The Allplane Podcast #21 - Aviation Fuel, with Daniel Chereau (IATA) & Yulia Dianova (Gazpromneft-Aero)

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Fuel is one of the key lines in any airline’s annual report.

And while research into alternative propulsion methods is under way, aviation fuel is expected to remain one of the single most important aspects of any airline operation for years to come.

And, yet, this apparently straightforward procedure has quite a few layers of complexity that the industry is trying to overcome with the help of digital technology.

Our guests are at the forefront of this quest to make aviation fuelling processes more efficient.

Daniel Chereau is Assistant Director, Commercial Fuel at the International Air Transport Association (IATA) and Yulia Dianova is the Head of International Sales Division at Gazpromneft-Aero, a leading aviation fuel supplier based in Russia and with operations worldwide.

In today’s episode of the podcast, Daniel and Yulia, talk about the work being done by IATA’s Fuel Data Standards Group (FDSG) and how new digital standards to transfer information between the different players in the aviation fuel market are bringing huge advantages and making life easier for all those involved. Yulia will also explain the case of Gazpromneft-aero as an early adopter of these IATA standards.

Get yourself comfortable and get ready to listen to a podcast episode packed, quite literally, with energy!

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Things we talk about in this episode

  • How does the aviation fuel market work

  • Why arranging aircraft re-fuelling can be a messy business

  • What does the IATA Fuel Data Standards Group (FDSG) do?

  • What are IATA’s XML fuel standards and why they matter

  • What is Gazpromneft-aero and why it is an early adopter of IATA’s XML fuel standards?

  • Has Covid-19 accelerated the adoption of digital standards in the aviation fuel world?

Interview Transcript (coming soon!)

(please note that, although we strive to make it as close as possible to the original recording, the transcript may not be 100% accurate)

Hello and welcome to the Allplane podcast!

As always, exploring the commercial aviation industry in the company of expert professionals.

First of all a quick reminder that you can find this and all the preceding episodes of the Allplane podcast 

With interesting stories about airlines and aviation on our website, Allplane.tv, this is Allplane.tv, important, .tv, not .com!

Today we are going to have a look at a super-essential function in the aviation world, but one that happens mostly behind the scenes.

I am talking about aviation fuel!

Obviously, and until new means of propulsion become feasible, if there is no fuel, there is not flight

This is quite a specialized area of the industry, and one that, I must confess, I knew very little about. This is why I have invited not one but two guests to come on the pod today to talk about this topic.

Daniel Chereau, is Assistant Director, Commercial Fuel, at IATA, the International Air Transport Organization, and Yulia Dianova, Head of the International Sales Division at Gazpromneft-Aero, a leading aviation fuel provider based in Russia but with operations worldwide.

Besides giving us an overview about how the aviation fuel market works, we will also talk with Daniel and Yulia about another area of innovation in aviation fuel and that is the development of digital means to optimize the whole process.

Just as IATA has been pushing some new standards for ticket distribution, like NDC, that we had the chance to discuss here on podcast number #14, check it out!, this international organization is promoting new technological standards in the fuel industry

These new standards facilitate the exchange of information between all the different parties involved in the fueling process, the airlines, the fuel suppliers, the people on the ground manning the fuel trucks, etc.

Surprisingly this is an area that until now had few common standards, and this resulted often in very complex processes that now are being sorted out by technology.

Gazpromneft-aero, for example, and this is why it is interesting we have Yulia today on the podcast, has been an early adopter of IATA’s fuel standard technology, so we are going to hear from her about what all of this means in practice.

I hope this episode helps shed some light on this very essential aspect of the aviation industry…

And without further ado, let me welcome our guests today…

Hello. Daniel, Yulia. How are you? Good.

Yeah. Hi. Hi, Miquel. Very good. Thank you very much.

So we you are in two different locations. Right? Yulia, you are in Moscow?

St. Petersburg, in Russia

Okay. And you Daniel?

I'm in Geneva. 

Geneva. Okay, so we've got a multinational call here. Very good. So we are gonna talk about aviation fuel, which is a very important topic. Because with no fuel, there is no flying, of course, we are going to try to understand a bit better how this market works with two experts from IATA from the fuel team at IATA. And from Gazpromneft arrow, which is a Russian supplier of aviation fuel. It's a very important player in this market. And first of all, I would suggest we go to the basics. Well, actually, let me put it this way. Maybe better if you start introducing what you guys do, each of you. Yeah, so who starts? Daniel, you start?

