47th Issue Quarter 2, 2013 Paperless Operations: Not Just About Paper Chris Markou, IATA’s Assistant Director of Engineering and Environment, Operations, explains how IATA is extending its paper-free mission to an area of seemingly unwieldy complexity—aircraft operations. From E-ticketing to Aircraft Operations A paper-free aviation industry has been both a long-term goal and a daily preoccupation of IATA’s for almost a decade. The first phase of paperless operations was achieved in 2008, when the industry moved to 100% electronic ticketing. The E-ticketing initiative not only streamlined passenger travel and simplified the business, it also procured substantial cost savings for aviation. The industry is now setting its sights on an area of exponentially greater complexity: aircraft operations. Each discrete component, not to mention the aircraft as a whole, can last more than twenty years, as opposed to a passenger ticket, whose lifespan from purchase to reconciliation is at most two years. Having one code or number to manage would do much to simplify aircraft operations. Moreover, tracking and tracing parts and their maintenance history require the involvement of regulatory authorities. This aspect did not even figure in the implementation of E-ticketing. Based on the principle of one part/one unique ID, the goal is to devise a means of tracking parts from their manufacture through their time in service from aircraft to aircraft; on the shelf or in repair shops, either internally or externally; and on loan to another airline or supplier. Turning Complexity into Transparency The complexity is tied to the necessity of each part meeting certain regulatory requirements. Paperwork is still used to keep track of the part’s life and service history, opening up the possibility for human error as well as loss, either physically or on paper. The complexity is increased by the fact that paperwork is not yet standardized between airlines and maintenance, repair, and overhaul (MRO), further obscuring the exchange of information. Without traceability, there can be no transparency. A reliable tracking system is the only solution: electronic, seamless, and standardized. The whole aircraft could then be traced and tracked—both its integral value, and the value of its component parts. Leasing companies would certainly benefit from such a solution as a means of confirming that all requisite maintenance had been done, tracking who did it, and ensuring compliance with applicable regulations. Flags could be programmed into the electronic tracking systems to alert maintenance teams of verification and expiry dates and of regulators’ deadlines for repairs and modifications compliance. Standardized electronic records would eliminate the need for stamping hard copies, an unnecessary waste of time and money in this technologically advanced age. Devising Solutions: The Paperless Aircraft Operations Think Tank IATA is perfectly positioned within the industry to oversee the development and implementation of a secure, harmonized process. The Paperless Aircraft Operations Think Tank was established by IATA to bring together aircraft manufacturers, IATA members, suppliers (MRO), lessors and other industry stakeholders to devise a uniform proposition that can then be presented to regulators. Once guidelines are universally accepted, both aircraft and parts will be transferred without generating a paper trail, reaping huge cost and time savings for the whole supply chain. Fifty Think Tank members, including regulators, some Strategic Partners—both leasing and RFID companies—and the representatives of over fourteen airlines, convened at a meeting this past March to discuss manifold issues surrounding the project: • Replacing scanned paperwork with directly input electronic files • Using electronic versus digital signatures • Adopting radio-frequency identification (RFID) to trace and track aircraft and parts from the point of manufacture By capturing parts off the assembly line with RFID, paperless aircraft operations promise massive gains in terms of safety and security, not to mention the aircraft supply chain, logistics, inventory management, as well as maintenance. Moreover, the use of advanced technologies such as RFID will openly challenge current inefficient practices. For example, the impact on an airline’s maintenance program would be impressive, since parts that expire every 10 years would not have to be inspected every 16 months, as is current practice. Paperless operations are not just about paper. Contriving their implementation offers a valuable opportunity to change mindsets and processes, for the benefit of aviation as a whole. To learn more about Paperless Aircraft Operations and the Think Tank, please contact Chris Markou or the SP team. Back to top AccesRail: Seamless Air-Rail Intermodality in Spain Seamless air-rail intermodality creates opportunities for airlines and railways to cooperate in a mutually beneficial way. Airlines are able to extend their network, servicing locations with smaller airports or no airport at all, and railways are able to integrate their rail