|
In the
recent times, the global airline industry faces some typical
challenges like battling increasing costs, over capacity,
surviving amidst fierce competition that are here to stay.
With increasing terror threats, war and other crisis, the
industry has been hit by shocks beyond normal business scenarios.
Though losses reduced from US$ 5.6 Bn in 2004 to US$ 1.7 Bn
in 2006, the industry is still reeling under pressures to
stay afloat and provide sufficient return to its investors
in a bid to retain its attractiveness.
The Industry estimates that about 2 – 5% of identifiable
revenue is lost each year due to leakages and inefficiencies
in partner channels. These include revenue losses due to ticketing,
under-collection of fares and incorrect application of fare
rules on tickets issued by the travel agents, inaccurate settlement
between other airline partners, either intentionally or erroneously.
About 0.7 - 1% of this is directly attributable to ticket
sales related errors. With tight margins, over capacity, uncontrollable
cost elements like fuel etc., one of the ways airlines can
look to turn profitable through deployment of processes that
ensure recovery of lost revenue. This lost revenue has a direct
impact on the bottom line of the airline business both in
monetary terms as well as strategic decision making processes.
To put things in perspective, let us consider an Airline with annual revenue of US$ 2 Bn. With a net profit margin of 4%, the airline makes US$ 80 Mn after tax. Using the estimation that approx. 1% of revenue is lost due to ticketing errors; this airline would be losing US$ 20 Mn each year. Adding this amount to the bottom line @ 4% margin would require the airline to increase the top line business by at least $ 500 Mn, a 25% jump over $ 2 Bn, which at the average growth rate of 5% p.a. would take the airline at least 4 additional years to achieve.
To identify and eradicate these ticketing errors, which make
up a minimum of 1% of your revenue, Kale RRPS™ has perfected
the following services:
|