Right. So aviation fuel is a quite complex issue within and outside, there's actually three departments that currently deal with fuel. So there's one which is the technical fuel department. There's one that's dealing with self sustainability ation fields. And then there's our department and we do commercial matters. So everything that has to do with efficiencies, transparency, competition, government relations, and such. So we do that part. So it's quite complex, then usually lots of people are involved both in the supplier side and also from the airlines.

And also from IATA, you are also pushing a number of technology initiatives as well.

Exactly. And I think the main purpose of this call is to discuss how digitalization can support bringing improvements and efficiencies to the airlines and also suppliers. I think this is something that benefits all stakeholders involved.

Yes, actually, yeah, that's one of the topics we are going to discuss because like every other aspect of the aviation industry, the few segments are also undergoing an accelerated digitalization. And I think Yulia from Gazpromneft, if you're going to explain a little bit your experience in this area, can you tell us a bit about yourself and your role?

Yes. First of all, Miquel, thank you very much for inviting me to this podcast, a very interesting podcast, I should say. So I'm here from the supplier side, a leading supplier in Russia, a fuel supplier. So yeah, here we have a domestic market. And I work mostly for international sales markets, with International Airlines. And we also have our business outside of Russia, in the international airports with the direct stakeholders there with the direct suppliers, native national suppliers in different parts of the world. So I also come to the IATA fuel data standards group, where we are discussing digital standards, which we're going to discuss today on the podcast.

Yes. First of all, before we move into discussing the specific technologies that you guys have been working on, I would like to start with a bit of an introduction about how the world of aviation fuel works. Because many people in aviation, including myself, are not experts in aviation fuel, this is a very, very specialized area. But it's very important. I mean, when you see any financial report of any airline, fuel is a very, very, very important part of the cost structure of the profitability, it has a massive impact on how this industry works. It's a very technical area. So not many people are aware of everything that's going on behind the scenes. So that's why we are today. We are trying to shed some light here into this area and try to understand a bit who are the players here? Let's start by how is the aviation fuel market structure on one side, you have I guess, the refining companies, the fuel producers, like Gazpromneft-aero, obviously, there's logistics that bring it this distribution the fuel to the different supply points, then at the airport, I guess there's also the companies that physically supply the fuel to the to the aircraft, which I don't know if are the same ones that are also producing the few I don't know how vertically integrated this this market is. And then obviously, there is a whole process to and we're gonna touch this later because that's one of the areas where digitalization is happening, there's a whole process to control this flow and to a whole paper trail of contracts and counterparties involved in all this process. Can you tell us I don't know if Daniel Yulia who would like to answer this one, but how is this market structure I mean from the refinery all the way to the plane,

I guess all these processes that Miquel you just mentioned, these belong to the vertical integrated company like the company I come from. So, starting from the refinery, we take the product to the fueling firms, where we put it into the airline's tank. So, we cover all these processes together with the sales and basically, you can just divide the process of fuel supply into technical and commercial. So, the the technical parts in the airport, it consists of a preparation and the fuel supply parts. So, the preparation part is really very important because it covers the organization of technical equipment, following the technical standards, the international fuel standards like I typed up standards and it is very, there is a very strict quality control on each and every stage of pure supply from the reservoirs to the fuel tanks from the fuel tanks into the airplane tank. So basically there is a quality control because you should take very good care of this aviation few because you can do they have specifications here because it would lead to very bad results. And that's why if we speak about the operational part it's it is one of the most important parts so for the fuel supply process and the whole process So if we speak about the airline, and we know that the airline on the apron of the airport is, the whole process looks like a pit stop on the Formula racing car. So all the processes should be very fast and all the minutes are already calculated. So you can just do nothing on him, probably you should be involved in the process. So each and every second costs money. And that's why we have to be very fast there. So

You provide the whole process. So you produce, you refine, you distribute, and you all the way up to the apron when the plane arrives. And you as a company, you also physically supply the aircraft?

