Accelya Solutions India Ltd Management Discussions.


For the global airline industry, there was strong passenger demand and robust financial performance amidst rising cost and profitability pressures in the last year.

On the demand side, air travel was accessible for more people with worldwide air passenger numbers exceeding 4.3 billion and industry-wide revenue passenger kilometers (RPS) increasing by 7.4%. Air freight too grew slightly - freight tonne kilometers (FTK) grew by 3.4% but nowhere near the 9.7% growth seen in 2017. This was in line with the global trade volumes which got impacted especially during the second half of the year.

For calendar year 2018, airlines made a net profit of USD 30 billion on an operating margin of 5.8%. This meant the industry-wide return on capital for the airline industry was 8% and was still above the average cost of capital that stood at 7.3%.

The International Air Transport Association (IATA) has made the following forecast for the airline industry in 2019:

• Total passenger numbers are expected to rise to 4.6 billion up from 4.3 billion in 2018

• Cargo demand growth is anticipated to be flat with volumes of 63.1 million tonnes compared to 63.3 million tonnes in 2018

• Overall costs are expected to grow by 7.4% to USD 822 billion outpacing a 6.5% rise in revenues of USD 865 billion. As a result, net margins are expected to go to 3.2% from 3.7% in 2018

• The global air transport industry is expected to record profits of USD 28 billion that represents a decline from USD 30 billion estimated profit for 2018. Similarly, Profit per passenger is expected to decline to $6.12 from $6.85 in 2018

The airline industry will see lower margins owing to factors such as labor, fuel and infrastructure. Deteriorating business environment with trade wars will add more pressure on the margins. However, the good news is that airlines seem to have broken the boom-and-bust cycle and developed the skill where adverse trade environment no longer plunges the industry into deep crisis. Airlines will continue to be profitable.

Source: The International Air Transport Association (IATA)


Accelya is a leading provider of technology products and services to the travel and transport industry.

Accelya partners with airlines right from the time a ticket or an air waybill is issued, all the way through its entire life cycle, until the data is converted into actionable decision support. Accelyas expertise spans across Financial Solutions, Commercial Solutions, Industry Solutions and Cargo Solutions that cover mission critical airline processes.

As a strategy, Accelya is constantly scanning the airline ecosystem and upgrading itself to stay relevant to its customers and be ahead of the competition. During the year, Accelyas strategic focus has especially been on:

Consolidating and Strengthening the Solution Portfolio

Accelya services over 275+ airline customers across the globe. As a result, it is able to leverage the huge amount of data to provide commercial insights to its customers.

Accelya is looking at integrating and strengthening its solutions for enhanced customer experience. It provides bundled financial solutions to airline CFOs so that they get a 360 vision of their financial processes across the book-to-cash and procure-to-pay lifecycles. It recently launched the Accelya Payment Gateway, a platform powered by Mastercard, that offers global payment acceptance for airlines.

The commercial departments of airlines need to be more innovative in managing their business functions and by looking at the two important pillars of demand and channel management. To facilitate this, Accelya provides its commercial solutions that let airlines manage effectively their distribution channels and leverage the opportunities arising from the evolving marketplace, distribution landscape and business models.

Accelya partners with IATA on industry-wide initiatives and provides strategic solutions include BSP processing, BSPlink, Neutral Fare Proration (NFP) and Simplified Interline Settlement (SIS).

During the last year, Accelya forged stronger ties with IATA to have Global Net Remit 5 (NR5), an upfront agency incentive management service by Accelya, available in all IATA BSP countries.

Accelya leverages a digital cargo platform for air cargo carriers to optimize their operations commercially and operationally. The carriers can scale at unprecedented speeds and connect every aspect of their air cargo value chain from planning to accounting.

Keeping Pace with Technology

Accelya leverages modern technology to deliver greater impact to its customers. For instance, Accelya has upgraded its solutions with Artificial Intelligence and Robotics to bring in automation and improve process efficiencies for airlines.

Being Ready for the Evolving Distribution Landscape

IATA is currently working on NDC and ONE Order initiatives which will impact the airline distribution landscape and hence, airline processes. Accelya has been actively participating in NDC and ONE Order forums and has representatives on IATA working groups to assess airline impact and identify opportunities for all its solutions. Today, Accelyas accounting solutions are NDC and One Order ready and capable of handling customer processes in the new distribution world. The Group continues to work towards having all its solutions ready for any future business impact.

Accelyas Business Model

Accelyas strength lies in its unique business model where platforms are offered on a hosted environment; along with "Service Cubes" which are optional services provided through Accelya Managed Services (AMS) centers. Customers can also choose to fully outsource their business processes to Accelya.

Accelyas pay-per-use business model further helps airlines avoid upfront capital investments and releases cash flow for other priorities. It also provides Accelya with annuity revenue streams ensuring forward revenue visibility.


