The Financial Committee has mandated IATA to develop a plan to enhance the interline settlement process and to migrate the industry to electronic billing in line with the move to 100% electronic ticketing (ET). The Board of Governors warmly endorsed this initiative in December 2007.
The Simplified Interline Settlement (SIS) project aims to simplify interline billing, and remove paper from the entire process, delivering tangible financial benefits to the industry.
Paper in Today's Settlement Process
While the airline industry has achieved 100% ET, is driving e-freight, and the Clearing House has eliminated paper from the clearance process through the ICH Web, the interline billing and settlement process is still using legacy paper-based processes.
Over 200 tons of invoices and supporting documents are being shipped between airlines around the world each year to support the airlines' interline billing and settlement process. The processes are loaded with duplicate activities. Even moving to 100% ET will not solve the problem as rejections still require paper supporting documents, and much that is not ticket-related is also processed, such as handling and catering. The resulting costs, and therefore the potential for environmental and monetary savings, are huge.
IATA's Solution
The SIS solution will encompass Passenger, Cargo, and Miscellaneous interline billings and ICH settlements (the UATP category is already automated thanks to the ICH-ATCAN link). The SIS project envisions:
- a completely paperless invoicing environment for prime billings and rejects for all carriers,
- process enhancements for FIRST & FINAL™ carriers to enable billing and settlement automatically at the time of ticket lift and
- integration of the IDEC passenger and cargo billing with ICH settlement on a weekly basis and expansion of the IDEC format with additional optional record types in order to support more billing items, such as rejects.
For more information about what Simplified Interline Settlement will look like, please see the vision.
In order to achieve an enhanced interline settlement, a number of working groups composed of airline experts have been created to develop the requirements for the different aspects of interline settlement.