Choosing the right revenue management service

Transcription

1 A quality service from civil air navigation services organisation Choosing the right revenue management service Transforming revenue generation in the Air Navigation Service Provider industry White Paper January 2014 In association with

2 Contents Summary 3 The challenge 4 Revenue management: a new model for ANSPs 5 Comparison of revenue management and billing services 6 What is Flightyield? 8 How it works 8 About the Flightyield Partners 9 flightyield.com 2

3 Summary The processes and systems involved with managing revenue in the Air Navigation Service Provider (ANSP) industry have not kept pace with the transformation of commercial aviation. To sustain future growth in the industry, it is essential to manage revenue more efficiently starting with its collection. Today, most revenue is collected through simple billing services that serve legacy back-office processes. These billing services are labor-intensive, inefficient and generate inaccurate data, invoicing holdups, payment delays and more. The outcome is frequently lost revenue. The alternative is to use revenue management systems to increase the accuracy and decrease the processing time for invoicing. They ensure on-time payments and improve cash flow, leading to higher overall revenues. Revenue management systems are also designed to be flexible enough to cater for future needs and cost less to operate than older billing systems. Revenue management is also perfectly suited to outsourcing. To meet your needs, we developed Flightyield, a fully-integrated and end-to-end aeronautical revenue management solution. Delivered via the SITA Air Transport Industry (ATI) Cloud, it provides billing, collection and revenue management resulting in reduced costs and higher net revenue. flightyield.com 3

4 The challenge Over the last 30 years in the air transport industry, we have seen the emergence of low-cost airlines, the increasing commercialization of ANSPs and significant changes in technology. With so many more players in the market, accurate charging, billing and collection of overflight fees has become increasingly complex. However, ANSP pricing methods and systems have not kept pace with these significant developments. As a result, many in the industry are not equipped to manage their existing revenue effectively. One of the key problems is the continuing reliance on outdated manual processes for billing and charging. Legacy pricing systems are often based on spreadsheets with static flight plans and scheduled data, requiring significant manual data entry and processing. These systems are incapable of supporting complex charging models and are not fully integrated with other operational systems. This creates inefficiencies, frequent pricing errors and unnecessary additional costs. We have summarized the most critical problems that legacy billing systems create for ANSPs below. How many of these do you recognize in your own business? 1. Inability to apply flexible policies and subsequently flexible pricing models. This can, for example, prevent you from raising charges for service elements, even though they required significant investment. 2. Processing of incomplete data following the use of flight schedules instead of actual flight records. Missing information on aircraft configuration and ownership, and application of nominal routes instead of actual routes flown, result in missed or incorrectly processed charges. 3. Data entry errors due to large amounts of data processed manually. Especially where data is transcribed from hand-written records, such as tower flight strips. 4. Invoice delays through manual processing and time spent on chasing missing data. Invoices are produced weeks or even months late, resulting in poor cash flow. This is increasingly unacceptable in a commercial model, where you need to produce a fair return on capital. 5. Invoice disputes are inevitable when processing millions of charge record items for hundreds or thousands of airspace users. Large amounts of time and resources are wasted processing disputes. 6. Payment delays caused by the time it takes for airspace users to process invoices and raise disputes and enquiries. Further delays are experienced by systems based on paper invoices and statements, which are sent through the post and subject to monthly check runs. flightyield.com 4

5 Revenue management: a new model for ANSPs The solution to these challenges is to look at invoicing and charging in the overall context of revenue management. Although it is a new concept for the industry, revenue management allows ANSPs to manage profits effectively in the face of price pressures from airlines and meet the changing demands of the air transport industry. An effective revenue management system eliminates the unnecessary cost and complexity of old manual systems, and paves the way for more sophisticated and sustainable pricing models. In addition, revenue management is well suited to an outsourcing model, allowing you to: Reduce operational and labor costs Reallocate resources to focus on core functions Remove the cost of upgrading outdated systems Eliminate the high costs of technology acquisition Implement a system without the need for capital investment Provide immediate access to new services which responds to industry needs Continuous updates to functions and features in line with industry vision Access new functions and services that meet your evolving needs Outsourcing revenue management services When choosing an outsourcing partner, it is essential that your provider understands the specialist nature of the aviation industry, the variety of data formats and the complexity of the data that is used across the globe. It s also important that you establish the difference in services that your outsourcing partner can provide. Can they offer turnkey revenue management or simply billing services with limited functionality? flightyield.com 5

6 Comparison of revenue management and billing services The following table outlines the key differences between revenue management and billing services. Business need Revenue management service Billing service Data management and service Complete, correct and up-to-date data Flexible policies, revenue projection and end-to-end service Takes data directly from multiple sources without manipulation or intervention by customer Validates data automatically and integrates by vendor with a 10 stage error checking process Captures and enters multiple methods of data for easy adoption by the customer Vendor implements customer s billing policy and provides advice on global standards Applies new policies as required Provides seamless transfer to customer policies Able to model future revenue projections for new routes and changes to billing policies Optional ability to collect all fees associated with billing Provides a full end-to-end service Invoicing and payment Timely invoicing Provides timely invoicing as a result of managing the data at source, invoicing potentially within minutes of flight landing or vacating the airspace Timely payments More timely payments as a result of managing data at source, managing corrections and issues as they arise, as well as providing an online query and dispute resolution process Takes data provided by customer in prescribed format. Requires additional manipulation Validates basic data, i.e. format and correct policy Enters only single method of data prescribed by the vendor Only caters for vendor prescribed billing policy Not available Not available Not available Generally only collects overflight fees Provides billing function only Delayed invoicing due to no direct data management Doesn t provide an online service hence payments take considerably longer flightyield.com 6