The Company continues to strengthen and consolidate its key solution areas - Financial Solutions and Industry Solutions. Financial Solutions

The airline CFO function is no longer a back-end job producing and sharing data. It has become a front-end decisionmaking job. CFOs are already in the cockpit of their organizations! Therefore, the need of the hour for the CFOs is to leverage data and automation, and to have the right tools to harness the power of data in their own airline.

Accelya Solutions provides bundled financial solutions to the airline CFOs so that they get a 360 vision of their financial processes across the book-to-cash and procure-to-pay lifecycles. This enables them to leverage the huge amounts of rich data in their processes and identify and stop any leakages.

The Company is able to do so by being a trusted advisor to airline CFOs and impacting the key airline finance pillars of revenue, cost and profitability.

Accelya Solutions partners with airlines to ensure accurate revenue declaration and control including plugging revenue leakages and improving the quality of revenue, better manage cost, risk, cash flow, profitability and overall business performance. The key solutions in this portfolio are Revenue Accounting, Revenue Assurance and Cost Management.

Revenue Accounting and Assurance: Revenue Accounting is a complex business process in an airline as it is responsible for accurate and timely revenue declaration, ensuring interline payments are billed correctly and all audit compliances are adhered with. In addition, crucial strategic decisions are made using revenue accounting data in an airline.

With over 25 years of experience and a leadership position in revenue accounting, the Company enables leading global airlines to streamline and simplify their revenue accounting processes.

During the year, the Company successfully migrated many of its customers to the recently launched Version 20 of its Revenue Accounting Solution. The current strategy of the solution includes focus on data analytics capability, automation through artificial intelligence, being future ready for business and industry changes, and of course, completing migration of customers to Version 20.

The Company also launched its India GST solution as a part of its tax management services. This is now used by 7 airlines.

Moving over to Accelya Solutions Revenue Assurance Services. This portfolio covers a wide gamut of audit services spanning the entire ticket lifecycle from original booking through to the completion of the journey. This is supported by comprehensive recovery services — from raising of Agent Debit Memos (ADMs) to fund collection. The services include BIDT Audit and Sales Audit.

Cost Management: Accelya Solutions Cost Management Solutions enable airlines to manage their costs more smartly. It automates the payables process, provides deeper insights into the costs, and facilitates wiser, more profitable decisions every day. As a result, airlines can control supplier overpayments and transform their procure-to-pay cycle. During the year, the Company integrated a robotics engine into its cost management suite to increase process automation in the accounts payable process.

Flight Profitability: The third pillar of airline finance is profitability. The Company has access to huge amounts of revenue and cost data. Coupled with the expertise in airline finance processes, it is in a unique position to provide airlines with a Flight Profitability Solution. The solution is offered as an analytical tool which accurately assigns measures and analyses costs and revenues to report flight profitability.

Industry Partnerships

Accelya Solutions partners with industry bodies to provide strategic solutions that simplify airline processes.

• The Company is providing high quality support to IATAs Simplified Invoicing Settlement (SIS) platform so as to meet quality, system and information security standards as expected by IATA.

• NFP (Neutral Fare Proration) and First & Final under ATPCOs RASS (Revenue Accounting Settlement Services) are powered by Accelya Solutions industry recognized APEX Proration Engine


Throughout the year, the Company has continued to invest in and has seen good traction across its solution portfolio. Some of the key updates include:

• The Company successfully rolled out the new version 20 of its revenue accounting solution to more customers.

• The Companys revenue accounting solutions are NDC and One Order ready. IATA certified the Company as:

o Supporting NDC, for the second year in a row.

o A One Order capable accounting provider.

• The Companys India GST solution continued to be a success. It is a part of the Companys tax management services. Having added more customers during the year, there are over 7 airlines using this service today.

• During the year, the Company integrated a robotics engine into its cost management suite to increase process automation in the accounts payable process. This solution has been successfully deployed at a large European airline.

Accelya Solutions to Consolidate its Offices in Mumbai, India

Currently, the Company has offices spread across 3 locations in Mumbai. The Company has been occupying these premises for over ten years and felt that an upgrade was needed. As a result, it has started the process to consolidate all offices into new office premises at 24x7 Park, Vikhroli, Mumbai, which will be operational in the seccond quarter of F20. The Companys focus is to create these premises in line with international workplace standards that is modern, encourages open culture and enhances employee experience and productivity.


Business Focus, Expertise and Continuous Investment in Products and Services

The Company commands a significant advantage in terms of business domain knowledge and emerging industry changes. Years of experience have provided the Company with a strong base of Intellectual Property and Intellectual Capital. It is seen as a trusted advisor to airlines. The Company is in a unique position to impact the complete book-to-cash and procure-to-pay cycles of airlines.