Yeah, we do. We do have our fueling farms, so fueling in the airport. So we take very good care of those fueling farms. We do follow the international standards to control every stage and that's why we are involved, we have been, we have been IATA strategic partners since 2008. And frankly, speaking, we started our business in 2007. And that's why we decided that we should enter an International Association like IATA, which covers all the parts of fuel supply and the parts of airlines for life. So we have the commercial part as well. And we work with them. Different types of airlines, like cargo, airlines, passenger airlines, and domestic and international and we do all those airlines we have like, very up to date, commercial partnerships. We work on different price bases, and we have the international stock exchange your formula prices with the International Airlines. So all the work of our company follows international standards. That's what I wanted to highlight, which is that it is really important to speak one language with the airlines and our partners.

Because obviously Russia, I guess is your main market, but you have operations in other countries as well. So you can supply the fuel to airlines in in different points and different airports across where you

This is, this is another commercial part of our business. So it's an international business where I work. So it's very interesting because being in Russia, we can supply to the Russian airlines, mostly most of our clients outside Russia, and anywhere they want. So we have direct contract with our partners outside of Russia. And we can actually have refueling of their clients in Russia and we can supply a few in the airports where our partners are represented. So this is an interesting part of our business, which helps us to understand the world's market better.

Because I have one question, are the airlines normally working with just one supplier with a long term relationship or one airline might be working with different suppliers depending on the airport, for example. So how exclusive is the relationship between the airlines and the fuel provider?

So it varies. I mean, aviation is truly an international business. The airlines, it also depends a lot on the airline depending on size and size and other things right. I mean, usually Airlines for the most part are price takers, such as when you go and refuel your car at the gas station. Then there is a minor part that you would negotiate with your fuel supplier. That's usually what an airline would do for the largest part of the network. But some of them have gone into self supply. At some points, you have cases where airlines have actually bought refineries. 

Yeah, Delta.

Well, yeah. And then others who, you know, manage, you know, ships and, you know, have a very integrated supply chain. Right, yeah. But you have varying degrees of involvement throughout the supply chain. And also you will have, I would doubt that there is any single fuel supplier that's present all over the world. Some of them may have a quite large footprint. But if you are a global airline, you will very likely go and have many different suppliers. And that doesn't only mean suppliers, such as Gazprom, who is vertically integrated, you may have actual fuel suppliers who are different depending on airport to airport, if you're an airline, and you're operating your own hub buying from suppliers, you may want to have more than one even right, just diversify. And you know, make sure that you will have constant streams of fuel coming from different directions and different suppliers in different, you know, supply chains, basically. Yeah. And then there's also people who handle the fuel facilities, there's interplane service providers, there's IT service providers. So it's a very complex environment. And I think, a very interesting business. And that actually what it makes is that the fuel community is quite tight outside. So we have the aviation fuel formula, IATA, which is attended by like 800 people. And usually you see the same faces all the time, because usually what happens is you start as a fuel buyer in an airline, and then you become like a fuel salesperson. So it's an interesting world. quite complex.

So yeah, actually, I wanted to ask you about the ecosystem, because there are, of course, large, integrated, vertically integrated companies, Iike Gazpromneft. But I guess they're all some, some stages of these fueling process. There are also independent providers. Are there airports, for example, I guess there's people that are only providing fuel, some of the people are just doing maybe storage, also doing the refueling on the ground. And that, I guess, it really depends on the market, right. So, you have some airports where there are more, there's more competition, some other airports, there's less competition, is it that way?

That's how it works. And it actually depends a lot on the regulatory environment and historical reasons. I mean, there are reasons why some parts of the world we tend to see more monopolies and more vertical integration in other parts of the world, you see more competition in general in IATA, I mean, the ultimate objective is to have, you know, sustainable business for everyone, basically, mostly the airlines. And that usually means lower prices and or prices that will allow for continuity of business of airlines and all suppliers. We tend to think that it works best when there's competition, because it takes less regulation. But everything works. I mean, there are certain conditions where you could see certain benefits from having a monopoly and such. Right. So our goal is to have clean, dry in on specification fuel at a cost that's reasonable.

Because what's the involvement between IATA and fuel companies? So you mentioned for example, Yulia mentioned the Gazpromneft arrow works with IATA, how is this relationship structured? So you're an international organization that sets a number of standards, but what are the specific initiatives where you work together with airlines, and the oil supplier? I guess, for example, one of them is fuel standards. So the fuel data standards group, for example.

