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Paul RosePaul Rose

Revenue Management Alliances Revenue Management Alliances Systems & Development ManagerSystems & Development Manager

“ “ Update on Revenue Update on Revenue Integrity programmeIntegrity programme””

AGIFORS 2000 NEW YORK

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CONTENTCONTENT

What is Revenue Integrity, and why do it? Revenue Integrity Systems Revenue Protection Revenue Management Support in India Airline Revenue Integrity Forum Summary

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So why do Revenue Integrity ?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..!

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4 Strands of our Revenue Integrity 4 Strands of our Revenue Integrity programmeprogramme

SYSTEMS

PEOPLE

DATA CLEAN -UP

R.I. FORUM

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BA’s Revenue Integrity Systems 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

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BA’s Revenue Integrity BA’s Revenue Integrity SystemsSystems

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

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BA’s Revenue Integrity SystemsBA’s Revenue Integrity Systems“Nobble”“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 200 + agents currently ‘nobbled’

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BA’s Revenue Integrity Systems BA’s Revenue Integrity Systems BABS name change restrictionBABS 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.

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Revenue Protection Revenue Protection FocusFocus

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’What we mean by ‘cross border’

GVA - LON Not TravelledLON - NYC TravelledNYC - LON TravelledLON - GVA Not 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

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The scale of the problemThe 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

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What they should have paidWhat they should have paidAssumptions 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

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Cost of the problemCost of the problemAssumption 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

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Incorrect usage of selling Incorrect usage of selling classesclasses

Monitored via systems. Re-educate agent on first occasions.

Agents causing habitual problems warned, then NOBBLED !

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Ticketing - problem areasTicketing - 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 !

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Rev Man Support in India 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

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FLIGHT CLEAN-UP 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 supervisor100% match - cancel

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FLIGHT CLEAN-UPFLIGHT 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

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FLIGHT CLEAN-UPFLIGHT CLEAN-UPRESULTS SO FAR

Expected potential annual benefit approx $22M Additional benefits :-

Catering costs reduced Lower noshows Data stability. Saved CRS charges

WEF Apr’00 migrating manual processes to automation via new software.

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Important aspects of data cleansingImportant 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 !

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Financial benefits from Financial benefits from Revenue IntegrityRevenue Integrity

Systems produce - > $74M p.a. Revenue protection - > $14M p.a. Flight firming / data cleansing activity -

> $22M p.a.

TOTAL BENEFITS = >$110M p.a.

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Revenue Integrity ForumRevenue 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.

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Revenue Integrity ForumRevenue 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:-Items covered:- Systems utilised. Flight firming approaches. Future of endorsement stickers. Group booking in Asia effects on R.I.

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Revenue Integrity ForumRevenue 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.

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Future Revenue Integrity forumsFuture 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.

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SummarySummary 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 !

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Any questions ?Any questions ?