confidential | ©2018 sabre glbl inc. all rights reserved. · a. dpe with dynamic fare adjustment...


Melanie Dezelak

Principal

26 July 2018

GLOBAL TAX DATA MANAGEMENT

ATPCO in the Tax Lifecycle


Evolution of the Industry Tax Solution

Centralized source for automated tax data

GDS/Pricing System Adoption

Agile Processing Solutions

Filing Tax Data with ATPCO

Agenda



2006 ATPCO Tax Workgroup to explore industry centralized solution

2010 Launch of Industry Solution for Ancillary & Ticket Tax Automation

-DXC/HP implementation

2013Amadeus initiates adoption plan for ATPCO Tax solution

2015 Sabre implements ATPCO solution for ancillary taxation

2016Travelport implements ATPCO ancillary taxation solution

2018 Sabre & SITA implement ATPCO ticket tax solution



More than 60 carriers file ancillary tax data with ATPCO, and the number grows each year• Includes taxation on baggage charges, seat fees, and other ancillary revenue products and

services

IATA transitioned the publication of carrier specified amounts (CSA) for airport departure and arrival taxes to ATPCO in January 2015

• Benefit: Data available in the Revenue Accounting Tax Database (RATD Viewer)

“One stop shop” for the filing of carrier tax exceptions and distribution to GDS, OTAs, and pricing systems

• Benefit: Comprehensive tax data for interline settlement purposes

• IATA-TTBS and ATPCO partnership to align tax interpretation across industry distribution channels through the single automated source solution


ATPCO: Single Source of Automated Tax Data

One Place for all your tax data filing needs IATA-TTBS

ANCILLARY & FEE TAXATION CARRIER TAX EXCEPTIONS

CARRIER SPECIFIED AMOUNTS- CSA(Reported to IATA & Automated by ATPCO)

AIRLINE-TERMINAL NOTIFICATION PROCESSFOR

AIRPORT DEPARTURE/ARRIVAL TAXES


ATPCO Tax Data Alignment Processes

One PlaceOne

InterpretationOne Input

Standard

Tax Output

Across

Pricing Systems

Russian Terminal User Charge Notification (RI tax) for ALL carriers operating to/from Moscow

Indian State Registry Notification (K3 tax) for ALL carriers selling India originating travel itineraries

Terminal Tax Notification for ALL airports where departure/arrival/transfer/transit tax rates vary by terminal


Global Adoption of the ATPCO Tax Solution


New Processes to Comply with Tax Legislation

Agile Tax Processing Solutions

Industry aligned turnaround logic for global tax processing

US Tax processing based on TTBS stopover logic versus the traditional fare construction logic

Proration of domestic portion of international travel

Faster Time-to-Market for quickly changing tax legislation requiring new automated capabilities

• 2017-2018: New Indian GST regime (B2B processing in discussion with GDS and pricing systems)

• 2019: Newly announced Japanese departure tax


Carrier “To Do” List

Filing Tax Data with ATPCO

Carrier Exceptions• Based on fare related data, such as ticket designators, fare basis codes (e.g. Staff Tickets, ID

fares)

Carrier Specified Amount (CSA)• First report to IATA, then IATA confirms and reports to ATPCO to issue CSA Notification

Ancillary Tax Data• Including VAT/GST on baggage, seat, meal and other EMDs

Application of VAT/GST for sale on your validating carrier• Notify ATPCO if applies on “fare only” – or – “fare + YQ/YR”

ATPCO-TAX,CUSTOMER EXPERIENCE

[email protected]

Manager: Pablo Londoño-Betancur

[email protected]

DUAL RBD VALIDATION

ATPCO Dynamic Pricing Working Group


Dynamic Pricing Working Group: Background and Focus

PODS* Research Paper: Pricing Mechanisms

Working Group Focus

Dual RBD Validation

Agenda

* Passenger Origin-Destination Simulator (PODS) Research Consortium at MIT


Established 2016

Dynamic Pricing Working Group: Background

PODS* Research Paper

• Advances in Airline Pricing, Revenue Management, and Distribution

Initial Focus: Optimize price points an airline offers along a demand curve

• Dynamic Price Adjustment

• Assortment Optimization (including Dual RBD Validation)

* Passenger Origin-Destination Simulator (PODS) Research Consortium at MIT


ADVANCES IN AIRLINE PRICING, REVENUE MANAGEMENT, AND DISTRIBUTION

Evolution of airline pricing, revenue management, and distribution

Price selection mechanisms

• Assortment Optimization

• Dynamic Price Adjustment

• Continuous Pricing

Next generation mechanisms

• More frequent updating of fare structures

• Dynamic availability of fare

• Additional RBD capabilities

• Dynamic price adjustments (increments or discounts)