So I'll go from the more general to the more specific, IATA is an Association, which works for airlines. So our main objective is to have a sustainable, and thriving aviation industry and airline industry. With that in mind, we collaborate with other stakeholders. So IATA has within its membership, it's only airlines. But there's a strategic partnership program through which we collaborate with other stakeholders along the supply chain for airlines. Fuel suppliers are part of that and we collaborate with them because we realize that collaboration is the way through which you get better results and better conditions for all involved in a certain market. That's certainly the case for airlines. So when it comes to aviation fuel, we have the aviation fuel forum and in different instances where fuel suppliers and fuel buyers and other service providers that also work within the fuel area. So in technical issues or, you know, suppliers of material and services and others, we provide a forum for people to meet. And then we have the field data standards group, which is also something that's within IATA us governance. So we have airlines there. But we also have fuel suppliers in IT service providers and others who collaborate to develop, which ultimately is a language through which all the stakeholders can communicate. So we have a set of standards, which are based on XML language through which all people involved in the supply chain can communicate. 

Yeah, actually, if I can make a post here, I've been doing some research ahead of this conversation today and read a little bit about the work you guys do. And if I understood it correctly, because I'm not an expert in this topic, is a way to make the communication between all the counterparties involved in this value chain more agile, to simplify the other paperwork, basically, that involved in the feeling process, you make sure you all speak the same language within in plain words, why this happens now in 2020? I mean, what was the process like until now? Is it so complicated that, you know, you have to design a whole whole new way of doing things because there's so much paperwork involved in this?

Alright, I guess I can start. Again, as we were saying, it's a really complex, kind of lifecycle for fuel. So you have, since you have more than one supplier, usually for you know, different airports, or there's a negotiation process that takes place first, right. So there's a tender bid process, which is already very, very work intensive. And there's lots of communications going back and forth. So right now, I guess the current status of things is that people send proposals in an email, and then they attach PDF files and or XML files, which then have to get compared and such, right. So that's a partial digitalization, it used to be that you would send a, you know, mail, containing your offer, in there's printed material and everything. That's the start. And that happens usually, like once a year. But then you have all the operational part of it, which is the period that starts maybe like two days before the flight, there's a communication that happens between the airline and other stakeholders, not only fuel suppliers, but the airports and ground handlers and others. And then you have to have a transaction paper or something that supports you know, that that fueling. And then at the end, you have the invoicing and everything contains paper in such so these realizing has helped, you know, expedite the process. But then you initially I'm saying 20 years ago, or even before that you will have suppliers or service providers that would come with their own proprietary systems, and then you can't really talk to anyone else outside of that. And that's when the field data standards came in. Because they're a common language which allows communication in an agnostic manner, I think, through which different systems and people behind those systems can communicate and exchange information.

So it's mainly about the paperwork, the sort of information it gets changed here is transactional things like how much fuel goes into that plane? How much is the cost of that? So if I understood correctly here, there's two levels of interaction, you might have an outline and a fuel supplier might have sort of general agreements on the supply which I guess involves certain conditions certain certain covenants, etc, etc, and then at the more tactical level, then you have the actual implementation of that. So when a plane is refueled, when the plate the fuel is delivered on the tarmac, etc. So all this flow of information and this Standards cover all aspects of the relationship between the different counterparties 

Yes, so you're exactly right. We have the commercial and technical parts which normally has this, you know, the head of business located in one place and the company has different fuel stops in airports. And so you have to take all the information from the airport And to get it into the office and then distribute among your customers. So that's why it takes a lot of time. First of all it takes. Sometimes it has human mistakes, and you have to control everything to check accurately. Because at the end of the day, it comes into the airlines or suppliers losses if you don't control everything correctly. That's why so is for us. I guess that's having started our business in 2007. And starting our business when the international airlines 2012. It was the first time when I heard about XML standards, when they called me and said, Okay, do you work with the XML invoices? and they would like us to do that. And then I was in the node and I took some information on the internet. And they found that there is an IATA standard for documents like invoices. I know this because I work with international suppliers all over the world. And I can tell you that there are so many different formats that each and every company has set up in their own city or country, and how they normally work with the clients. And when you have to take all these papers, I can understand the airline, they have different types of papers, which means one of the same thing, which means the fact of the few supplies in the plane. But different types of formats of these papers have to put into their system so that they can distribute a payment to the supplier. So it takes time the airline has to sometimes check, double check the information. And this all happens because there is no one language formatted language, to distribute and to exchange this type of information. And I actually did a really great job to somehow take all these formats of different types of invoices and put it into one standard. So this invoice standard was the one of the first standards and it is the most successful, I guess, among the rest because the rest are younger than the invoice standard XML standard. So when we started to distribute XML invoices, I can say that we really had a time economy of six to 10 minutes for one document, and there are millions of such documents. And we had a really great human economy from just working with the documents. And it's really great after that, when we started to implement the XML invoices in our company, according to the IRS standards, then started to see how they work in Russia. And what could be even more done to make those standards be more, you know, applicable in Russia. And so we took an initiative and we entered our Working Group and came with some initiatives in order to set the, to make this standards more applicable in brush and just to

Russia was very different from other countries?

