SIS Passenger Rejection Analysis ACH (Jan – Mar 2017) Created By: SIS Operations Team Date: 17 May 2017 Distributed to: ACH Passenger Rejection Analysis 1 / 12 IATA CONFIDENTIAL Table of contents 1. Global Rejection Analysis .................................................................................................................................................................. 4 2. Non-Sampling Analysis ...................................................................................................................................................................... 7 3. Non Sampling Analysis: FIMs............................................................................................................................................................. 9 4. Sampling Billing Analysis ................................................................................................................................................................... 9 5. Glossary ........................................................................................................................................................................................... 10 6. Annex 1. Passenger Source Codes Table ......................................................................................................................................... 11 Passenger Rejection Analysis 2 / 12 IATA CONFIDENTIAL 1. Estimated percentage of prime billings rejected The chart below illustrates the trend of estimated percentage of rejected prime billings. Each month the percentage is recalculated by diving the sum of 1st stage rejections of the previous 12 months by the sum of prime billings for the same period of time (formula shown below). The graph is based on data from billing months January 2015 to March 2017. 𝑺𝒖𝒎 𝒐𝒇 𝑺𝒕𝒂𝒈𝒆 𝟏 𝑹𝑴𝒔 𝒐𝒇 𝒑𝒂𝒔𝒕 𝟏𝟐 𝒎𝒐𝒏𝒕𝒉𝒔 𝑬𝒔𝒕𝒊𝒎𝒂𝒕𝒆𝒅 % 𝒐𝒇 𝒓𝒆𝒋𝒆𝒄𝒕𝒆𝒅 𝒑𝒓𝒊𝒎𝒆 𝒃𝒊𝒍𝒍𝒊𝒏𝒈𝒔 = ×𝟏𝟎𝟎% 𝑺𝒖𝒎 𝒐𝒇 𝑷𝒓𝒊𝒎𝒆 𝑩𝒊𝒍𝒍𝒊𝒏𝒈𝒔 𝒐𝒇 𝒑𝒂𝒔𝒕 𝟏𝟐 𝒎𝒐𝒏𝒕𝒉𝒔 Note: This report includes only SMI-A data (Settlement through ACH using ACH rules) Passenger Rejection Analysis 3 / 12 IATA CONFIDENTIAL 1. Global Rejection Analysis Total Rejection Memo Count by Month  Graph based on rejection memo counts of all stages.  In comparison to the base year 2015, the average monthly rejection memo count has decreased by 43%.  The spike in March 2017 is mainly due to an increase in 2nd stage rejection memo counts. Total Rejection Memo Count and Value by Month Jan 2017 Feb 2017 Mar 2017 Total RM Count 32,123 31,508 37,852 101,483 USD Amount $ 2.02 $ 1.95 $ 2.21 $ 6.18 (Mill)  In comparison to Q1 2016 (Jan - Mar 2016), the total rejection memo count in 2017 has decreased by 21%, while the total amount has decreased by 33%.   Passenger Rejection Analysis 4 / 12 IATA CONFIDENTIAL Average Rejection Memo Count by Stage  In comparison to the base year 2015, the average stage 1 rejection memo count per month has decreased by 48%, 2nd stage has decreased by 36% and 3rd stage by 1%. Total Rejection Memo Count and Value Comparison - Split by Stage - Q1 2017 vs Q1 2016 RM USD Amount RM USD Amount RM Count RM Count Stage (Mill) (Mill) Jan - Mar 2017 Jan - Mar 2016 Jan - Mar 2017 Jan - Mar 2016 Stage 1 66,136 78,445 $ 3.88 $ 5.89 Stage 2 27,095 40,940 $ 1.67 $ 2.60 Stage 3 8,252 8,750 $ 0.63 $ 0.79 Total 101,483 128,135 $ 6.18 $ 9.29 Passenger Rejection Analysis 5 / 12 IATA CONFIDENTIAL Total Rejection Memo Count - Split by Quarter 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 - Q1(15) Q2(15) Q3(15) Q4(15) Q1(16) Q2(16) Q3(16) Q4(16) Q1(17) STG1 STG2 STG3 Passenger Rejection Analysis 6 / 12 IATA CONFIDENTIAL 2. Non-Sampling Analysis Total Rejection Memo Count by Stage - Q1 2017 vs Q1 2016 Q1 1st Stage 2nd Stage 3rd Stage RM Count Jan - Mar 2017 66,136 66% 26,405 26% 8,059 8% 100,600 Jan - Mar 2016 78,445 62% 39,759 31% 8,508 7% 