Back to Air Transport IT Review - Issue 3, December 2009
Air Seychelles cut over to Revenue Integrity
Air Seychelles has become the first SITA Revenue Integrity customer to use all ten standard modules and is now actively looking into Minimum Connect Time (MCT) checks and Travel Document checks, two of the new modules introduced with the latest release of Revenue Integrity.
SITA provides Revenue Integrity as an Application Service Provider (ASP) solution for the airline industry, able to perform up to 12 daily checks on all new and changed bookings. With no capital or overhead outlay, it plays a major role in stopping practices that contribute to revenue leakage.
As the national airline of the Seychelles - providing both inter-island services and international flights - Air Seychelles first joined the community of around 20 airlines using SITA's Revenue Integrity product in 2006. The airline's challenge has been to reduce unproductive bookings, while helping to increasing revenues and decrease costs.
Immediate impact
According to Air Seychelles, the advantages from using the full suite of SITA Revenue Integrity became evident immediately after implementing the solution.
"The positive impacts of Revenue Integrity were most immediately noticed on our domestic route where there is a relatively high frequency of flights," says Patrick Elizabeth, Head Revenue Management at Air Seychelles.
"There were serious problems of 'unavailability of seats' due to the common practice at that time of duplicate bookings. Regular commuters were booking on multiple flights during a day resulting in no-shows. As a result of implementing Revenue Integrity on the route, seats were more readily available and load factors increased."
The average reduction in no-shows on the domestic route amounted to just over 65% between 2006 and 2008. On the international routes a reduction of nearly 35% was achieved during the same period.
Paying back
Other significant benefits are in the areas of revenue generation and GDSs. According to the airline, there has been a 'GDS effect' which refers to an 'increasing ratio of GDS cancel transactions versus net bookings. This means that the airline has been able to cancel a higher percentage of invalid bookings, avoiding the full associated GDS fees.
On top of that, SITA Revenue Integrity has helped Air Seychelles to reduce the percentage of flights deemed 'critical' by over 8% on average. This was achieved while the airline increased the overall number of flights by an average of 26% between 2006 and 2008.
"We have experienced good short term payback on SITA Revenue Integrity and as we look forward it will play a key role in Air Seychelles' continued long-term drive to enhance efficiencies," concludes Elizabeth.
Industry savings
Over the past couple of years, SITA Revenue Integrity has saved its community of airlines millions of dollars by detecting and acting on potentially non-productive reservations. Thanks to an enhanced inventory - through early detection and action - airline savings directly impact the bottom line, with reduced distribution costs and improved revenue opportunities.
For Air Seychelles, examples include:
- SITA Revenue Integrity has detected and re-released more than 58,000 duplicate seats, and reported another 220,000 suspicious duplications for manual evaluation
- It has released more than 570,000 unticketed seats for re-sale by applying and enforcing ticket time limits.
- It has queried the necessity of closing 25,000 waitlisted segments, 80% of which were resolved when prompted by SITA Revenue Integrity.
With the assumption of an average seat value to be US $100, this translates to around US $65 million in revenue potential for Revenue Integrity customers through seats released for re-sale, as a result of deterioration of unproductive reservations. An estimated additional US $1.5m of GDS cost savings were realized on GDS booking fees.
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