I wouldn't say that it was different, all the countries are really different. Even in Europe, different tenders of the documents for months, they really differ. So just knowing this, knowing this peculiarities over the country, helps our group, our working group to fit the standards into the realities of these regions where the document is used and is applied. So this helped us as a Russian company to feature this standard into our Russian realities and to distribute these electronic invoices among our clients and we are now really happy they're heavy. And it's really great if we can satisfy those requirements and cut our expenses and our human resources and To, you know, to involve those resources into more complicated tasks, not just, you know, looking at the documents and check if everything is correct or not. Yeah, because

I'm thinking here, when you are driving, and you need to put fuel in your car, you just go to a petrol station, and you take the credit cards, or cash and you pay on the spot, you know, that many liters, that much money? That's the price. That's it. So in the case of aviation, if you have one plane flying from one country to another, how do the people at the airport where it needs to be revealed? No, you know, it's going to come this plane, and it's going to be there between this time and this time, and it's to get that much fuel, and it's going to cost that much money? So how does this in practice not work. So the airlines should tell in advance, I guess, the fuel company, and a few companies would tell the people at the airport that they need to refill that plane at that time, and put that much fuel? And then who pays that? I mean, is it paid in advance? Or are you the people who are there for the whole process goes the other way around? So people are there to say, hey, we refute this claim for that match. And then it goes to the headquarters and from the headquarters sends an invoice to their airline. So is it how it works? More or less? So? I guess not, there's no red card, you know, the pilot goes there. And

There they are. Yeah, that's not what's used by most commercial airlines. But there are a few suppliers. And I'm pretty sure it gets promoted as if they issue their own credit cards, they could be co-branded with banks and such. But that's actually something that happens. 

So to better understand how you guys are implementing this at a practical level…

So the captain when there's a flight, he has to the top priority for every airline in the world is safety. So if you want to get from point A to point B in a certain type of aircraft with a certain payload, you need a specific amount of fuel. But it could be at least that or could be more if you want to be saved, because you know, there's going to be some uncertainties in the weather in where you're going to be going to and such right. So how much fuel will get uploaded? Or uplifted is decided by the captain there, right? How do they communicate that to the person who's going to perform the actual uplift usually, and traditionally, what happens is there's a dialogue like a face to face dialogue, and it ends when that person who performed the uplift, goes and shows a paper to the captain and tells them look, this is how much I uplifted sign here. And they would sign to go back. Now that triggers a whole process,

Can you define the concept of uplift or for the people that are not familiar with it?

Okay, so a person goes with a hose which they will connect to a could be a different device or it could be a refueler it depends on you know whether there's gonna be a truck with actual people in it or you will connect to the hydrant there's a bit and then connected and then the fuel goes from there into the plane.

Okay, so it's the actual action of physically putting the hose 

Yes, filling the tank

Okay, good. Sorry, I interrupted

So and then if that triggers the whole payment process, right. So you negotiate with a supplier payment terms, so you can go prepay or you can have credit, and then there is a certain period with which you will be invoiced. So maybe all the app lifts from this week will be invoiced by the end of the week, and then the airline will have 14 or 28, or whatever days to pay unless they've been already paid in a prepaid, you know, agreement, but that's basically how it works. And, of course, there's things to consider in there as you know, fuel density and specifications. Usually the specification relates to where you are uplifting fuel, right? So in Russia, you have a specification, you have another certification in the US for the most part equivalent, but then you will have differences as to usually it's freezing point. So if you're going to have a transporter flight, do you need fuel that's gonna freeze at a lower temperature than if you're flying, you know, from the Caribbean to South Africa.

Like it's like, like a petrol station, you might have 95, octane or 98, octane.

That's different grades for a specification. But again, I'm the commercial guy here. So based on this agreement, they put one one type of fuel or another into the plane. Usually you want one specification in each airport. And that's defined in your contract, which is part of the tender bid process.

