Thanks to Jared Blank for pointing me to this recent story in The Copenhagen Post called Donald Duck stunt hits airline.
Hundreds of fake names appear as no-shows after purchasing cheap tickets on competitor airline’s new route. Airline Cimber Sterling has been accused by its domestic competitor Norwegian Air of buying all its special offer tickets on a new route under fake names to prevent ‘real’ customers from taking advantage of offers.
The story makes for a very entertaining read, but the most interesting part for me was that it got me rethinking the long held skepticism I have held regarding the value of revenue integrity processes in airline direct sales channels, especially the website. I’ve never questioned the huge value an airline receives doing revenue integrity on travel agency bookings, but when booking creation and payment occur at the same time the value seemed less obvious.
So I consulted Tony Dinsdale, the man I know who is more knowledgable on revenue integrity than all others, and between tuk-tuk rides in Bangkok he found time to answer my email on the question of why airlines should take direct channel revenue integrity seriously. Below are some of his key points.
In general, the reasons for performing revenue integrity on direct channel bookings are the same as the reasons for doing so on indirect bookings. The differences are that airline employees frequently know of more loopholes than the indirect channels do. For instance it is too common to find employees making multiple bookings on the airline’s website (where they can be anonymous) in order to secure space for standby travel. Airport staff also tend to create bookings to close out flights for sale so they don’t have to deal with oversales, or make bookings for their friends and circumvent the last ticketing date.
Some examples of revenue integrity processes relevant for direct channels:
- Detect fake names – may indicate fraudulent use of a credit card, or at least catch the Donald Ducks in the above example.
- Credit card velocity checks – another way of catching the problem in the above story
- Dupe check – Detect multiple bookings made by accident if the passenger thought there was a problem with the website when in reality the booking went through OK. Related to this we found a special duplicate case where multiple PNRs have automatic tickets and upon investigation it turned out that some passengers were actually ignoring the warning that says DO NOT HIT YOUR BROWSER’S BACK BUTTON at critical points in the booking flow.
- Enforce time limits for bookings placed on hold on the website or in the call centre – this will also catch errors, not only blatant abuse.
- Free up inventory where passenger talks to travel agent who creates a booking, but then passenger books and pays on the airline’s website – another example of using the dupe check.
My skepticism on this topic has evaporated: revenue integrity ensures that more bookings are productive bookings, and it applies to the website just as it applies to other channels. And one more point to consider; in this age of ancillary revenue, revenue management of ancillaries is becoming more important – just look at Allegiant. If the plane is not full of passengers, even if they are travelling on heavily discounted fares, then where is your cross selling revenue going to come from?