Revenue Integrity More Important than Ever

With the move by more and more airlines to renew their IT-applications or to completely outsource older in-house mainframe systems, fully automated ASP (Application Service Provider) applications are moving more into focus. At the forefront of this focus on ASP is Revenue Integrity.

An automated E-TKT application supported by an Internet Booking Engine and the growing number of online travel agencies force airlines to take a closer look at Inventory and Revenue Management systems. At the same time, the classic GDS reservations now need more sophisticated management to avoid revenue leakage. With the more and more sophisticated Inventory Systems and Revenue Management programs such as Point-of-Sale application and Bid Price, the Inventory must stay clean from the first day a flight is set up. The Internet sets a fine line in terms of Revenue Integrity: once the journey is booked, it needs to be paid and thus ticketed. This represents clear and present revenue- at least in the majority of all cases.

Revenue Integrity: More Important than Ever - By Frank Socha, President & CEO, Airline Solutions

But, how do we achieve this with classic bookings through the GDS by travel agents and by airline staff for tickets in Business/First Class and a large variety of Special Fares, which do not require immediate payment? Revenue Integrity is the IT-providers’ answer. A Revenue Integrity system is a set of customizable applications for the control and the cleaning of an airline’s Inventory System.

The Revenue Integrity database stores information about all the PNRs in an airline’s reservation system. Where such information is stored depends on the individual Revenue Integrity application design. Typically such PNR data is stored in a so-called “shadow database.” This shadow database can then be accessed at any given time in order to process the business parameters and rules, defined by the airline, for the identification and listing of all PNRs that are breaking the defined revenue integrity rules. Such processing is typically automated and is executed on a daily basis or real-time as bookings are created.

Each listed PNR is then opened in the Reservation system and processed according to the predefined rules. The results typically are:

Reminders to reservation office to complete PNR (example ticket number).
Cancellation of flight segments.

The main benefits of such an automated application are obvious:

The reduction of distribution costs by not paying applicable GDS booking fees due to the cancellation of wrong bookings, false bookings, etc.
Due to the cancellation of these bookings, the inventory is opened up again for new bookings that generate additional revenue.
Cleaner inventory through the entire booking period.
Enhanced waitlist management, reducing oversales and creating greater customer satisfaction.
Better RBD management.
Better forecasting based upon better past data.

From an airline point of view, this requires very stringent definition of the applicable business rules and parameters. The business process is multi-disciplinary and requires participation from various departments. In order to achieve optimum results with any Revenue Integrity application, the application requires actions from the airline:

To work in cooperation with the sales force.
To be based on clear business rules and objectives.
If possible, no compromises to unanimously agreed rules.
Measure the benefits and report them regularly.
Constant exchange of knowledge and experience with the application provider.

Any such Revenue Integrity application should be built openly and flexible in order to enable the airline to change their business rules and parameters at any time.

Following is a short list of some of the possible business rules and parameters for a Revenue Integrity application. This is not a complete list and any airline wishing to apply Revenue Integrity in a fully automated way has to identify its own in-house business processes first in order to have a clear understanding of its own particular needs.

Ticket number check
Fictitious name check
No show on previous flight segment check
Waitlist segment check
Duplicate segment check
Duplicate PNR check
Group PNR check

There are many Revenue Integrity systems available. Airlines must understand their in-house business processes first and define them before a serious search for the right Revenue Integrity system can be accomplished and then implemented. The savings are massive and I encourage all airlines which have not yet adopted Revenue Integrity to do due their diligence.