Revenue leakage is a major factor for airlines’ reduction in profitability. This occurs where the difference between the business that is booked with an airline and the actual revenue that is received after travel has a significant gap. The major causes of this are due to intentional abusage of an airline’s inventory by travel agents wishing to undermine the booking processes and rules, and due to a large number of speculative bookings which either result in late cancellations, or no-shows on departure. All of the malpractices can be rectified by the implementation of a good Revenue Integrity solution.
A Revenue Integrity department using a good solution provides robustness of reservations by ensuring that travel is undertaken and is within the conditions of the sale and also by removing those reservations that create unnecessary additional costs and which reduce saleable inventory space. Many airlines during the last twenty years, have quite rightly invested heavily in Revenue Management solutions. Unfortunately, the majority have ignored the benefits of implementing Revenue Integrity, too, which would maximise their original investment and secure additional benefits, as a RI solution compliments a RMS by delivering accurate reservations data on which to forecast upon.
Paul is recognised as the founder of the term “Revenue Integrity”, and has spent much of the last ten years speaking on the subject, progressing solutions to remedy the situation, and have also created the World’s only independent non-profit making organisation focused on this issue – A.R.I.G. (Airline Revenue Integrity Group), see www.arigroup.org