• Continuous pricing

• Dynamic offer generation

PODS Research


Common Definitional Framework

Pricing Mechanisms

Assortment Optimization

ContinuousPricing

Dynamic Price Adjustment

More frequent updating of fare structures

Dynamic availability of fare products

Additional RBD capabilities

Continuous Pricing

Dynamic Offer Generation

Dynamic Pricing Engine (DPE)


Optimize Price Points Along a Demand Curve

Dynamic Pricing Working Group: Focus

Dynamic Price Adjustment - Pilots

A. DPE with Dynamic Fare Adjustment (Sabre, Farelogix, ATPCO)

B. DPE with FBR Trigger (PROS and ATPCO)

Refer to ATPCO Dynamic Pricing Working Group at www.atpco.net for further information

Assortment Optimization

Additional RBD Capabilities: Dual RBD Validation

http://www.atpco.net/


Dual RBD Validation

DUAL VALIDATION EXISTS TODAY

Instant upgrade fares

Limited use within cabin for fare brands

INCREASING AVAILABLE PRICEPOINTS WITHIN CURRENT FRAMEWORKS


• Airlines manage fares by reserving a subset of the 26 RBDs for secondary discount RBD validation

• For a fare to price, availability would be required in two booking classes: Class where booking is made (primary) and the secondary availability. Both must be available.

• Allows airline to utilize assortment optimization by first closing the discount secondary RBD(s) while leaving the main RBD open. Then moving to the next main RBD with secondary RBD open, then closing these discount secondary RBDs and so forth.

• Managing this in a one-cabin process theoretically allows for as many as 182 RBD combinations of primary and secondary RBDs. This allow for 156 more assortment options than what exists today in the 26 RBD constraint.

• The number of possible permutations varies based on the number of cabins and prime versus discount RBDs an airline allocates.

• If airline has more than one cabin and does not manage a seamless inventory across cabins the carrier would decide how to divide the 26 RBDs across cabins. The more cabins a carrier has, the fewer the total number of fare levels available

Solution Overview


Dual RBD Validation: Defining the Fare Levels

7 RBDs Available

A, B, C, D, X, Y, Z

Divide into Primary and secondary

Primary: A, B, C, D

Secondary: X, Y, Z

Resulting in 16 fare levels

A, AX, AY, AZ

B, BX, BY, BZ

C, CX, CY, CZ

D, DX, DY, DZ


Dual RBD Validation: Defining the Fare Levels

FARE CLASS PRIMARY RBD DISCOUNT RBD OR RBD PRICE POINTAONE A $500 ATWO A X B $490 ATHREE A Y B $480 AFOUR A Z B $470 BONE B $460 BTWO B X C $450 BTHREE B Y C $440 BFOUR B Z C $430 CONE C $420 CTWO C X D $410 CTHREE C Y D $400 CFOUR C Z D $390 DONE D $380 DTWO D X E $370 DTHREE D Y E $360 DFOUR D Z E $350

Example: Z is closed, A and B are Available

• A, AX, AY, AZ are open (AZ will be open by virtue of the fact a lower “OR” RBD, B, is open)

• B, BX, BY are open

• All C of C and D are closed.


Dual RBD Validation: Inventory and Availability

FARE CLASS PRIMARY RBD DISCOUNT RBD OR RBD PRICE POINTAONE A $500 ATWO A X B $490 ATHREE A Y B $480 AFOUR A Z B $470 BONE B $460 BTWO B X C $450 BTHREE B Y C $440 BFOUR B Z C $430 CONE C $420 CTWO C X D $410 CTHREE C Y D $400 CFOUR C Z D $390 DONE D $380 DTWO D X E $370 DTHREE D Y E $360 DFOUR D Z E $350

Example: Airline wants to set the rate at $400.

• System makes available seats for RBDs A, B, C as well as X and Y, to ensure discounted C fare classes are available.

• Airline needs an availability response from XXX to YYY where we want to sell two more seats at the CTHREE, four at the

CTWO and six at the CONE levels, as follows: XX 123 A9 B9 C6 D0 X4 Y2 Z0 XXXYYY 312P 743P

NOTE: AFOUR and BFOUR are available since A and B are available, and B and C are available. Z does not need to

available since a lower prime RBD is available.


