Partner Newsletter
Shaping the Future Together
  • Airlines
  • Operations & Infrastructure
8 December 2021

Rassure: Helping Airlines Discover Lost Revenue In Its Own Backyard

It is often said that it is very easy to find lost things under a lamp post but difficult as we move away from the light. Does it have a practical business significance in today's world? The answer is YES.

Airlines often invest in technologies that apparently assure them of 1. Increase in revenue and 2. Reduction in the cost and this is the order of the day. However, quite often airlines fail to benchmark to what extent an investment can make a difference to the bottom line. For some, it could be X% and for some, it could be X + Y%. It is often seen that airlines are competitive in the customer interface areas like Prices and Fares but do not have avenues for benchmarking against inward looking factors like Revenue vs Cost and potential saving opportunities.

How about a benchmark that allows airlines to improve its bottom line within its own backyard? There is also an assurance to airlines that it is not losing any revenue due to sampling, selectively looking at big ticket items or visible violations. The key is vacuuming the floor to look at all instances of violations right from booking till the last coupon with an insane level of accuracy.

In an ideal scenario, every booking must be productive (i.e., ticketed). However, studies at various airlines have shown that unproductive booking is to the tune of 10-12% for an airline. For a USD 10 Billion revenue airline, an unproductive booking costs airlines about USD 50-60 Million, annually. The interesting factor is that most of the airlines focus only on 4% of the losses that are due to the agent, however, they often ignore the leakages on account of GDS contract terms and the airline's own policies. Very few airlines have the capability to look at these dimensions, as it requires significant investment in the platform, data science, and advanced analytics to transform the business knowledge into tangible parameters.

Second, the losses continue once bookings get converted to ticketing and further changes like exchanges and refunds come to play. These leakages are on the account of standard business practices set out in the industry with human components into the detection process. A human component is always subjective and skewed towards samples governed by the cost-benefit ratio.

Result - look at missing objects under lamp posts.

Surprised? Is there a solution? Yes. It is very much possible in today's digital world with loads of data like PNR, Sales, Taxes, BIDT, etc. which leaves digital evidence of violation. All that is required is a capability to ingest these data, advanced algorithms to sift through and identify violations beyond doubt and enable the airline to discover “Mackenna’s Gold”. Rassure can help you discover your lost Gold. What are you waiting for?

 

Rassure

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