New technologies can help airlines streamline operations

digital, finance, digitalization, money

The industry stands to benefit from a number of initiatives that will improve operational processes.

Real-time risk management for airlines, for example, means gaining control over financial losses.

Key to this will be an adaptive behavioral analytics platform, which understands individual agency behaviors.

The promise of machine learning is that multiple data feeds can be analyzed in real-time to control risk and loss

“Using this approach, airlines can gain more control over managing financial losses associated with risk, in particular “bust-out” fraud,” says Martina King, CEO of FeatureSpace.

“Delivering cutting-edge innovation into a complex business is always an exciting challenge,” adds King. “The promise of machine learning is that multiple data feeds can be analyzed in real-time to control risk and loss.”

Agent Debit Memos (ADM) will also benefit from greater efficiency. “According to an IATA ADM market study, there is an evident gap between the airline and agent perception of the business relationship,” says Amber Wan, IATA’s Manager, ADM Management and Reduction Project.

“Agents consider that the relationship with airlines when managing ADMs is unsatisfactory with an average rating of 4.5 out of 10, while airlines appear to be satisfied overall since 71% rated the relationship higher than 5 and the average rate is 7.”

The IATA ADM Reduction and Management Project will resolve this discrepancy. Through the Agent Debit Memo Working Group (ADMWG) key issues will be addressed, including reducing the volume of invalid debit memos.

At the end of 2016, the ADMWG prioritized several solutions:

  • Reducing the need for ADMs in various areas, thereby reducing the workload, resources and time spent on post-billing revenue auditing

  • Streamlining various work processes and enhancing the ADM process, to create a lean post billing settlement process

  • Enhancing the communication process within the existing workflow, improving business relationships

“We believe that if the industry works together to improve efficiency and to reduce the number of ADMs raised, we can substantially reduce our revenue leakage up to 28% in 2020 compared with 2016,” Wan concludes.

Supporting all industry innovations is NewGen ISS (New Generation of IATA Settlement Systems), a key industry program intended to modernize distribution and payments in the Billing and Settlement Plan (BSP), delivering faster settlement, safer funds, and simplified processes.

For airlines, IATA EasyPay transactions are secure with no risk of chargebacks, unlike credit cards

IATA EasyPay is one of the components of NewGen ISS, a secure, pay-as-you-go e-wallet solution to pay for tickets through the BSP.

“For airlines, IATA EasyPay transactions are secure with no risk of chargebacks, unlike credit cards,” says Juan Antonio Rodriguez, IATA’s ‎Director of Financial Distribution Services Operations.

“The transactions are cost effective and are settled to airlines in 48–96 hours through the BSP, thereby improving airlines’ cashflow. For agents, this optional payment method is a way to reduce their financial securities with IATA, and offers simplified reconciliation.”

Rodriguez says a collaborative approach has been key to the successful implementation of NewGen ISS. 

In particular, joint working groups with the various participants have proven very valuable

From the onset, airlines were engaged through various governance groups in defining the program components.

Agency associations were also consulted and IATA engaged directly with the GDSs to obtain their commitment to the technical developments required.

“In particular, joint working groups with the various participants have proven very valuable, as they allow stakeholders to better understand each other’s needs and perspectives,” Rodriguez concludes.

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