Implementation Guide

Fare Management and Decision Support

Content Creation, Collection and Distribution

Pricing and Distribution (Direct and Indirect)

Revenue Accounting and Audit

Support Services (Contact Centers/Airports)

Implementation Launch and AssessStrategy and Planning

Under final review


Assumptions and Pre-Conditions

• Shopping/Pricing/Order Management systems capable of Dual RBD validation

• Inventory management systems support additional price points and can determine RBD availability based upon the proposed structures

• A hierarchical fare structure is implemented and Dual RBD validation provides the opportunity to create intermediate fare levels within an RBD

Identification of Stakeholders

• Lifecycle processes

Impact Analysis and Scope

• Codeshare and interline, markets, cabin, fare type, etc.

Strategy and Planning


Sample Use Case Layer 1

Carrier uses five Primary RBDs (M, H, Q, K, V) and one Secondary RBD (X)Results in 10 fare levels using these 6 RBDs

Fare

Class Primary RBD Secondary RBDMFULL M

MLOW M X

HFULL H

HLOW H X

QFULL Q

QLOW Q X

KFULL K

KLOW K X

VFULL V

VLOW V X

A Fare Class would be available if the Primary RBD is available as well as the Secondary RBD ,where specified.

Example: QLOW would be available only if Q and X were both available



Sample Use Case Layer 2

A Primary RBD higher than the lowest available Primary RBD is booked (for example, to gain features that are only allowed with a higher RBD). The RBDs should be considered hierarchal and the data can be created to support the lower level fare of the higher RBD.

Example: M, H, Q, K are all availableV and X are not available

A segment booked in Q would price QLOW (even though X is zero) because K was available

Fare Class Primary RBD Secondary RBDMFULL M

MLOW M X or H

HFULL H

HLOW H X or Q

QFULL Q

QLOW Q X or K

KFULL K

KLOW K X or V

VFULL V

VLOW V X



Sample Use Case Layer 2 (cont.)

Bid price is $600. Return M, H, Q, K as available and have V and X closed.

If KFULL is not selected, QLOW could be considered because Q was available and K is available as well

Fare

Class Fare

Primary

RBD

Secondary

RBD ResultMFULL $900 M Books in M

MLOW $850 M X or H Books in M when X or H are available

HFULL $800 H Books in H

HLOW $750 H X or Q Books in H when X or Q are available

QFULL $700 Q Books in Q

QLOW $650 Q X or K Books in Q when X or K are available

KFULL $600 K Books in K

KLOW $550 K X or V Books in K when X or V is available

VFULL $500 V Books in V

VLOW $450 V X Books in V when X is available



Implementation

Schedules No changes

Inventory Set-up and Management

Primary and secondary RBDs as inventory is decremented

Inventory Allocation and Forecasting

• Determination how inventory is to be allocated between Secondary RBDs• Forecasting impact of multiple price points and how to allocate inventory to the

secondary RBD

Availability Messaging No changes

Inventory Systems Identify inventory system modifications required to manage the opening and closing of primary and secondary RBDs to communicate the value that will be received with the sale of the segment/segments requested.

Revenue Accounting and Audit

Uses booked RBD as well as the fare basis code on each coupon to drive their respective processes. No changes are anticipated to these processes as they correctly process today with existing dual validation

Voluntary Changes Systems must be able to determine primary booked RBD but also any secondary RBD that would have been available based on the RBD requirements of the fare being processed


RBD Chart 1 Restriction Tags

Fares and RulesImplementation

B If RBD1 is Available then

RBD2 is Permitted

D If RBD1 is Available then

RBD2 Required

N No RBD Applies

Fare by Rule (Category 25) Target = Nov 2018

Example: QLOW FareValue B: Secondary validation of availability of K allowing booking into QValue D: Secondary validation of availability of X requiring booking into QValue N: If neither X nor K is available “N” specifies the fare will fail validation


Last Seat AvailabilityImplementation

Itinerary pricing after sell prices higher than expected

Itinerary pricing after the sell prices lower than the airline intended

Scenario A Scenario B

Example Example

Coordinate with system providers to ensure that shopping and pricing requests are aligned. Potential impact on the booking process (Direct and Indirect) that will need to be addressed


Launch and Assess

Documentation and Training

Implementation and roll-out

(staged)

Communication (impacted channels)

Assessment


Airline Implementation

One in production

One in test

Many in research


Dynamic Pricing Working Group

• White paper on Dual RBD validation

• Implementation Guide (pending)

• Agendas

• Summary reports

www.atpco.net

Resources


VOLUNTARY CHANGES AND REFUNDS

Categories 31 and 33


Agenda

Voluntary Changes and Refunds Working Group

• Summary report of April 2018 agenda items

• Roadmap


Category 31 and Category 33


These categories automate change and refund processing based on airline business requirements

