Presentation on theme: "1 Paul Rose Revenue Management Alliances Systems & Development Manager “ Update on Revenue Integrity programme” AGIFORS 2000 NEW YORK."— Presentation transcript:
1 Paul Rose Revenue Management Alliances Systems & Development Manager “ Update on Revenue Integrity programme” AGIFORS 2000 NEW YORK
2 CONTENT ( What is Revenue Integrity, and why do it? ( Revenue Integrity Systems ( Revenue Protection ( Revenue Management Support in India ( Airline Revenue Integrity Forum ( Summary
3 So why do Revenue Integrity ? ( Increase customer access by removal of fictitious PNRs resulting in higher revenue. ( Improve data content within RM / DSS systems. ( High CRS costs applied to all PNRs, even those that never travel. ( Accidental revenue abuse. * Badly trained staff at airlines/agencies. ( Deliberate revenue system abuse. * Creative travel agents / customers..!
4 4 Strands of our Revenue Integrity programme SYSTEMS PEOPLE DATA CLEAN -UP R.I. FORUM
5 BA’s Revenue Integrity Systems ( Downline cancellation of no-show pax ( PNR firming * live with all major CRSs * sends firming check at 21 days ( Premium 5 days) ( Cancellation of unticketed PNRs * tailored to individual market requirements. * focused on consolidator fare classes where ticketing deadline stated in contracts * optional warning message sent prior to cancellation
6 BA’s Revenue Integrity Systems ( Validation of classes used in dealt bookings * tailored to requirements of each market * validates PNRs containing “Q” class (6th freedom) ( Cancellation of bookings within MCT * identifies PNRs which failed EOT check * connections BA to BA or OC to BA * sends warning if just below MCT * cancels if impossible
7 BA’s Revenue Integrity Systems “Nobble” ( works with CRS who have POS capability ( denies availability and access to BA space at IATA level ( benefit is reduction in exposure to abuse ( agents currently ‘nobbled’
8 BA’s Revenue Integrity Systems BABS name change restriction ( prohibits more than 3 character changes. ( intended to stop ‘space blocking’ ( restriction applied by class, fltno, date. ( keyword over-ride for Supervisors.
9 Revenue Protection Focus ( Interview psgrs at LHR/LGW suspected of holding suspect tickets. ( Illegal use of revalidation stickers ( Booking high yielding selling classes space whilst ticketing at lower fare type. ( Cross border selling
What we mean by ‘cross border’ GVA - LONNot Travelled LON - NYCTravelled NYC - LONTravelled LON - GVANot Travelled e.g. GVA - NYC, on Concorde, costs £3000 r/t in GVA. LON - NYC, on Concorde, costs £5000 r/t in LON. So pax intending to only travel LON - NYC buys GVA - NYC ticket and removes first coupon without travelling, hence ‘costing’ BA £2000
11 The scale of the problem Assumptions ( An OR study was conducted looking at all traffic for September ‘97 ( Cross border violations were considered to be journeys with Premium Long-haul sector travelled, and Short-haul sector not travelled Results ( 74 Concorde, 154 First and 447 Club pax segments were potential cross border selling violations in September
12 What they should have paid Assumptions ( 15th September ‘97 fares from ATPCo ( One way fare used ( 7% commission removed ( 5% ‘average’ net rate reduction ( US sold tickets were assumed to sell for 90% of the UK sold amount Results ( The difference between what was paid and what should have been paid was £129,000 (Concorde), £180,000 (in each of First and Club). This implies a loss to BA of almost £0.5m in September
13 Cost of the problem Assumption ( September totals were multiplied by 9 to give an annual estimate * A factor of 9, as opposed to 12, was chosen because September has a disproportionately high level of premium traffic. Summary It is estimated that cross border selling violations of the type considered at the time of this study cost BA £4.4m pa
14 Incorrect usage of selling classes ( Monitored via systems. * Re-educate agent on first occasions. * Agents causing habitual problems warned, then NOBBLED !
15 Ticketing - problem areas ( History of Tkts- Manual Paper Tkt, TAT, ATB1/2, E-Tkt. * Hand written tickets a problem * Why do we retain all of these ? ( Abundance of supply - not an audited document * Where revals applied is the penalty payment passed on to the carrier ? ( Don’t rely on check-in agents ! ( E-TKT the solution ? * Interlining & System outages !
16 Rev Man Support in India ( Initiative to remove processing work from RM analysts to low cost centre offshore. ( 120 people in Mumbai / Pune ( Low cost operation, high quality people * Employed by WNS / Speedwing * Flight Clean-Up * Tktg / Fares Abuse
17 FLIGHT CLEAN-UP ( All flights within route group “cleaned” ( Multiple checks at standardised points. ( Search for Dupe bookings:- ¬ Identify and queue to originator. If no action: F/J refer to supervisor 100% match - cancel
18 FLIGHT CLEAN-UP ( Missing ticket numbers / names:- Identify and queue to originator ( Also undertake ad-hoc projects e.g. Special event flight firming e.g. Promotions. ( Spurious names e.g. :- ATEST, NTBA, NONAME, TBA, MICKEY MOUSE
19 FLIGHT CLEAN-UP RESULTS SO FAR ( Expected potential annual benefit approx $22M Additional benefits :- J Catering costs reduced J Lower noshows J Data stability. J Saved CRS charges ( WEF Apr’00 migrating manual processes to automation via new software.
20 Important aspects of data cleansing ( Consistent approach, 100% of the time ! ( Actions checks or automated programs at same intervals, ideally before check points in forecasting element of RM system. * If you can’t do this don’t do anything ! * Be aware if you don’t do it someone else will !
21 Financial benefits from Revenue Integrity ( Systems produce - > $74M p.a. ( Revenue protection - > $14M p.a. ( Flight firming / data cleansing activity - > $22M p.a. TOTAL BENEFITS = >$110M p.a.
22 Revenue Integrity Forum ( BA initiative to spread knowledge,share benefits & clean up the industry. ( but forum not owned by BA ) * Non competitive issue for all carriers. ( First forum hosted by BA in London 18 Nov’98. * Attended by 7 = BA, SR, EI, UA, LO, KL, IB. ( Second hosted by UA in Chicago 3 Jun’99. * Attended by 9 = BA, SR, EI, UA, LO, KL, IB, LH, BD.
23 Revenue Integrity Forum ( Third hosted by CO in Houston Mar13/14’00. * Attended by 15 = BA, KL, SR/SN, EI, IB,CO, VS, SK, NW, AF, QF, FI, CM, KK. Items covered:- ( Systems utilised. ( Flight firming approaches. ( Future of endorsement stickers. ( Group booking in Asia effects on R.I.
24 Revenue Integrity Forum ( Next forum to be hosted by LOT scheduled for first week Sep’00 in Poland. * Will include software suppliers for first time. * Then Zurich - Feb/Mar’01.
25 Future Revenue Integrity forums ( Meetings expected to be held twice yearly and rotate around forum members to minimise costs. ( Looking for new members - ALL are welcome to attend, to:- * Share experiences, approach, learn more etc. ( Cross Alliance forum * oneworld, STAR, Qualiflyer and others represented. If you are interested please contact me.
26 Summary ( Revenue Integrity is low cost investment with a high R.O.I. * BA saves approx > $110M p.a.. for less than $2M outlay p.a.. ( Data cleansing improves RM system results. * But either do it properly, or don’t do it ! ( Not a competitive issue ! We should share knowledge, experiences, progress solutions. * Educates the travel trade, cleans up the industry. ( Revenue Integrity forum growing, get on board now !