This large and rapidly growing Consolidator Agency had been facing challenges with managing their PLB commitments with Airlines, with incentive outgoings to re-seller agents exceeding incentive receipts from airline suppliers. The consolidator was also facing pressure of unrealistic increase in Q-on-Q revenue targets being demanded by Airlines for following years.This was resulting in a significant adverse impact on the Consolidators ongoing business profitability.

Travel Value Add conducted a detailed analysis of the ticketed revenue and the resulting receipt of flown revenue of various Airlines. We were able to determine a noticeable and varying time lag between ticketed and flown revenue basis which airlines were settling PLB payments to the Consolidator. We also determined that the Consolidator Agency was overpaying re-sellers on account of the above timing mismatch.

Travel Value Add implemented a model to forecast flown revenue based on our domain knowledge of airline fare structures and proration techniques. This enabled the Consolidator Agency to forecast, to a reasonably high degree of accuracy, the expected receipt of flown revenue throughout the year. This further enabled the Consolidator Agency to accurately measure re-seller performance and make incentive pay-outs accordingly.

With accurate performance data at hand, the Consolidator Agency was able more effectively handle revenue target negotiations and improve probability of meeting and exceeding revenue targets, leading to improved and deeper relationship with airline suppliers.

Most importantly,Travel Value Add was able to deliver an increase of 1.6% (approx. 22%) of net airline revenue receipts by the Consolidator from Airline suppliers.