segments with air in the same itinerary. For example, some Star Alliance member airlines transport passengers to Madrid, at which point Renfe (Spanish Railways) transports them onward to more destinations throughout Spain. What does it mean for the travel trade? Simplicity, since it makes it possible to sell a US Airways journey from Philadelphia to Seville. Booked as a true fare and ticketed all at once, this trip combines a flight from Philadelphia to Madrid and a train segment from Madrid to Seville. And that’s just one example: on behalf of Renfe, AccesRail has loaded key Spanish cities onto the global distribution systems (GDSs). This means most IATA member airlines can now offer their clients intermodal travel solutions. And customers win, too. With a seamless air-rail ticket, they can reach their chosen Spanish destination on high-speed AVE trains that attain up to 310 km/h (193 mph). A growing number of successful seamless air-rail examples already exist, and AccesRail can attest to the fact that much growth has yet to come. In an environment where time management and productivity are of the essence, operators know it’s wise to deliver what the market wants. In our experience, air-rail intermodal successes are economically possible. This success is achieved by combining airline and railway expertise and developing solutions, so both parties can engage in intermodal activity without changing internal systems and procedures. Denis Grenier Vice-president, Business Development Back to top Accelya: Looking Beyond the Traditional Audit For most airlines, “audit” means an examination of accounts to check their veracity. However, many forward-looking airlines see advantages to audits beyond legal adherence. Audits not only give assurance of financial health but also provide an opportunity to correct errors and form a basis for ongoing improvement. The passenger-sales audit is a worthwhile experience for airlines, but the scope of services is often unnecessarily limited. While a passenger journey has three stages—booking, ticketing, journey—airlines typically restrict the audit to the ticketing stage, comparing the ticketed amount against the contract. What is often overlooked is the booking itself and events post-ticketing. A passenger-name records (PNR) audit allows airlines to check if the agency has misapplied booking rules in terms of ticketing time limits or advance reservations. Inconsistencies with the ticket can also arise, for instance when the booked class does not correspond to the ticketed class. In either case, airlines can take steps to penalize the agency in question. A PNR also allows the audit of ancillary fees, including excess baggage, seat allocation, and so on. Such items are rarely audited, leading to a misapplication of policies by the agencies and, ultimately, revenue loss. Similarly, many airlines do not audit changes made after ticketing. Even at this stage, booking changes arise that may lead to revenue loss. Many agencies are permitted to revalidate tickets/coupons, but checks on these revalidations are often overlooked. A revalidation audit can review such items to ensure that additional fees have been collected and verify whether the agency revalidations were authorized. If not, appropriate penalties can be calculated. Revenue recovery from a full lifecycle audit can be significant. The consequential effect of policy enforcement, together with appropriate penalties for abuse, encourages booking discipline and leads to maximized revenue—surely the hallmarks of a healthy airline. Accelya provides full lifecycle audit services to airlines, from booking through to completion of the journey. Peter O’Sullivan Head of Business, Zero Octa (part of Accelya Group of Companies) Back to top ISO Software Systeme: SIS-compliant Invoicing for Ground Handlers The change in the international settlement procedures, in accordance with Simplified Interline Settlement (SIS) has created a market for products that make invoicing paperless. Airports and airlines have already adopted IS-XML and SIS. IATA also promotes SIS standards among all suppliers, including ground handlers. Introducing structure into an unstructured process can be both challenging and rewarding. Yet few ground handlers have a system in place to manage the new guidelines. To support paperless invoicing, ISO Software Systeme has designed an innovative account settlement system for all suppliers of ground-handling tasks. It allows them to invoice electronically the services they have rendered to their clients. To date, this process has been paper-based, involving a great deal of manual labor. Going forward, billing can be done electronically. The solution handles all charge codes and categories and all internal and external invoice types, including supporting documents. Thus, the introduction of structure into an unstructured process often goes above and beyond the original objective of making billing processes SIS-compliant. Moreover, accounts-receivable processes through IATA SIS are settled immediately, preventing massive delays and avoiding the liquidity costs of a bidirectional