing of any features or
functionality described for Oracles products remains at the sole discretion of Oracle.
Oracle Confidential Internal/Restricted/Highly Restricted
Oracle in Air Transportation

20 of the worlds top 20 airlines get better results with
Oracle
Over 60 of the worlds leading airlines use Oracle

Applications
73 of the worlds top 100 airlines use Oracle Technology
47 of the worlds major airports (150 Airport sites) use
Oracle Applications
CFOs Want to Modernize Finance

Strategic priorities for global CFOs: 2013-2015
Improve Speed of
Decision-Making
Respond faster to internal
and external clients
Flex the business model in
response to change
Leverage High-Impact
Technologies
Restructure the
Finance Skill Set
Big Data
Data analysis
Mobile
Systems expertise
Cloud
Business partnering
Source: Oracle-Accenture Research: Empowering Modern Finance: The CFO as Technology Evangelist, February 2014
Challenges in Airline Revenue Accounting

Revenue Accounting is a challenging component of airline accounting, encompasses
large volume of transactions and unique reporting requirements for liability, revenue,
taxes, fees, commissions etc.
Lots of manual work in the processing of tickets / coupon

Multiple Data sources for Passenger Data(PNR data from global distribution systems,
alliance partners and other airlines)
Historical data and legacy system that need upgrading
Lack of real time revenue analysis from Reservation systems
Lack of real time posting to GL
Lack of real time analytics on performance and Management Reporting
Results in Higher Processing cost impacting P & L
Finance executives are tasked to evaluate the potential to centralise and streamline
Revenue Accounting process in order to achieve reduce cost ,complexity and maximise
ROIs
Transforming Revenue Accounting
Oracle can work with IATA, the Airline community and our partners to transform
traditional Revenue Accounting processing to modern Revenue Accounting, extending
ERP Financials:
Provide Automation, Accuracy , Flexibility , Agility, Efficiency ,Performance, Security
and Analytics.
Deploy Cloud solutions for Tickets and Coupon processing (Order to Cash). Reduce
infrastructure and outsourcing costs.
Tightly integrated Revenue Accounting solution with General ledger and Account
Receivables brings everything under one umbrella.
Bringing the cost of own coupons processing at Zero cost.
Reduce the cost of collection reconciliation (cash and credit card) process.
Deploy SOA architecture to provide real time information to the business. This can be
used to produce level 1 revenue result of a flight before it lands to destination.
Summary
Analytics
Mobile
Social
Modern Finance
Modern Cloud
Networking Break

Revenue Accounting
Evolution of Systems
Raj Bhavnani, CFO, Mercator
Nick Coote, Director Strategic Development, Financial Exchange, IATA
Vipul Jain, CEO, Accelya
Joanna Thibault, Head of Ticketing & Finance, Amadeus
Transformation in Revenue
Accounting
IATA WFS
Is Revenue Accounting as we know it dead ?
The answer depends on how we define Revenue

Accounting
The mandate has not changed

Report, protect and assure
Long live Revenue Accounting !
So, what has changed ?
Heirarchy of Information
INSIGHT
KNOWLEDGE
INFORMATION
DATA
So what is changing ?
Focus was on operations

Deliver processes
Manage costs
Protect revenue
Finance back office
Focus is on analytics
Deliver results
Eliminate cost
Increase revenue
Business partner
What does this transformation mean ?
Skill sets of people

Move to a variable cost model
Anticipate what the business will need
The choice is yours !
Time is of essence sense of urgency

Do you want to spend it solving operational
problems that no one cares about ?
OR
Do you want to be part of the brain trust of your
organisation ?
The best way to predict your future is to create it
IATA Financial Exchange:

A vision of revenue accounting in the future
Nicholas Coote
Director Strategic Development,
IATA Financial Exchange
Move away from the past

History of paper documents
Need for custom system development
High cost of operation leads to corner-cutting,
and piecemeal out-sourcing,
Leads to loss of control of costs
Manually-oriented processes, designed

around said paper documents
Transformation in Revenue Accounting

2
Recognise the present

Tickets may be electronic, but the concept is probably here for a while
yet
We are all operating to standards, but may not be making the best use
of them
We may not need to do revenue accounting the way we do it, but
revenue accounting we will need to do
A huge industry has built up around the concept, and that encourages
inertia

3
Move into the future

Much effort goes into basic data processing which
adds no value
Turning data into information is the part that adds value
ERP systems of today are not the manual processes

of the 50s, nor are they the batch systems of the 80s
They can do a lot more
Split revenue accounting into industry-standard

neutral data processing, and leave the ERP systems
to deal with the accounting
Need to focus on customer value-add with NDC,
rather than fighting over nickels and dimes in revenue
accounting
4
We already have the infrastructure