Keeping up with Technology

The Company is constantly embracing new technology developments to stay relevant for its customers. Its latest investments have been towards building artificial intelligence and machine learning capabilities in its financial solutions. The Companys cost management solution is already integrated with robotics and is impacting efficiency for its customers.

Neutral Service Provider

Accelya Solutions is a neutral service provider and is not governed by any competing airlines. The Companys platforms and processes are independent of any airline or GDS. Confidentiality and security of customer data are of utmost importance to the Company.

Data Protection

The Company takes data privacy very seriously and has relevant controls and compliances in place including PCI DSS 3.2 and ISO 27001: 2015. All of the Companys products and services meet the new privacy standards as per the EU General Data Protection Regulation (GDPR) regulations.

Single Vendor Accountability

Accelya Solutions has pioneered the concept of platform-based managed services in the airline industry. The Company takes complete accountability of the outcome as per the Service Level Agreements (SLAs). It also takes the responsibility for maintaining and upgrading the platform, processes and people skills in line with industry best practices and client requirements.

Relationship with Customers

Accelya Solutions values long-term relationship with its customers. The ability to forge effective and lasting partnerships with large, global airlines is the Companys strength. Over the years, Accelya Solutions airline customers have extended their association with the Company.

Pay-as-you-use Model

Accelya Solutions offers its solutions on a pay-per-use model. It enables airlines to have a low capex and variable costs. At the same time, this model ensures the Company annuity revenue streams resulting in revenue visibility and foundation for growth. A win-win for customers and the Company.

Ready for the Evolving Airline Distribution Landscape

Accelya Solutions welcomes and is aligned with the upcoming industry changes with respect to IATAs NDC and One Order initiatives. The Companys accounting solution is already certified by IATA as being NDC and One Order capable, and is ready to handle the distribution landscape of the future.

Financial Analysis

Shareholders funds

Shareholders funds increased from 1,738.75 million to 1,904.53 million during the year 2018-19.


During the year, Share Capital and Securities Premium stand at 149.27 million and 316.98 million respectively. Presently, Accelya Solutions has 14,926,261 shares (Previous Year 14,926,261) of 10 each fully paid up.

Profit and Loss Account

Accelya Solutions retained earnings as at June 30, 2019 amount to 1,189.59 million. The Board has recommended a final dividend of 15 per share for the financial year 2018-19 at the Board Meeting held on 28th August, 2019.

As at 30th June, 2019, Accelya Solutions book value per share increased to 127.60 per share as compared to 116.49 per share as at 30th June, 2018.

General Reserves Account

During the year, General Reserve stands at 239.15 million. There is no change to this balance in the current year. Capital Redemption Reserve

During the year, Capital redemption Reserve stands at 9.54 million. There is no change to this balance in the current year.


Accelya Solutions Investments at cost, as at 30th June, 2019 stands at 474.15 million. There is no change to this balance in the current year.

Fixed Assets

Accelya Solutions Gross Block as at June 30, 2019 stood at ^ 1,682.23 million as compared to ^ 1,561.15 million as at June 30, 2018. The corresponding Net Block as at June 30, 2019 is R 427.33 million as compared to R 403.40 million as at June 30, 2018.

Product Development

During the year, product development cost amounting to 105.70 million has been capitalised as intangible assets. Other Fixed Assets

Accelya Solutions added ^ 90.23 million to the gross block comprising of ^ 79.98 million in Plant and Machinery, ^ 9.76 million in purchase of Software, and the balance ^ 0.49 million in other assets.

Sale / Disposal of Assets

During the year, Accelya Solutions sold/ disposed off assets with a Gross Book value of ^ 74.85 million and a depreciated Net Value of ^ 69.66 million. The sold assets included old plant & machinery and vehicle.

Trades Receivables

Accelya Solutions Net Receivables as at June 30, 2019 amounted to ^ 745.64 million as compared to ^ 523.36 million as at June 30, 2018. These debtors are considered good and realizable.

The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors which could affect the customers ability to settle and finally depending on the managements perception of the risk. The total provision for doubtful debts as at 30th June 2019 stands at R 14.99 million compared to R 14.43 million as at 30th June, 2018.

Trade receivables as a percentage of total revenue is 18.86% as at 30th June 2019 as against 14.52% as at 30th June, 2018. Non-current Liabilities

As at 30th June, 2019 Accelya Solutions non-current liabilities amount to ^ 41.62 million as compared to ^ 68.44 million as at 30th June, 2018.

Current Liabilities

As at 30th June, 2019 Accelya Solutions current liabilities amount to ^ 571.97 million as compared to ^ 608.46 million as at 30th June, 2018.

Result of Operations

Sale of services

For the year ended 30th June, 2019, Accelya Solutions recorded operating income of ^ 3,784.77 million.