Evolving industry needs result in multiple new requests from Airlines and Systems for enhancements or processing clarifications

April 2018 meeting: Discuss new requirements and potential solutions


Requirement Update

No Show: Establish a charge/penalty for no show. • Proposal to add a new Table (in both categories)

to house the charges/penalties as well as “No

Show” charges and higher/lower/both

• New match element in both categories to dictate

table applies to no show situations

• Agreed on No Show definition

• Present solution at future webinar or meeting

Cancel Penalty: New methods of determining a

cancellation penalty when the ticket contains multiple

fare components (e.g. combination of 100%-

nonrefundable and refundable)

• New element and values discussed e.g. process

all as per fare component vs. apply the highest

penalty, etc.

• Carrier intent unclear, ATPCO to contact requestor

First Coupon: Add functionality to indicate changes

are required to the first coupon (supports 017f for

unused tickets with a change to the first flight coupon,

current fares must be used)

• Add new value to Reissue Table 988 First

Coupon/Fare component (byte 24)

• Pending Milestone 2/3 issuance

Working Group Summary


Requirement Update

RBD Hierarchy: Revise Category 33 data application

to add current logic contained in Category 31 for RBD

revalidation. This includes logic for building a dynamic

hierarchy, processing the hierarchy, and using RBD

Answer Tables for RBD validation

• ATPCO to create examples for review

• Discuss intent of current data (byte 93) for same or

equal/higher RBD.

• Pending discussion at the next working group

Public/Private Reprice Fare: Align category options

for restricting/permitting the use of private or public

fares when repricing the itinerary. Category 31 Exclude Public/Private Ind. (byte 111)

Category 33 Include Private Ind.(byte 67)

• Possible proposal for new default: public to public,

private to private

• Would required data application change and

database conversion

• ATPCO to revise examples for review and

research possible implementation plan

Advance Purchase: Revise (Category 5) validation

logic when different values exist for fares within the

same pricing unit for different carriers (to be same as

exists for “same carrier”)

• Proposal: Apply the most restrictive value (latest

“From” measurement point)




Requirement Update

Reissue vs. Exchange: Continue discussing

suggested data application clarifications along with

possibly limiting scope of redefining Tags

• ATPCO to revise the proposed definitions

• Working group participants to review the proposed

coding recommendations for Resolution 017f

• ATPCO to analyze and work to retire the use of the

mixed process tags

• ATPCO to revise process tags descriptions to

relate to reissue vs. exchange where applicable.


Current vs. No Fare Change: Reach agreement on

how to resolve a combination of the following

category 31 data in a single reprice scenario where

the entire itinerary must be repriced using current

fares but a fare component specifies changes to the

flight and fare are not permitted (Change Ind byte 50)

• ATPCO will update data application with examples

illustrating pass versus fail conditions.

• ATPCO to review current usage and intent

• Pending discussion at the next working group



Requirement Update

Dual RBD Validation: Define the validation when

selecting reprice fares for unflown, unchanged fare

components.

• Proposal: When repricing an unflown, unchanged

fare component by keeping the fare, automatically

pass RBD requirements for the fare.


MCO to EMD: In the Form of Refund options, amend

current reference to Miscellaneous Charge

Order (MCO) to be Electronic Miscellaneous

Document (EMD)

• Working group approved the proposed changes to

subscription documentation and user interface


IF to Cat 15: Revise Sales Restriction (Category 15)

application when used as a Conditional (IF) to

indicate the data validates against the reissue

location as opposed to the original sales location

• Working group agreed in concept

• ATPCO will present this as an agenda item at the

next working group meeting



Requirement Update

Ticket Validity: Provide functionality to indicate a

carrier-specific ticket validity definition.


• ATPCO will survey carriers and present this as an

agenda item at the next working group meeting

Penalty > Fare: Clarify that if a penalty/fee is more

than the base fare, systems should apply the

penalty/fee only up to the base fare.


• ATPCO will present this as an agenda item at the

next working group meeting

Task Force to define Voluntary Changes and Refunds

on Taxes and Fees

• Ongoing



2018 Roadmap


2019 Roadmap


2020 Roadmap


Resources


• Agendas

• Summary reports

• Upcoming meetings and webinars

www.atpco.net


ATPCO PRODUCTS AND SOLUTIONS

Melanie Dezelak [email protected]

mailto:[email protected]

confidential | ©2018 sabre glbl inc. all rights reserved. · a. dpe with dynamic fare adjustment...

Documents