Lets make more use of it!
ARC Compass is used in the AIA First & Final service, but
it is a central ticket database of prorated sales values
ATPCO provides data enhancement services which can
reduce the manual work of error correction on ticket data
SIS does interline billing and reporting, and can process
billing automatically
Most airlines have modern ERP systems already
Industry systems operate to industry standards,

maximizing consistency, simplicity and costeffectiveness
And best of all, these are industry services, run for the
benefit of the industry and managed with industry
oversight!
5
So let us look at a
simpler, lower-cost
future, where airlines
can focus effort on
generating added value
instead!
6
Future of Revenue
Accounting
Vipul Jain
I N I T I AT I V E S
I M PA C T
E X P E C T AT I O N S
ACCOUNTING
-
Should cover all revenues
NDC will have a huge impact
New forms of payments
Agility to adapt to business needs
Speed of Processing
Cost & Productivity pressures
Accounting Controls & Risk Management
ACCOUNTING
ASSURANCE
-
Beyond conventional sales audit
Cover full cycle- book to collected
New forms of payments newer

challenges
Focus on prevention
Co-partner in yield protection
ACCOUNTING
ASSURANCE
ANALYTICS
-
Core to the function
Not just a supplier of data, but also a

consumer
Big data & sophisticated tools
Strengthen the core function Accounting
Co-partner in managing revenue assurance
Evolve with Analytics mind-set and

capabilities
THANK YOU
Copyright 2014 Accelya Holding World S.L. and its subsidiaries (hereinafter jointly referred as Accelya Group). All rights reserved.
Contents in this document are confidential and proprietary to Accelya Group. No part of this document should be reproduced, published, transmitted or distributed in any form or by any means,
electronic, mechanical, photocopying, recording or otherwise, nor should be disclosed to third parties without prior written approval from Accelya Group.
IATA World Financial

Symposium 2014
2014 Amadeus IT Group SA
Lets shape the future

of travel
Joanna Thibault
Head of Finance & Ticketing
Airline IT Solutions
Industry net margins

are very low
2014
Amadeus
IT Group
2014
Amadeus
IT Group
SA SA
on
average
$5.42 per
ticket
Page 2
Source: IATA, 2014 worldwide revenue forecast per passenger

departed
Airline revenue accounting still sub-optimal

Stand-alone solutions with limited
integration & complex interfaces
Slow revenue reporting limiting

decision making
Human-resource intensive
activity area
Limited evolution capability to embrace new industry initiatives
Page 3
Non optimized revenue recognition

impacting cash flow & profitability
How can Amadeus help you?
Adapt to industry changes and to

your evolving business needs
Turn revenue accounting

into a strategic function
Thank you
You can follow us on:
AmadeusITGroup
amadeus.com/blog
amadeus.com
Come see us at
Booth #1
Or write us at
revenue.accounting@amadeus.com
Revenue Accountants
Perspective
Christian Albrespy, Director Financial Shared Services Center, Air France

Raghavan NRS, Head of Financial Reporting, Etihad Airways
Konda Reddy, Director of Finance, Qantas Airways
Kevin Thiel, Director Revenue Accounting, Alaskan Air

Track Closure
Gyrgyi Szantner
British Airways
Transformation in
Revenue Accounting

Transformation in Revenue Accounting

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Transformation in

New Distribution Capability

Industry Architect - IATA

International Air Transport Association 2014

NDC is a travel industry-supported program (NDC

International Air Transport Association 2014

From Flight Distribution

Travel agents only

International Air Transport Association 2014

International Air Transport Association 2014

NDC is about giving travel agents the

International Air Transport Association 2014

NDC - Air Retailing Tomorrow

Travelers only access & accept airline offers

International Air Transport Association 2014

NDC Technical Development

International Air Transport Association 2014

International Air Transport Association 2014

International Air Transport Association 2014

International Air Transport Association 2014

International Air Transport Association 2014

International Air Transport Association 2014

The Full NDC Process

Files for Credit

International Air Transport Association 2014

The Full NDC Process

Files for Credit

International Air Transport Association 2014

The Interline Process

incl Interline markets

International Air Transport Association 2014

Good News for Revenue Accounting

Offer Airline sets the Offer Rules

2) NDC simplifies interline tickets/EMD

Each interline participant states their price & product code

International Air Transport Association 2014

Are you ready to

Embrace the Offer ID?

Stop ticket issuance to defaulted agents?

Report sales to the BSP?

Use new formats for reporting RET and IS-IDEC

and a final tip

International Air Transport Association 2014

International Air Transport Association 2014

The Operational Opportunity

The Operational Opportunity

Traditionally Revenue Accounting

and that was because

Transformation in Revenue Accounting Operational

Transformation in Revenue Accounting Operational

Supported by operational databases containing reservation, e-ticketing, flight and

So what can revenue accounting

Transformation in Revenue Accounting Operational

Receive sales data immediately when

Sales monitoring, improved forecasting

Know the revenue from a flight as

End-to-end view of a customers

effective monitoring of operational

Facilitate recovery of service failure by

and the standards coming with NDC also provide

NDC ticketing airline controlled

Revenue integrity - eliminate need for

Interline messaging at offer stage for

Interline settlement based on price