Operating Profit

Accelya Solutions reported profit before exceptional items and tax of ^ 1,560.11 million for the year ended 30th June, 2019.

Profit after Tax

Accelya Solutions recorded a PAT of ^ 1,038.49 million for the year ended 30th June, 2019.


Accelya Solutions recommended a final dividend of ^ 15 per share amounting to ^ 269.92 million (including Dividend Distribution Tax R 46.02 million).

IPR Assets and Amortisation

As a value innovator, Accelya Solutions has always believed in developing its own Intellectual Property (IP) and over the years has invested significant amount of resources in this development. All these products have been viewed as the best of the breed products by the industry and highly appreciated by the customers.

Details of IPR assets and amortisation are as follows:

Product IPR Million
Opening Net Block 145.11
Additions 105.70
Amortisation 39.86
Closing Net Block 210.95


Increasing Competition

New providers and existing technology vendors are constantly foraying into the airline IT and finance domain.

Accelya Solutions is constantly investing in people, solutions and processes to ensure maximum value to its customers.

The companys in-depth knowledge of the industry and its requirements makes Accelya Solutions the partner of choice for airlines.

Uncertain Economic Environment

The airline industry is amongst the first to be impacted by any major economic or political situations. Accelya Solutions is in a good position to mitigate this risk.

The Company has a global customer base. The Company has long term contracts with its customers which generates annuity revenues and provides good visibility on business.

Regulatory Risk

Proposed legislation in certain countries in which Accelya Solutions operates, may restrict airlines in those countries from outsourcing work to the Company, or may limit its ability to send employees to certain client sites.

Accelya Solutions has employees of different nationalities which helps in mitigating this risk to a certain extent.

Cyber Security and Data Privacy Risk

Global cyber security and data privacy threats are ever increasing. Accelya Solutions has relevant controls and compliances in place to address these. The Companys Privacy Management Program covers continuous risk analysis and mitigation for all its products, services and processes.

Currency Volatility

Being a global organization dealing with global customers, volatility in currency exchange movements may affect the results of Accelya Solutions operations.

The Company has currency hedging policies and practices in place which are regularly reviewed to mitigate this risk. Resource Availability

Accelya Solutions is in an industry driven by domain knowledge and intellectual property and the Companys success depends in large part on its ability to attract and retain talent.

A strong HR process to identify competency and skill gaps on a continuous basis, a well-defined hiring program, and competency development of the Companys employees continue to be key areas of strategic focus for Accelya Solutions.

Human Capital

Accelya Solutions is committed to enable and encourage a forward-thinking and innovating team. The Companys human capital model is built around creating systems and processes that unlock people and organizational potential, whilst monitoring key objectives and metrics.

Some of these key metrics imperative to our business are shared below. It is our endeavor to...

Attract qualified talent.

Educational Qualifications

Post Graduates Engineering /Other Graduates IATA Certified / Diploma holders Undergraduates
19% 67% 11% 3%

... With deep experience in our domain & technology... Total Experience

Less than 2 years 2-5 years 5-10 years More than 10 years
16% 13% 24% 47%

.... and encourage practices of inclusion and diversity to bring forth the best in our people.... Gender Diversity

Men Women
60% 40%

...while making all efforts to retain the best people and enable them grow in their roles


Attrition for FY 18-19: 12.83% Voluntary attrition for the year:

Financial Year ITS AMS Others
2018-19 20.53% 8.83% 14.93%

For the last year, some of the key programs that we were focused on are summarized below:

Accelya Knowledge Circle (AKC): Building a Learning Organization

Creating a culture of continuous learning has been a focus for the Company. This year, the Company built on the success of Coursera for AKC. For the new contract period with Coursera, it aligned the learning content with the key divisions learning needs, created custom learning programs, significantly improved the catalogue of courses, opened up access to all employees and saw a much larger adoption of the learning platform.

Strengthening the Companys Performance Culture through DRIVE

DRIVE is Accelyas global performance management process which sits at the intersection of the individual, team and organizational performance. It incorporates continuous feedback and conversations around an individuals goals during the year and then assesses performance against those goals at the end of the year. The quality and transparency of the performance dialogue and process directly impacts the performance of employees and thus the organization.

Empowering Managers to Hire the Right Talent

As part of the Companys vision of leveraging technology, this year the hiring and onboarding processes were digitized using a popular platform that is fully aligned with the current HRMS. The tool also enables future employees to stay engaged with the Company through their notice period and eases their joining processes.

Building an Engaged and Motivated Workforce

The Company introduced a newsletter Panorama which brings together news and views from across global Accelya offices, enabling employees to be aligned and work together towards a collective vision and business outcomes.

The new office premises in Vikhroli, Mumbai with its modern and international design will encourage an open culture and improve employee experience.