Paul Rose Revenue Management Alliances Systems & Development Manager

1. “ Update on Revenue Integrity programme” Paul Rose Revenue Management Alliances Systems & Development Manager AGIFORS 2000 NEW YORK

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

3. 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..!

4. 4 Strands of our Revenue Integrity programme SYSTEMS PEOPLE R.I. FORUM DATA CLEAN -UP

5. 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

6. BA’s Revenue Integrity Systems • 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

7. BA’s Revenue Integrity Systems“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’

8. BA’s Revenue Integrity Systems BABS 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.

9. Revenue Protection Focus • 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

10. What we mean by ‘cross border’ 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 GVA - LON Not Travelled LON - NYC Travelled NYC - LON Travelled LON - GVA Not Travelled

11. The 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

12. What they should have paid Assumptions • 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

13. Cost of the problem Assumption • 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

14. Incorrect usage of selling classes • Monitored via systems. • Re-educate agent on first occasions. • Agents causing habitual problems warned, then NOBBLED !

15. Ticketing - 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 !

16. 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

17. 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 supervisor 100% match - cancel

18. FLIGHT 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

19. FLIGHT CLEAN-UP RESULTS 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.

20. Important 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 !

21. Financial benefits from Revenue Integrity • Systems produce - > $74M p.a. • Revenue protection - > $14M p.a. • Flight firming / data cleansing activity - > $22M p.a. TOTAL BENEFITS = >$110M p.a.

22. Revenue 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.

23. Revenue 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:- • Systems utilised. • Flight firming approaches. • Future of endorsement stickers. • Group booking in Asia effects on R.I.

24. Revenue 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.

25. Future 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.

26. Summary • 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 !

27. Any questions ?