126,712  In Comparison to Q1 2016, there has been a decrease in the number of non-sampling rejection memos in all three stages. In total, the non-sampling rejection memo count has decreased by 21%. Reason Code breakup as per monthly Rejection Memo Count Reason Reason Description 1st Stage 1st Stage Percentage Code Count and Percentage Count and Percentage change Jan - Mar 2017 Jan - Mar 2016 2017 vs 2016 1B Fare Reclaim 39,241 59% 47,979 61% -18% 1G Tax Reclaim 11,654 18% 18,304 23% -36% 1A* Fare/Tax/ISC 11,225 17% 5,004 6% 124% 1C ISC Reclaim 1,986 3% 2,263 3% -12% 2B Duplicate Billing 709 1% 2,319 3% -69% 5Z Others 610 1% 971 1% -37% Other Commission 1D 184 0% 77 0% 139% Reclaim Other codes 527 1% 1,528 2% -66% Total 66,136 78,445 -16%  Top 7 reason codes sorted as per 2017 counts Reason Reason Description 2nd Stage 2nd Stage Percentage Code Count and Percentage Count and Percentage change Jan - Mar 2017 Jan - Mar 2016 2017 vs 2016 1B Fare Reclaim 18,890 72% 32,091 81% -41% 1A* Fare/Tax/ISC 3,221 12% 685 2% 370% 1G Tax Reclaim 3,087 12% 3,608 9% -14% 1C ISC Reclaim 847 3% 2,157 5% -61% 2B Duplicate Billing 115 0% 239 1% -52% 5Z Others 103 0% 699 2% -85% 2F Void Coupon Billing 57 0% 11 0% 418% Other codes 85 0% 269 1% -68% Total 26,405 39,759 -34%  Top 7 reason codes sorted as per 2017 counts Passenger Rejection Analysis 7 / 12 IATA CONFIDENTIAL Reason Reason Description 3rd Stage 3rd Stage Percentage Code Count and Percentage Count and Percentage change Jan - Mar 2017 Jan - Mar 2016 2017 vs 2016 1B Fare Reclaim 5,383 67% 6,515 77% -17% 1A* Fare/Tax/ISC 1,110 14% 499 6% 122% 1G Tax Reclaim 1,050 13% 1,177 14% -11% 1C ISC Reclaim 384 5% 175 2% 119% 5Z Others 57 1% 66 1% -14% 2B Duplicate Billing 45 1% 35 0% 29% 2F Void Coupon Billing 9 0% 0 0% Other codes 21 0% 41 0% -49% Total 8,059 8,508 -5%  Top 7 reason codes sorted as per 2017 counts *Note: Reason code 1A is being misused as a default code. Due to this misuse, the counts of 1A were split into the correct reason codes. For example, a rejection memo which has only a difference of fare but with reason code 1A will be included in the 1B count. Passenger Rejection Analysis 8 / 12 IATA CONFIDENTIAL 3. Non Sampling Analysis: FIMs Prime Billing Count by Month  The graph shows a decrease in FIM prime billings starting towards the end of 2015 due to the IATA Paper Out project to eliminate all paper documents. FIMs Rejection Memo Count - Q1 2017 vs Q1 2016 SRCD 44 SRCD 45 SRCD 46 Total Jan - Mar 2017 109 72 22 203 Jan - Mar 2016 960 216 43 1,219 4. Sampling Billing Analysis Monthly Count - Q1 2017 vs Q1 2016 Form A/B Form D/E Form F Form XF Count Count Count Count Jan - Mar 2017 2,681,557 15,339 690 193 Jan - Mar 2016 3,912,825 17,284 1,181 242 % change -31% -11% -42% -20% Passenger Rejection Analysis 9 / 12 IATA CONFIDENTIAL 5. Glossary Term Definition ACH Airlines Clearing House. It is the A4A’s Clearing House for Interline Billings BM Billing Memo IBSOPS WG Interline Billing and Settlement Operation working group ICH IATA Clearing House ISC Interline Service Charge RAM IATA Revenue Accounting Manual RM Rejection Memo Settlement Method Indicator - In SIS it indicates the clearing house to be used for settlement as well as the Revenue Accounting rules to be followed SMI - I – settlement through the ICH using the RAM rules SMI SMI - M – Inter clearance settlement of a billing from an ACH member to an ICH member using RAM rules. It could also be a billing from an ACH member to another ACH member using RAM rules SMI - A – Settlement through the ACH using ACH rules SMI - B – Bilateral settlement using RAM rules SIS Simplified Invoicing and Settlement SIS SG The SIS Steering Group that overlooks the governance of SIS SRCD Source Code UATP Universal Air Travel plan Passenger Rejection Analysis 10 / 12 IATA CONFIDENTIAL