Most airline costs are still managed by hand – it’s time to change that

Controlling costs is key in any industry. But while the direct price of operating aircraft, with multiple partners, represents more than half of airline expenditure, many accounting systems are still hamstrung by inefficient manual components. Manual processes that are open to error, and worse, intentional third-party fraud. 

To address this issue, SITA has launched AeroCost Manager, a new purpose-built Direct Operating Cost (DOC) accounting solution that delivers real-time cost management and invoice control for every dollar of aircraft expenditure. Developed with the market-leading Maureva KEOPS system, the system centralizes and integrates an airline’s cost controls by validating invoices, while also automatically detecting any overcharging.

“Keeping on top of costs in the aviation industry isn’t easy, and yet it’s essential for managing the financial success of operations and future route planning. But most direct operating costs are still handled manually and aren’t centralized. That’s not only ineffective for budget control but also opens up an airline to inefficiencies and worse, to third-party fraud,” explained Martin Smillie, Senior Vice President, Communications and Data Exchange, SITA. “SITA AeroCost Manager is a purpose-built and game-changing accounting system for airlines to control their operating costs effectively. It is an accounting solution that maximizes and adds profitability to an airline’s financial bottom line.”

Jean-Marc Perreaux, Sales Director for Maureva added: “SITA AeroCost Manager integrates our KEOPS solution to automate and enhance airline decision-making and financial stability. It centralizes data and continuously monitors costs. Without compromising on functionality and compliance, this system provides accurate calculations for everything from network and route planning to flight operations, post-flight costs and overall budgeting.”

SITA AeroCost Manager validates every expenditure of an aircraft operation – from expensive jet fuel that represents 30%-plus of any flight, to airport ground handling and associated charges, navigation and overflight fees, take-off and landing charges, and costs from crew transfers and accommodation.

With built-in IATA SIS (simplified invoicing and settlement) regulatory protocols, SITA AeroCost Manager can integrate accounting from 1000-plus suppliers to help finance and network planning teams build accurate budgets and assess route profitability on an on-going basis. It also models complex service agreements in real-time operations for automatic updates, calculating provisional costs based on current operational data. And the system automatically detects overcharging and flags discrepancies, generating claims and credit notes.

Martin Smillie added: “Without centralized, automated control of invoice management, it becomes a cost center and not a control point, with weak invoice checks. For airlines with a fleet of 50 aircraft, accounting teams will deal with 25-30,000 invoices every year. Manual processing generates simple errors, while fraudulent activity can also add unwarranted cost. SITA AeroCost Manager resolves these issues with a centralized, intelligent invoice management solution that reduces costs through automation, removing innocent human error and intentional third-party fraud.”