So then what you're doing is digitalising. This flow of paper, as Yulia said that involves a huge amount of savings, or the processing resources that you need to deploy to get all the system working now.

Yeah, it also concerns not only the commercial part, it also concerns the part where they're fueling requests, as Daniel said, that pilots as the final call quantity, but before that, the airline sends a fueling request for one year, for instance, or for for one month, one week with the schedule saying, Okay, I have these kind of flights here. And you should fuel all these flights on the airline account. So we're as a supplier, we nominate this fuel request to the fueling farm, people who are scheduling their job on the apron there, they know that they have different flights of different airlines that should be covered by this supplier in this airport. And they know that they would need two or three drugs for this time or five trucks for that time. And they are planning their job on the L F con. So when you have lots of scheduled flights, they can occur very unexpectedly. And in order to be ready to heal them, because they all have timing, especially, you know, I can show you an example or in the Siberian region, we had this very huge amount of cargo flights that were flying from Europe, to Asia, from Asia to Europe. And they were using airports as their technical stops for refueling. So what does it mean that the airplane arrives in the Novosibirsk airport, for instance, and asks for fuel. And it means that the people who are working there should be really very fast, because the only thing the airline needs right now is just the fuel. So there is no time for anything else. And in this case, the instant nomination of the airline with the fueling request, which is sent by means of digital transportation like by means of, for instance, I had XML standard operational standards, where the airline sends several different requests in different timing prior to the day of refueling. On the day of refueling, when the airplane is in the air, they send the correct amount of fuel that they would need. And the final on the apron in the airport they sent the final fuel request with the final amount of fuel that they would need at this time depending on the weather and the commercial cargo and other things that really affect the amount of fuel they would need. And in this case, there are a few operator in the airport already knows how much they would need and they wouldn't put be put in such situation when there will be just one truck ready to refuel, but the airlines would need two trucks because this is the main the main reason why you can just go to the fuel gas station and refuel your car very easily with the airline. So you can just do it with one truck or two trucks. And that's why you need to be warned beforehand how much fuel they would need, and you should be ready within a very short time to refuel the airline. So that's how that's how the standards work. They really work and are very effective in such situations especially.

Yeah, actually, I was thinking like, you can do a planning beforehand. But then I mean, the plane faces tail winds or, or headwinds or whatever, and might defer the final quantity. So how fast is this automated communication? Not automated, not real time, but it's very, pretty fast, right? So this flow of information keeps updating, as soon as the airplane lands, when the aircraft is in the air. So you can you can be adjusting it different times during, during your expect,

Right, you would expect that that's, that's how it works. And it's automated and everything. So I started in the aviation fuel area about like 15 years ago, and then I did other stuff within the airline world back in fuel since two years ago with IATA. And then I said, Okay, so maybe the world has changed, you know, since 15 years ago, and today, right, and things I was expecting, like you, you know, like, instant and automated and everything. That's hardly the case. I mean, with the exception of a few airlines, which have done a great job, and also a few suppliers. And Gazprom is one of them is digitalising. And, you know, having digital support to the operation, the reality for most of the world is not that you'd see that some of the communications in operations between airlines, and airports are based on teletype today to 2020 that was developed and in use since the 1970s. Right. And it's being used currently. And I'm not saying like, you know, I'm from Chile, which is like in the bottom of Latin America. So yeah, you would expect for generalization to have gone a longer way than it has, especially with aviation, because aviation is supposed to be I mean, the fact that, you know, you can lift people off the ground requires lots of technology. So you would expect airlines to be at the forefront of all innovation. And that's hardly the case. If I received an invoice and I see a problem with the invoice when I was in an airline 15 years ago, what I would do is I would take the invoice printed, go to a place where we would be saving all the flight logs, right, which have to be saved there for compliance purposes for matters of security and safety and others. So you'd have this huge warehouse with lots of flight logs. And I will go in and have to compare what was signed by the captain at that airport on that day and such with the invoice I received, and that would facilitate reconciliation, which is a process that goes after you receive the invoice. And if you've digitalized, and you have integrated your systems you get instantly, like you just let the systems work and tell you whether the invoice is correct or not. But in the vast majority of airlines today, there's lots of paperwork and things going behind the scenes that take place for an invoice to get paid.

