NewGen ISS

PAConf Program Review and Next Steps

To represent, lead and serve the airline industry

 NewGen ISS
Credit Limit Management Framework

Financial Security +
Remittance Frequency

Accreditation Credit
Credit Status Credit Limit
Model Conditions

Financial Review ‘Credit’ Available to Agent

+ Credit History

NewGen ISS 2
 NewGen ISS
Credit Limit Management Framework

1. Introduce a Credit Limit for all agents with access to BSP Cash sales.

Calculation at global level based on the agent’s remittance frequency and BSP Cash turnover.

Outstanding Cash sales monitored daily against Credit Limit amount.

Reaching the Credit Limit Cash sales results in restriction of Cash as a form of payment.

2. Introduce an ongoing credit history assessment based on:

The number and type of Credit Events.

Adjustments for short/late payments and or payments in wrong currency based on number of
remittances.

3. Establish three Credit Statuses based on the outcome of both Financial Review and Credit History, each with
specific risk management conditions.

Credit limit.

Financial security requirement.

Remittance frequency.

4. Next steps

NewGen ISS 3
 NewGen ISS
Credit Limit Management Framework

Days from the start of Total turnover of the 3

the reporting period to highest months of the
the remittance date previous 12 months

No. of days of creditR&S x BSP Cash Turnover3 highest months

Credit Limit Amount = + 5%
90

Provides room for

sales growth

Calculation above applicable to agents in Credit Statuses A and B. For agents in Credit Status C,
Credit Limit set equal to the financial security amount.

Credit limit will not be less than the financial security required as per Local Financial Criteria.

For Multi-Country agents, credit limit will be established at parent company level, in one of the following
currencies: USD, EUR, GBP, AUD, SGD.

All new applicants with cash facility will be required to provide a financial security that will become the
credit limit for the first 24 months.

NewGen ISS 4
 NewGen ISS
Accreditation Models Framework

 Cash
n/a Credit Limit
Standard Accreditation no Cash
Facility

CC  Financial Assessment

IATA EasyPay
Chargeback Insurance

Cash
Credit Limit

Standard Accreditation with Cash
Facility
CC
Yearly Financial Assessment

IATA EasyPay  Financial Security / Default

Insurance

Cash
Credit Limit

Multi-Country Accreditation
CC
Quarterly Assessment of Parent

IATA EasyPay
Parent Guarantee

Super BSP*  Financial Security / Default

Insurance

NewGen ISS 5
 NewGen ISS
Accreditation Models Framework

1. Introduction of Three Accreditation Models:

Minimum requirements and credit conditions established per model

Multi-Country Agent Criteria defined in Resolution

Multi-Country Assessment Framework

2. A revised Accreditation Framework:

Agency identification under the new models

Measures to improve reporting of Agency Changes

Process for Agent conversions

3. Credit Events & Administrative Non-Compliances

Definition & consequences of each Credit Event

Definition & consequences of each Administrative Non-Compliances

4. Next Steps

NewGen ISS 6
 NewGen ISS
Refresher on IATA EasyPay

1. IATA EasyPay is a new and additional payment method for accredited Travel Agents
to issue tickets through the BSPs.
2. Allows the implementation of credit limit management and the new accreditation
models.
3. Secure, based on a ‘pay-as-you-go’ model with no chargebacks
4. Low cost for airlines (cost recovery model) with a flexible pricing system
5. Fast: Settlement to carriers within 48-72 hours
6. Available to all Accredited Travel Agents
7. Available to all BSP Airlines with possibility to opt-out

NewGen ISS 7
 NewGen ISS
IATA EasyPay

1. Update:
A. Evidence of market demand
B. Comprehensive geographic coverage
C. Successful Proofs of Concept: Technically tested
D. Reviewed and validated by airline payment experts

2. Flexible Pricing System and Flexible Participation:

A. Transaction cost between $0.70 to $0.95 (min. $0.40; max $1.10)
B. Will work with a “Flexible” pricing system, potentially becoming a strategic tool
for the airlines.
C. Airlines will be able to opt-out and opt-in globally. BSP by BSP model to be
assessed.

3. Calendar:
A. Design phase completed, Set-Up phase (~1.5 years).

4. Next Steps:
A. Endorse kick-off of Set-Up Phase

NewGen ISS 8
 NewGen ISS
Global Default Insurance

A standardized global default insurance policy that will be brokered to top credit insurance
companies and made available for travel agents to be listed under on a voluntary basis.

A Financial Security type additional to those currently acceptable under Resolution 850p.

 IATA will establish a framework for brokers and insurers to introduce this additional
financial security letting the market play.

 One single policy for which insurance companies will bid on.

 Insurance will be provided by global credit insurers, not IATA.

 IATA not to participate in the collection of premiums.

NewGen ISS 9
 NewGen ISS
Global Default Insurance

1. Initiate construction of the Global Default Insurance.

Define insurer selection criteria.

Perform risk review and modelling with insurers

Obtain binding terms and pricing.

2. Next steps.

Initiate RFP process.

Resolution amendments drafting.

PAConf Mail vote targeted for Q1-Q2 2016.

Go-live expected upon effectiveness of resolutions amendments.

NewGen ISS 10
For More Information
Email: newgeniss@iata.org
Website: www.iata.org/newgeniss

Thank you!