Airline Passenger Revenue Accounting - NIIT Technologies White Paper
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Airline Passenger Revenue Accounting
NIIT Technologies White PaperCONTENTS Introduction 3 Airline Operations 3 Revenue Accounting Function 3 Selecting the Right Revenue Accounting System 6 Conclusion 6
TRANSPORTATION
TRAVEL
CARGO
PACKAGING
TOURTRANSPORTATION
GUIDE
TRANSPORTATIONTRAVEL
TRAVEL
CARGO TRAVEL
LOGISTICS
CARGO
GUIDE JOURNEY
JOURNEY
TRANSPORTATION CARGO
CARGO LOGISTICS
GUIDE TRAVEL
Introduction that accumulates on their desks. This has been possible due to
the advancement in the Revenue Accounting and related
Airline business, which was a monopolistic and profitable
systems; where departments of an airline are benefitted with the
business till mid 90’s, is now one of the most complicated,
information available on a real-time basis. Today, Revenue
competitive and vulnerable businesses in the world. Rising fuel
Accounting systems have become so dynamic that they not
prices, major government pressures on tougher security
only provide relevant information on a real-time basis but also
measures and a tough global economy have cut profits and
provide minute details required to check the performance of a
airlines are working hard to operate within parameters of costs single route, on a single day. This information facilitates the
and budgets. Adding to the pain, low cost airlines have entered decision makers to make adjustments in their Fares,
the fray with variable and flexible operating models. Legacy Reservation Booking Designators (RBD), Schedule, Type of
airlines will have to engage in innovative efficiency measures to Aircrafts used on a particular route etc. as compared to how it
stay in the air and in the black. To survive and to attain long term was handled in the past.
profitability all carriers will have to restructure and refocus. One
In a nut-shell, there was no dearth of information for an airline.
key tool for this radical overhaul is to outsource most of their
However the tools that are available today are far too advanced to
noncore processes. This will result in major cost cutting and allow
facilitate timely availability of actionable intelligence.
them to leverage their scale and systems.
This paper lists the revenue accounting providers, the features of Revenue Accounting Function
the solution they provide and ways of selecting the right revenue The Revenue Accounting function has changed manifolds as
accounting system. compared to what it was decades ago. With a lot of initiatives from
IATA and group airlines, the focus has been to make the overall
process electronic. While projects like eTicketing, Simplified
Airline Operations
Interline Settlement (SIS) etc. has changed the job of a Revenue
With changes in the overall airline industry, almost all functions in
Accountant from real accounting to monitoring the
an airline have revamped lately. Some of the areas which were
activities/behavior of the system in use, the demand of the
treated as back-office tasks have gained huge importance in the
fast-evolving global travel market has made the business of airline
day-to-day working of an airline. Revenue Accounting is one such
revenue accounting even more complex. There is tremendous
function that has gained tremendous importance in the way
pressure to record, monitor, analyze and collect all types of
Commercial/Sales department of an airline takes decisions. The
revenues as soon as possible. Thus, it becomes imperative for
decisions of the airlines are fuelled primarily by the latest
enhancements that have taken place in this area of business. The airlines’ to streamline revenue accounting functions and develop a
Revenue Accounting systems today have become highly robust by highly effective solution.
accounting the worldwide sales of an airline and by delivering
As a reaction to these new initiatives and in order to keep pace
data-analytics with the help of new Analytical tools,
developed/adopted by the system providers. with the changes in the industry, Revenue Accounting system
providers have come far compared to the vision they were initially
There was a time when this information was not readily available built on. However the thought process of adopting these changes
to the decision makers, but now they risk being flooded with data has been different for different providers. While some of them
3continue to modify their existing codes, others have taken a stand of succeeding in the market for such vendors is much higher as
to build next-gen Revenue Accounting systems that not only compared to the new entrants, since Revenue Accounting is a
performs accounting but also provides in-built analytical tools heavily domain led function of an airline.