settlement procedure. Based on 25 years of experience in the aviation industry, the interline settlement solution meets the specific needs of ground handlers. Susanne Reiser Product Manager SKYfly Back to top QSL Consultores: iAMS in the South Pacific Region Modern aviation management requires compliance with different standards to achieve safety and excellence. IATA promotes the implementation of integrated Aviation Management Systems (iAMS) to achieve quality, safety, and security outcomes. Moreover, the enhanced IATA Operational Safety Audit (IOSA) will be mandatory as of September 2015. These changes in standards and increased code-sharing activities are compelling the airlines to implement iAMS. In January 2012, ATS Fiji Ltd., a ground handler, cargo, maintenance, and aviation-catering company operating in the South Pacific region, was able to certify its management system (iAMS) was in compliance with ISO 9001 (quality management), ISO 22000 (food safety), OHSAS 18001 (labor safety), JAR-145 (aviation-maintenance standard), and the IATA Safety Audit for Ground Operations (ISAGO). It became the first organization in the region to achieve this goal. The system was able to reduce non-quality costs and increase revenues though improvements at the process and service levels. Savings during the first year of operation have been estimated at more than a million US dollars. QSL Consultores, an IATA Strategic Partner, helped ATS Fiji Ltd. to achieve the desired results. Based on this experience, the Association of South Pacific Airlines (ASPA) approached QSL Consultores for assistance in improving business processes and implementing integrated management systems according to IOSA, ISAGO, and ISO standards. QSL Consultores was asked to establish a program to deploy the iAMS methodology at Air Pacific (now Fiji Airways), Air Vanuatu, Aircalin, Air Niugini, Polynesian Airlines, and Solomon Airlines. After a needs assessment, QSL Consultores developed a course with a practical approach, to enable the airlines to develop and implement iAMS. Two courses of 10 days each, based on SMS and iAMS elements and processes, were offered in Nadi, Fiji, to foster the necessary competence. Each course, taught by the same IATA Training and Development Institute (ITDI) accredited instructor, was attended by 25 representatives from participating airlines. After the Fiji courses, offered in December 2012, QSL implemented a pilot project and “on-the-job training” in Port Vila with Air Vanuatu participants. They were able to develop their own management system and prepare the organization for their second IOSA audit. During the 57th ASPA General Session, the participating airlines decided to continue with the project in 2013. Throughout the year, QSL Consultores will be visiting each airline to implement iAMS-compliant processes and management tools. Jose Castellanos Vice-president, Aviation and Tourism Division Back to top SGI Aviation: Airline Guidance for Aircraft Operating Leases Aircraft operating leases represented less than 5% of overall aircraft ownership in the 1980s. But this percentage has continued to grow significantly over the past few years. It is expected that half of all aircraft worldwide will be under either an operating or financing lease in the next decade. A lease allows airlines to add aircraft to its fleet without any ownership risks, introducing much needed flexibility. However, it also presents a series of unique challenges for the airline. It is widely recognized that an aircraft lease, with the associated delivery and redelivery process, can be a cumbersome and time-consuming activity. However, many issues can be resolved by proper preparation and attention to detail. One of the biggest pitfalls for a delivery or redelivery program for any airline is insufficient preparation time or lack of manpower. Delays are extremely costly, as lease contracts impose significant penalties, such as 50% additional or even double rent in the event of a delay in redelivery. Leveraging the correct expertise is of equal importance, as an initial low lease rate may rapidly evaporate against the high cost of a redelivery as a result of delays, regulatory issues, or technical difficulties. Integrating the cost of the entire leasing life cycle into the negotiation process will create clarity and aid in determining which issues have a significant impact during lease negotiations. SGI Aviation, an IATA Strategic Partner, has created guidance material and best practices, so airlines can effectively manage and optimize the lease process. This material was developed under guidance and input from IATA and its members. The document analyzes and makes recommendations for the entire aircraft-leasing life cycle, from the negotiation phase right through to the operations phase, and, ultimately, redelivery. Joost Groenenboom Executive Director, Airlines Back to top New Strategic Partners Since 1990, IATA Strategic Partners have been contributing to IATA and the air transport industry through their involvement in the Strategic Partnerships program.
Posted on: Thu, 20 Jun 2013 10:28:07 +0000