Reducing Revenue Leakage for a Leading Airline Player Using the Power of Data Analytics

Making profits in airlines is a tricky and tough game. According to IATA, from 1970 to 2010 the industry overall generated a bare 0.1 percent profit margin. There are too many factors with constantly shifting trends that contribute to the profitability quotient here. Changes in the oil industry, global economic trends, safety concerns, personnel cutbacks, performance issues are some of the top frustrations that the industry faces at all times. Therefore, airlines are forever in the lookout for multiple ways to keep every flight occupied and operation cost at a constant low through competitive pricing and optimized management of revenues.

However, one problem that has been plaguing the industry over decades is the money bleeding syndrome, in other words, revenue leakage. Research by Aberdeen Group from Boston says that on an average revenue leakage affects up to 9 percent of an enterprise’s revenue. In such a backdrop, it is imperative for airlines to identify and plug and prevent any revenue leakages across the cost ecosystem.

For a leading player in the industry, Happiest Minds Technologies created a solution that went down to the root cause of the leakage and plugged the gap. There are several reasons that could lead to revenue leakage for an airline, but the most frequent and impactful cause is deliberate misuse of the revenue system. Advanced Data Analytics run by Happiest Minds on the customer’s systems identified fraudulent behavior by agents within and across the Global Distribution System such as un-ticketed bookings, passive bookings, and duplicate bookings and so on, that was ultimately accounting to revenue loss.

Data Sciences in Action

Taking data from multiple sources such as Billing Information Data Tapes (BIDT), Flight Information, Global Distribution System cost files, etc., an Intelligent Air Audit solution identified the areas of fraudulent behavior and leakage. With the traditional Extract-Transform-Load process, the data was pushed into data warehouses for prescriptive and descriptive analytics using Sabre, Galileo, Travelport and Worldspan GDS data sources. Ultimately, over 40 audit and analytics reports were delivered based on periodic refreshing of data.

The audit reports that were generated covered all the loopholes in the agent booking and global distribution system such as, inactive bookings, duplicate bookings, churn bookings, fictitious bookings, invalid class/flight/city pairs and gaps in invoicing. Going a step forward, the advanced analytics reports covered:

• Agent wise performance analysis
• GDS cost and performance
• Region wise performance
• Seasonality trends
• Code share flight performance

Impact on Business

Analytics solutions provided by Happiest Minds helped the airline business player identify revenue leakage and fraudulent behavior of ticketing practices to the tune of $100 – $150K per month. Not only that, this exercise also improved agent performance and the overall agent acquisition strategy. The engagement with Happiest Minds being on a pay per performance pricing model, unlocked better Return on Investment within the desired timelines.