Every airline has fare rules and policies which are to be followed by agencies. Non-adherence to any of these rules leads to fare rule violations, tax violation, refund violation, etc. For instance, when Roxanne cancelled her ticket to Chicago; as per the airline’s fare rules, the agent was supposed to collect cancellation fee from her. Failure to collect cancellation fee led to a violation, revenue loss to the airline, and discrepancy between collected and collectable revenue. Besides, it also pushed the airline to make additional efforts to sell the revised available ticket. A full-fledged network airline sells about 20 to 30 million tickets in a year, so such minute violations result in huge repercussions. Most of the agents may commit these violations due to ignorance regarding fare guidelines.
Besides causing revenue leakage, these factors also affect the operational costs as they result in huge volumes of repetitive and inadvertent anomalies. That’s why many airlines rely on third-party companies to find anomalies in agency ticket sales through manual fare audit. However, over a period, these service providers have become redundant as they have been reluctant to introduce modern technology. Carrying out a complete fare audit manually is not possible, considering the volume of data generated by agency ticket sale. The fare audit companies carry out random or sample fare audit using a few resources, which is an inefficient method. Hence, the need of the hour is to use a robust mechanism to detect these errors to recover lost revenue and curb leakages.
Plugging revenue leaks
Identifying revenue leakage is a tough and tricky task as it requires synchronization between the airline company and the travel agents. Leveraging technologies such as Robotics Process Automation (RPA) and Data Analytics will help airlines build this sync and save millions of dollars. It will empower the airline’s finance team with the right tools to achieve maximum coverage and speed in detecting errors and having the required insights to enable right decision-making in revenue recovery and protection.
An effective approach to reduce or avoid revenue leakages in an airline company should start with a process study conducted by the RPA team with the help of an airline’s finance team. The airline’s finance team will help the RPA team understand the airline’s policies, reservation system, fare rules, historical fare violation trends, and top delinquent agencies against whom ADMs were issued. The airline will also share yearly or monthly sales report containing information related to collected revenue and the sources of the revenue with the RPA and Data Analytics team. The process study will not only analyze all anomaly-causing factors by checking them against rules and guidelines but also identify scope for RPA implementation.
Once the process study is completed, the RPA team will write appropriate programs for robots based on various fare categories and complexities. The program will create filters based on the airline’s policies, fare rules, and violation types. By implementing the filters based on process study, a rule-based application for conducting fare audit will be created. Thus, RPA will audit all tickets as per violation type, agencies involved etc., as written in the program. During fare audit, each item in every ticket sale/refund will be checked against the airline rules. This will ensure accuracy and timeliness in detecting errors and audit completeness