And the actual implementation of the software that needs to process these standards. Is this done through something that has been developed by IATA or is this something that each, for example, Gazpromneft has its own application developed for this? Or is there an ecosystem of, for example, I'm thinking now, there's another IATA initiative, NDC, it's in the booking areas completely different than there's a whole ecosystem of companies that are developing applications and systems to handle this type of standards. I don't know if it's the same here.

So I'll start with the general and maybe you can then go in and tell us what's the reality. But you don't need to have IATA XML standards implemented in order to do things digitally. You can do it on your own standalone system and such what the IATA standards enable our communications that when you want to let me take a step back here, you have a system and you want a system to interact with other systems. And if they speak a common language, that implementation is Very quick and easy and painless. So if you have a common language to communicate, then maybe you have you're an airline, you support the operational standard. And you want to connect to a fuel supplier that provides fuel at an airport where you're not currently flying, you want to start playing there. And instead of going through this whole painful process of implementation and talking to them, which for any it developer there, you know, it's going to take weeks or months, even if you speak the same language, and you both have systems in place that can inter communicate, then it's just switching on a, you know, a little, it's a switch to turn switch on. But again, I think, a more direct way of answering your question, do you need the standard to digitise No. And you can implement your systems. But if you are implementing things that are compliant to standard, then whatever you want to bring online later is going to be much easier, you just have to switch things on and off. But I

I guess, there must be some interfaces involved to be able to manage flows at each end

We have IT service providers that work with us, and you can go and buy an off the shelf solution with them. And that will make your life much easier. But you can also develop in house. So another thing that we are doing, because the standards have been developed already. So our function now as a group is to maintain them, right. So there are some new things coming up. And then we have to incorporate those into the existing standards, but maintenance work. We're also developing implementation guides to make it easier for companies that want to develop things in house to just take the manual, see examples and implement it. I don't know. I mean, I don't really know at Gazprom, they may have developed their own e house things. And actually, I think they have a really good team of people developing things, and they have been working a lot. But there are other suppliers who have implemented it with others.

Yeah, I can add that. Yes, exactly. We have our own in-house solutions for this. We have a very strong digital team in their back office, which works for developing our digital initiatives. So for example, have an instant data exchange system, which is hardware, but with the help of IATA XML standards, we can exchange, we can instantly send the data up to the fueling is done, we can instantly send this information to the airline. So the airline can have it in the system, we just need to have, you know, the same language speaking. So most of the airlines, most of the biggest airlines speak IATA XML language. So it's easy for us to exchange information with them. So we also have these invoicing standards in place. So we're working with the older Russian Airlines on this standard. And of course, the International too. And we also have developed the tender with standard within our company and we have gone through the POC with the IATA working group sessions and workshops, we had a POC with many international airlines already and we have proved that this tender process works with the help of our in house solution. And also data exchange. We had in 2018, we had a POC with Air France for this standard operational standard, which also works in our company and we even exchanged information for the bulk movement inside between the chamber storage tanks with help of the IATA standard. So it's really helpful and it's a really international language for data exchange and we're happy to have it in our in-house solutions. For software. This really helps to save time and to be open for the other airlines and our partners outside of Russia to have this common digital language in place.

Very good. And the inevitable question is how does this very weird, unusual external in any situation we are living in the industry affected the rollout implementation of the standards has this somehow affected you in when it comes to implementing it or The opposite maybe because it's like everything that moves in the direction of digitalization. Maybe it's been accelerated by this pandemic situation. What? What's the situation?

So it's a very interesting time. Right now, we're going into a recession, there's definitely more demand. And people actually realize the benefits right now. And it's a very basic reason why everything that involves paper involves people, different people touching the same sheet of paper, which is a vector for contagion. Right? So you can get infected by touching the same piece of paper that someone that is infected touched. So yeah, I was describing the process through which the person who performs the uplift goes to the cabin to the cockpit. There's risk there. And that's, that's not happening. Now. Fortunately, there are procedures in place through which you can avoid that one of them is digitalization, right. But then unfortunately, you have some jurisdictions where that digital signature is not valid from a fiscal point of view, for instance. So that's a challenge in the US, even within Europe, you have different countries having different approaches to digital signatures. So yeah, there's increased demand. But everything that means implementation means cost. And no one has a cent to spend on things that are not vital to the operation right now, especially airlines. So airlines are forced to let people go in this current times, right. And, of course, they're not looking into anything that's not quite vital to the operation. So we actually had in, I think, you may have mentioned it, a very interesting project to develop a an industry hub in IATA, through which airlines and other stakeholders like fuel suppliers and interplays, with service providers could communicate and exchange information, which will enable what I was telling you before that you can just switch on a supplier. And in a certain airport, there was a great project with lots of support from the industry, but came, you know, down came COVID-19. And everything was put on hold. So, we've been impacted both ways, lots of interest, but no money to support that interest.

