Diving into Airlines - The Association · 2017. 10. 11. · IAG - Not only Airlines: IAG Cargo, Avios, IAG GBS (Q4 2014), subsidiaries Hub – based flight schedule model 2016 numbers:
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Piotr BobulaIAG GBS
Credit Matters VI – The Deep Dive
Diving into Airlines
Diving into AirlinesAirline industry work under regulations of The International Air Transport
Association (IATA, 83 %) and regional agreements
IATA assures settlement and risk management tools
Carriers measure capacity by ASK and fight for Revenue per ASK (RASK)
Airlines create alliances (One World, Star Alliance) and Groups
Low-cost or New Generation Carriers (NGC) are growing
International (Consolidated) Airlines Group = IAG was funded in 2010
Care & Carry
A (big) Question
What airlines are part of IAG?
a) British Airways, Iberia, Aer Lingus, Iberia Express, Vueling, IAG Cargo
b) BOAC, Iberia, Iberia Express, Vueling, Level, Aer Lingus, Alitalia
c) British Airways, Iberia, Aer Lingus, Iberia Express, Vueling, Level
d) British Airways, Iberia, Aer Lingus, Qatar, Iberia Express, Vueling, Level
Care & Carry
IAG - Not only Airlines: IAG Cargo, Avios, IAG GBS (Q4 2014), subsidiaries
Hub – based flight schedule model
2016 numbers: +100 M passengers flown to 279 destinations on 548 aircraft
2017: IAG started long-haul NGC (low-cost) LEVEL …and a new trend
… Group RASK for 2016: 7.56 for 298,431 ASK
Numbers and facts
Care & Carry
Top 50 EU companies as at Dec.2015Data supplied by Bureau van Dijk
ReceivablesEur th
Sales Eur th
EBITDA Eur th
Employees
Airlines 29,072,735 148,767,019 34,924,115 594,651
Pharma. & Medical Dev. 63,069,485 329,313,010 86,038,384 893,823
FMCG 11,193,047 137,249,593 9,252,732 275,462
Automotive 70,066,731 1,149,270,725 101,517,725 2,814,514
Total 173,401,998 176,460,0347 231,732,956 4,578,450
Comparing European Verticals
Care & Carry
Major Challenges
Acting at a thin profit margin and high risk our industry is facing:
- Dynamic political situation (government as one of major partners)
- Terrorism (absolute need to secure passengers and cargo)
- Fuel pricing
- Law changes (e.g. EU directives on Passenger Compensation) - High competition and push for cost reduction (Low-cost carriers)
- Exchange rates and fraud attempts
Care & Carry
Bringing value
By 2 facts - of being setup set up and set up here IAG GBS is bringing:
Talents from a developed corporate labour market
Cost savings by consolidation and efficiencies
Change of thinking – aligned with New Generation members of the Group
Seamless process from ticket booking until flow or compensatedQuick reaction to ad hoc challenges
Proof that GBS can be focused on high-value activities and absorb key roles
Care & Carry
Airline industry AR structure
Revenue (Sales) Accounting processFuture sales reportingGSA and GHA as intermediaryTravel Agents and businesses
IATA ICH-BSP-CASS
Credit Card sales
Non-IATA
agents
Receivables
Pax Revenue Accounting
Cargo Revenue Accounting
Engineering / MRO
* Revenue recognition => Billing
IATA Clearing House (ICH) for InterlineBSP and ARC for Pax CASS and CNS for CargoNon-IATA and Credit Cards
* G S A a n d G H A
*
Settlement and Risk Management
Care & Carry
Collection Tips
3 tips from IAG GBS on Sales Ledger / Debt Management
USE the technology / tools you have – no excuse if these bring no stability (!)
Act proactively to be able to react when needed (structure above all)
Work with your Sales teams – you are to secure the same sales and the world is your
area
Care & Carry
Re-Act ! Case study 1
Top European sports team going for their game in the finals
Weekend flight cancelled in one of IAG hubs
Clear prestige / PR case
GBS mobilize Procurement, PtP * and TreasuryCharter organized (contract, payment)
Double - victory
* aka ‘The Dark Side’ Care & Carry
Re-Act ! Case study 2
Recently 2nd biggest German airline filed for bankruptcy
Alert raised by one OpCo and channelled through GBS
C2C team checked ICH and other balances on in-scope airlines
Customer Master / Credit Block applied immediately
Early warning sent to other Group airlinesAll internal teams advised to check pending billing (revenue recognition)
Review further potential impact on Receivables (current risk, legal procedure)
Care & Carry
A (big) Question part 2What will be on your mind during your next air travel? (control question)
a) Tight conditions in managing airline business
b) Your travel schedule and planned holidays
c) How GBS can add value to the business in airlines
d) Difference between Low-Cost (NGC) and Full-Service
Care & Carry
Any questions?
Piotr BobulaIAG GBSTelephone: +48 512898369, +48 795510054E-mail: piotr.bobula@iaggbs.com
Thank youSource data supplied by
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