A new report commissioned by Amadeus has found that airlines can boost their top and bottom line by streamlining financial processes.
In a climate where the airline industry faces challenges like financial management – including revenue leakage, complex income streams and tax reporting – and compliance across multiple markets, Amadeus commissioned growth consultant Frost & Sullivan to write a report on ‘streamlining airline financial processes’.
Key findings from the report include that airline chief financial officers face a number of challenges which can cost airlines as much as 3% of revenue, and that greater integration of financial processes could boost revenues by up to $1.5 million per annum for a medium-sized airline.
The report also found that adapting to new payment methods such as Bitcoin will be a competitive imperative and that Blockchain technology could have a revolutionary impact on accounting by offering a single, secure, transparent global ledger.
Frost & Sullivan went on to conclude that interline settlement improvements could save the industry $500m annually if airlines embrace tools and standards, and that better financial management will enable the development of the airline product, in turn improving the customer experience and delivering increased customer loyalty.
Patricia Simillon, head of strategic marketing in airline IT at Amadeus, said: “This report reveals a significant opportunity for airlines.
“Streamlining financial processes will enable airlines to achieve optimization and efficiency. This is a strategic priority for us at Amadeus and we are committed to working with our airline partners to transform the industry’s approach to financial management.”
Alexander Michael, director, digital transformation at Frost & Sullivan, added: “In certain circumstances airlines today may not even be able to know the exact revenue numbers for a specific flight.
“It is imperative that airlines now focus on integrating and streamlining financial processes, not only to eliminate revenue leakage and other inefficiencies, but also so they can benefit from predictive analysis, becoming truly customer-centric and improving the top and bottom lines.”
Michael will present the report’s findings at the IATA World Financial Symposium in Barcelona tomorrow.