along with several other value-adds. Some of the vendors have
already started understanding the value of an integrated solution Revenue Accounting System Providers
and have embarked on projects that leverage new technologies to Below is a snapshot of all the major Revenue Accounting system
shift their old platforms and make them more robust. Possibilities providers along with their market share and synopsis:
Airlines
Vendor Product Country/Backing % Market
served
In House IT Department NA NA 42 21.21%
Mercator RAPID/RADAR Dubai/Emirates 35 17.68%
NIIT MonaLisa Germany/Independent 26 13.13%
SITA SITA PRA Global/Airlines owned organization 23 11.62%
Ceicom Aracs Fx Spain/Independent 19 9.60%
Lufthansa Systems SIRAX Germany/Lufthansa 13 6.57%
Accelya Kale REVERA India/Spain/IATA 13 6.57%
Sabre SabreAirVision PRA Global/Independent 12 6.06%
Navitaire SkyLedger Global/Independent 5 2.53%
Rene Perez Associates eRev US/Independent 4 2.02%
Unknown NA NA 4 2.02%
In House Mainframe NA NA 1 0.51%
Maureva EDGAR Mauritius 1 0.51%
198
Traditionally, the market for Revenue Accounting system providers The latest addition of Integrated Reporting and Data Analytics
has been segregated based on their geographical locations. While within the Revenue Accounting system has gained lot of
some airlines in Asia Pacific, stick to their in-house solutions, importance. A lot of emphasis has also been given on making the
others have migrated to Revera by Kale Consultants. Most of the Revenue Accounting systems real-time and reducing the time gap
airlines in Middle East use RAPID from Mercator and MonaLisa between sales and recording of any transaction that helps airlines
from NIIT Technologies in Europe, while Sabre/SITA enjoys a bigger in making real-time, informed decisions. Revenue Accounting data
customer base in the North and South American market. However are keys for making decisions but normally transmitted in a raw
this trend has started changing lately, primarily after the 100% format to some other systems. However, with the evolution of
e-Ticketing initiative launched by IATA, which has changed the next-gen Revenue Accounting systems, this data can now be
overall picture of how Revenue Accounting processes are easily presented, transmitted and reproduced at any stage with
managed in an airline. very less effort. The new Business Intelligence tools helps airlines in
creating their own reports without any help/assistance, helps users
to dig deep into data without getting lost, measure the necessary
Post e-Ticketing, IATA has launched several new initiatives that
KPI’s for decision making and helps in forecasting.
have given these providers possibilities to prove their strengths. In
the bargain some of the niche providers like Kale, Mercator has
tremendously gained the market share whereas big Airline system
players like SITA and Sabre has not been very aggressive in this
area of business.
4Amadeus Passenger Revenue Accounting Data Reporting and Analytics
System Revenue Accounting incorporates unrivalled, advanced Online
The latest addition to the list of vendors for Revenue Accounting Reporting facilities, first-class Drill-Down, Slice-and-Dice and
systems is Amadeus, leader in the Airline Systems market with comparative Capabilities with the objective of maximizing revenue.
more than 200 airlines using Altea Reservation system. Amadeus Airlines typically manage data reporting and analytics with revenue
has signed two of the biggest airlines - British Airways and Saudi management solutions. Many of these solutions integrate with the
Arabian Airlines as their launch customers. core Revenue Accounting systems while some, mostly the newer
ones, are in-built solutions easier to use as well as maintain.
Amadeus Passenger Revenue Accounting is a robust, new
generation passenger revenue accounting system based on Some of the key features offered by these solutions are:
advanced and intuitive technology. It is specifically designed to • Automated the procedure of extracting data from revenue
meet the needs of an airline for a high-productivity, real-time accounting systems and other sources
application that also provides full integration with respective • Fully supported decision-making by commercial, marketing and
passenger service system. finance departments within airlines through powerful and
accurate data analysis
It enables an airline to stay in control of the automatic recording, • Expanded system's analysis scope, and ensured loading of
management and reporting of real-time information related to all non-revenue accounting data such as budgetary figures and
planned, unearned and earned revenues. It allows efficient commercial targets
handling of any accountable document received through any
• Key statistics are automatically generated. Examples include:
distribution channel. Amadeus Passenger Revenue Accounting
- Flown revenue
represents an innovative progression in the business activity that
- Sales
transforms the airline accounting task into a strategic function.
