NewGen ISS ISS was designed under certain market conditions

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Sherilyn Hawkins
5 years ago
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2 ISS was designed under certain market conditions 1971 Mainly brick & mortar travel agents with local operations Mainly flag carriers with strong positions in their local markets Stringent Rules Strict Governance Inflexible Agency Risk Management Limited Payment Methods Legacy Carriers 2

3 43 years later, market conditions have Stringent Rules Strict Governance Inflexible Agency Risk Management Limited Payment Direct Sales (to TA or final Customer) Reduced GDS fees Faster Cash Flow Legacy Carriers Hybrids Other Indirect TA Channels Simpler rules Less Risk Management requirements New methods of payment New Model Airlines 3

Overall Project Vision (New Generation IATA

vision aiming to create a faster environment

accreditation practices that will deliver

Faster More Relevant CUSTOMER CENTRIC Safer

management Safer: Increased protection of

costs for participants and simplify processes

4 Overall Project Vision (New Generation IATA Settlement Services) has a Customer Centric vision aiming to create a faster environment with a safer and easier governance, and accreditation practices that will deliver relevant solutions for the industry. Faster More Relevant CUSTOMER CENTRIC Safer Easier & Cheaper Faster: Improved cash flow management Safer: Increased protection of monies Cheaper & Easier: Measures to lower BSP costs for participants and simplify processes More relevant: Additional ways to do business: New payment methods Choice of accreditation model 4

5 Project Update Enhanced Accreditation & Governance Enhanced Risk Management NewGen ISS: Interconnected Areas of Focus Alternative Methods of Payments BSP Enhancements 5

6 Accreditation & Risk Management Framework Enhanced Accreditation & Governance Enhanced Risk Management 6

choose which model is relevant to their business needs Credit Management that

7 Enhanced Accreditation & Risk Management Current Future One-size-fits all Same risk management processes for all agents Inflexible approach Agencies can choose which model is relevant to their business needs Credit Management that mitigates risk exposure An agent s risk profile determines its credit conditions 7

8 Accreditation Model Offering 3 (tentative) Accreditation Models Agents will be able to easily transition across models as their business evolves Standard Accreditation no Cash Facility (Lite) Standard Accreditation with Cash Facility Multi-Country Accreditation The new models will be subject to governance approval 8

9 Credit Management Overview Financial Security + Remittance Frequency Accreditation Model Credit Status Credit Conditions Cash Facility Financial Assessment + Credit History Credit Available to Agent 9

Global Insurance Solution Issue Existing default insurance schemes and financial security guidelines provide inadequate protection Bank guarantees can be costly and difficult to obtain in required

10 Global Insurance Solution Issue Existing default insurance schemes and financial security guidelines provide inadequate protection Bank guarantees can be costly and difficult to obtain in required time-frame A Global Insurance Solution Better address the needs of Agents & Airlines: Strong, flexible & reliable coverage for Carriers Lower costs & increased flexibility for Agents Additional alternative to bank guarantee (agent decides which to obtain) A feasibility study underway with two leading global insurance brokers 10

11 Alternative Methods of Payment Alternative Methods of Payments 11

12 IATA EasyPay Voluntary pay-as-you-go solution Alternative to cash & credit card form of payment via the BSP Limited-scale pilots will start in Spain & South Korea next year $ $ Travel Agent IATA Airline 12

13 IATA EasyPay GDS Process 5 GDS e-ticket and Receipt 2 TRAVEL AGENT Agent requests a reservation using its 16-digit number 3 GDS requests payment authorisation 1 Agent funds Its Bank Account Issuer generates authorization and irrevocably blocks funds 4 Travel Agent Bank Account 13

14 An Integrated Approach Enhanced Accreditation & Governance Enhanced Risk Management Alternative Methods of Payments BSP Enhancements 14

15 NewGen Value Proposition Travel Agents Relevance through Business Choice Greater Flexibility Agents can evolve easily across models Options to Lower Bank Guarantees & Financial Security Costs Airlines A more secure environment Credit management that mitigates default losses Cash facility & risk management processes tied to an Agent s profile 15

For More Information Email: newgeniss@iata.

16 For More Information Website: Thank you! 16

NewGen ISS ISS was designed under certain market conditions

NewGen ISS ISS was designed under certain market conditions ISS was designed under certain market conditions 1971 Mainly brick & mortar travel agents with local operations Mainly flag carriers with strong positions in their local markets Stringent Rules Strict