Leveraging Technology to Create the Treasury of the Future
by Friedrich Floto, Senior Vice President, Finance & Administration, airberlin PLC & Co. Luftverkehrs KG
As a leading airline that has a recent history of rapid growth and an ambitious future strategy, treasury plays a vital role in supporting the financing (including aircraft financing) risk management, cash and liquidity management needs of the business. To fulfil this role, treasury needed a sophisticated treasury management system (TMS) that would support greater efficiency, automation and control, and enable the treasury team to focus on tasks that added value to the business and contributed to the group’s strategic objectives. In this article, Friedrich Floto, SVP, Finance & Administration discusses the project so far to select and implement a TMS.
airberlin has a centralised treasury organisation in Berlin. Like other airlines, overseas entities are typically small ticketing operations rather than large business functions with their own P&L so cash and treasury management requirements are largely concentrated in the centre. Within this centralised environment, we have a unique treasury organisation at airberlin. Instead of having a group treasurer, we have two SVPs responsible for different aspects of the treasury function. My colleague looks after long-term financing (including aircraft financing and leasing), trading (including foreign exchange, interest rate, jet fuel and CO2 emissions certificates) and jet fuel procurement. On my side, I take care of middle-office and back-office functions, including cash management, liquidity management, working capital, and debtor and creditor risk management. Across the two teams, we have a treasury department of around 30 professionals.
Previous and planned infrastructure
airberlin has enjoyed rapid growth since it was founded in 1991, including frequent acquisitions in recent years. Although we had a legacy treasury management system (TMS) in place, it became increasingly difficult to manage our requirements in the system as the group’s treasury demands expanded and became more complex, resulting in a variety of ancillary tools, spreadsheets and manual processes.