• Key performance indicators such as load factor, RTK and RPK
- By period e.g. day/month/quarter/YTD/user-defined period
Other than the standard industry modules such as Sales
- By flight number
registration, Usage registration, Interline billing, Proration,
- By sector, route, origin and destination
Financial Accounting and Sales/Revenue Reporting, it also offers
- By market
modules like Card capture and settlement, Sales auditing and
- By point of sale/agent wise
Agency incentive manager. For Airlines having full Altéa suite
- By product
Amadeus Passenger Revenue Accounting System is fully
integrated with other leading Amadeus solutions such as • Made it extremely easy for business users to perform the
Electronic Ticketing Server, Electronic Miscellaneous Document analysis needed to help them in their jobs, with the system using
Server, Altéa Inventory, and Altéa Departure Control. All sales are software features
recorded, reported and analyzed automatically, in real time. • Online canned reports
Airlines also benefit from instant identification of earned revenue • Provided the ability to create user-specific flexible/graphical reports
through the online capture of flown information.
• Provided dashboard facility for a quick and easy to use
summary view
5While making a choice out of so many options available in the
• Extensive drill down/drill up query facilities
market, an airline must focus on the following items:
• Comprehensive security features control the dissemination of
• Vendor background/experience
information on a need-to-know basis
• Reference customers
• Audit features track information usage
• Product features
• The system helps in proactively monitoring performance against • Integration with other third party systems
targets • Adaptation of the latest industry enhancements
• Knowledge can be shared through single data delivery facility • Technology in use
• Provided data warehousing technologies • Analytical capability of the solution
Selecting the Right Revenue Conclusion
Accounting System In recent times, most of the airlines are plagued with huge fixed
Airlines around the world have to operate on tight schedules and costs and bankruptcies. Hence it is imperative for the airlines to
accuracy for detail, where every activity is crucial and critical to run take decisions with regards to CAPEX/OPEX and high level of
the business successfully. As they are heavily technology driven agility to overcome these obstacles.
they need to ensure that they are using the right vendor and the
right system to achieve predefined targets. It is imperative for To summarize, Revenue Accounting systems add significant value
airlines to choose the right partner. to airline’s day-to-day decision making. With highly advanced tools
available in the market, airlines should go for a long term solution
Airline business is dependent on partnerships in different that not only meets its current requirements but also the challenges
operational functions. Lately most of the airlines have been that the industry might face in the future. The chosen system must
maintaining a vendor pool for finding the right partner and like any be capable of reducing possible revenue leakage possibilities,
other industry gets inquiries, calls, and proposals from several presenting timely and accurate reports to the higher management
vendors in various areas of operations on a daily basis. With so and bringing process improvements in the overall Revenue
many options available it is difficult for the airlines to make right Accounting function of an airline.
decisions. Industry governed systems such as Revenue
Accounting also gets highly customized to the airline’s need over a The success of such an engagement depends on the experience
period of time. It becomes difficult as well as risky for the airlines to and commitment of the technology partner that can lead to a long
make an easy change of system. PRA operations remain a term partnership between the two organizations. Hence it is critical
non-core process for an airline but the information coming out is for an airline to perform a thorough due diligence before finalizing
critical for the functioning of the system. the partner with relevant experience, resources, scalability, well
established processes and data security.
4About NIIT Technologies
NIIT Technologies is a leading IT solutions organization, servicing customers in North America,
Europe, Asia and Australia. It offers services in Application Development and Maintenance,
Enterprise Solutions including Managed Services and Business Process Outsourcing to
organisations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, and
Government sectors. With employees over 7,000 professionals, NIIT Technologies follows global
standards of software development processes.
Over the years the Company has forged extremely rewarding relationships with global majors, a
testimony to mutual commitment and its ability to retain marquee clients, drawing repeat
business from them. NIIT Technologies has been able to scale its interactions with marquee
clients in the BFSI sector, the Travel Transport & Logistics and Manufacturing & Distribution, into
extremely meaningful, multi-year "collaborations.
NIIT Technologies follows global standards of development, which include ISO 9001:2000
Certification, assessment at Level 5 for SEI-CMMi version 1.2 and ISO 27001 information
security management certification. Its data centre operations are assessed at the international
ISO 20000IT management standards.
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A leading IT solutions organization | 21 locations and 16 countries | 8000 professionals | Level 5 of SEI-CMMi, ver1.2
ISO 27001 certified | Level 5 of People CMM Framework
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