7 Comparison of revenue management and billing services continued Business need Revenue management service Billing service Disputes and risk Shorter and minimum number of invoice disputes Fees based on revenue, shared risk Service and coverage Full customer service Provides an online query and validation service ensuring delays in reconciling queries or disputes is minimized Base fees on collected revenues, rather than invoiced, sharing the risk with customers Provides on-line invoicing and query management which reduces the number of disputed invoices Relies on disputes being managed by the customer, resulting in long payment delays Base fees on invoiced revenues Not available Leverages the strengths of the three industry-leading partners to ensure the service meets the customer needs and continually updates the service Has not yet offered new services or employed updated technologies or processes. No sign of future services Global coverage Provides services on a global basis Regional or membership-specific service, with inconsistent practices across regions Providing for the future Up-to-date technologies Uses modern and agile technologies ensuring rapid response to new customer requirements Uses older technologies and processes The comparison clearly shows that a revenue management service provides greater value than a billing service. Implementing an automated, integrated solution offers significant payback. It includes higher revenue returns than a billing service, improved cash flow and is designed to meet your evolving needs. There are several financial services available to outsource billing services. However, there is only one service offering a comprehensive revenue management capability: Flightyield. flightyield.com 7

8 What is Flightyield? Flightyield is a fully outsourced revenue management service purpose built for ANSPs. It s operated in partnership with CANSO, SITA Bureau Services and Airways, New Zealand s ANSP, with over 10 years experience in developing nextgeneration billing and revenue solutions. The scalable system is currently in operation in both complex airspace, such as China and Saudi Arabia, and less complex airspace such as Fiji and Papua New Guinea. Flightyield is delivered through the SITA Air Transport Industry Cloud, and is supported by a dedicated invoice processing team and financial services resources from SITA Bureau Services. This means that it both provides the systems to support next-generation airspace yield management, and processes invoices, manages enquiries, accepts payments and remits validated funds. How it works We install a Secure Flightyield Gateway (SFG) into your network to collect, filter and buffer source data from the surveillance and flight planning systems. This processes financial transactions into your financial systems. Each SFG is configured with drivers from existing radar and other standard interfaces, or a custom driver can be developed for each new system. It offers a range of monitoring, filtering and buffering options to ensure that you have ultimate control over the data. The systems securely transmit data to the Flightyield servers located in secure and resilient data centers operated by SITA Bureau Services. Flightyield technical operations personnel configure the servers for your specific charging rule sets. The charges are then processed on an agreed schedule, before being reviewed and approved by Flightyield revenue operations staff. These transactions are then sent electronically to airspace users. Flightyield operations staff also manage enquiries from airspace users and pursue outstanding payments. We remit the funds to you as they are received and validated. Your own staff have real-time access to the Flightyield system through the SITA Bureau Services customer portal. This allows them to view status and to drill-down into invoices, transaction and charge elements. They can review and request edits to charging rules, or can use the services of the Flightyield operations teams to assist with those processes. You are also able to provide secure access to the system to airspace users so that airlines and others can receive detailed and real-time access to the facts underlying invoices and statements. flightyield.com 8

9 About the Flightyield Partners Flightyield is a collaboration between three leading players in the aviation industry, each bringing core skills and experience to the Flightyield revenue management service. In association with civil air navigation services organisation The Global Voice of Air Traffic Management CANSO is the global voice of ANSPs worldwide. Its members support over 85% of world air traffic, and share information and develop new policies, with the ultimate aim of improving air navigation services on the ground and in the air. CANSO represents its members views in major regulatory and industry forums, including at ICAO, where it has official Observer status. CANSO represents the needs and strategies of the global ANSP community in the overall design and architecture of Flightyield and provides the contractual framework for Flightyield services. The world s leading specialist in air transport communications and IT SITA is the world s leading specialist in air transport communications and information technology. SITA works closely with every sector of the air transport community, innovating, developing and managing business solutions over the world s most extensive network one that forms the communication backbone of the global air transport industry. SITA s secure network and cloud infrastructure hosts the Flightyield technology. SITA Bureau Services, which is owned by SITA, integrates IT and financial services to provide business processing and management. It manages the business processing for Flightyield including billing, collection and revenue management. Making Your World Possible Airways is New Zealand s ANSP, managing around 30 million km 2 of controlled airspace and over 1 million movements per year. For more than 20 years, Airways has also provided a range of products, services and training to ANSPs around the world. Airways has extensive experience in developing and deploying the technology behind Flightyield both in New Zealand and internationally and is responsible for deploying and operating the technology for the Flightyield service. Contact Flightyield Contact us to explore how Flightyield can help you improve your revenue management and improve your cash flow. Further details can be found at flightyield.com Sales@flightyield.com