I guess it's one of those cases where you might have a long term saving, but it requires so many investment at the beginning. And that might make it complicated when that's the kind of thing because the payback is not going to be that long term, it's quite quick. But you don't have money to spend. So even if you're going to get your money back, actually save lots of money really quickly. You can't afford to spend any cent.

And I guess people working from home as well, it makes things slower.

Well, actually, I can say from myself, I'm like 1/3 of workers in my company, we're remote working. So we worked remotely from home, we didn't see any, you know, troubles with that. Because, of course, personal connection is very important. But when it is dangerous, it's better to stay home. And more than digital solutions, they help to make no changes to the process when you work from home remotely. So and once you know, it's interesting, because once I came back from the remote home work, I came to the office and they here I had to take my temperature every four hours and I had to realize we are taking COVID tests regularly and older workers under the antivirus program and very good support from our company because the company companies employees, they work on the apron and each and every shift and the number of people it should be you know, the it should be same and as planned because it affects the workout on the apron with the airlines and the airport infrastructure itself. So it's very important to stay healthy. And that's why I really felt the importance of staying in the team. Healthy and Save, after or during this COVID crisis times if this crisis, especially in our company, we understood that in this crisis, we should think into the digital questions more thoroughly. We have our plans to somehow approach the internal processes to make them more digital oriented, more easy to have this, you know, paperless work to enable it on all of our fuel stations. Now, we can have it in Sheremetyevo airport, and we're thinking of exporting this solution to all the fueling farms of our friends. So it really was a trigger for the digital revolution, I should say.

And going forward with pandemic without what's the perspective for the standard, which targets Do you have, in a long term perspective? How do you plan to popularize these standards? You know, these days long term means two months, right? I mean, sort of uncertainty?


Yeah, I mean, it's gonna be a very uncertain time for the airlines. In general, I think. So we are seeing massive hits in terms of personnel and resources in general. So it's gonna have a mixed effect, I think. I think at every level in the organization's everyone is well aware now that digitalization is possible and needed. So that's the only way to go. So eventually, we'll get there. And I think this may catalyze implementation, and digitalization and such. But to do that, we will need a workforce in place. And I think it's going to take some time to rebuild all the foundation's in many of the airlines. And this is a part of the business. But I think this this crisis came to reshape the aviation industry as a whole. So it's very hard to tell what's going to happen. digitalization is going to happen, because that's where the world is going and where it's been going for the last 20 years already. So I actually told you, I'm surprised that we are lagging back so badly. But eventually we'll get there. And I think how quickly it'll happen will largely depend on how, how strong the airlines are in how, and how quickly we'll get the resources that we need to implement all these things.


Yes, we also think that we have to do something with the crisis and should teach us some lessons that we should take a note of, and what we think that being the avant garde of these changes, we would become some kind of Enlightener of the digital philosophy industry. And we guess it would help to make the process not more complicated athan to buy a cup of coffee at the airport, that's our aim. Of course, the parts of the quality and following those standards would be the same or the same, but their cooperation and means of cooperation, the solutions that we are going to develop really help us to achieve such a name to make it simple,

Very well. So yeah, I think we can maybe leave it here for today. And I think in a very comprehensive roundup of this very interesting initiative. I'm sure we'll hear a lot more in the near future. As you said digitalization continues unabated and becomes the norm, even in those very legacy processors that are now still being transformed in our day. So where can people find out more about these standards? Is there an IATA website where they can check this information?

Yes, but the address is quite complicated. So I would invite people to use our good friend google and type IATA and check the data standards

Or check the podcast notes where I'm gonna post links so that they can find all the reference information. Alright, well thank you so much. It's been very interesting having you here today and learning about this so important area of the aviation industry that is normally out of sight, because you arrive to the airport, you board, you disembark but you don't really get to see all the all the different processes that are moving at the same time to make sure that the plane gets refueled and ready for the next flight. So, yeah, something that's always interesting to learn about. Thank you so much.

Thank you for having us.

Thank you very much. Thank you.

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