Airline Staff Travel Challenges : Solving with Automation

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This white paper attempts to analyze some of the major challenges faced by airlines in …

This white paper attempts to analyze some of the major challenges faced by airlines in
managing their airline staff travel requirements and possible ways to solve those
diffculties. It also gives an outlook on making staff travel administration far easier by way
of automation, using new-generation IT systems.

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  • 1. Airline Staff Travel Challenges: Solving them with automation White Paper by: Nancy Elsa Job, Business Analyst, iFly Sta Lob, IBS Software Services
  • 2. Introduction Sta travel privileges are one of the charms of the airline industry. The lower pay in the industry is often compensated by free or discounted travel options for employees and their dependants. Industry practices and labour laws almost mandate such perks for airline employees. However, sta travel management is one of hard-fought tasks in the industry. Feedback from airlines reveals that management of sta travel is a pain area. This white paper attempts to analyze some of the major challenges faced by airlines in managing their airline sta travel requirements and possible ways to solve those di culties. It also gives an outlook on making sta travel administration far easier by way of automation, using new-generation IT systems. IBS Software Services Pvt Ltd Airline Sta Travel Challenges: Solving them with automation 02
  • 3. The airline sta travel challenge As airlines start operations, the HR/sta travel team put in place a sta travel policy taking into consideration the region of operations, type of service o ered and the prevalent labour rules. Other parameters de ned in the policy are, years of service, employee grade or designation, that determine the eligibility of employees to free/discounted tickets (travel passes). Being an internal process, sta travel management is done manually in most carriers. To avail the perk, the employee needs to create a request, mostly paper forms, and forwards it to the sta travel department. The sta travel administrator manually validates the employee and veri es the eligibility from the records maintained by the sta travel o ce. The administrator then makes bookings for the employees, processes payments, issues tickets, manages refunds if any and requires to track these records. On a typical working day for a sta travel o cer who works in a manual paper world, these tasks can be quali ed as challenges. While manual processes may su ce for small or startup airlines with low employee strength, but as the airline grows, managing sta travel becomes increasingly di cult. Let us examine some of the challenges that airlines face in the management of their sta travel and look at ways to overcome these challenges. 03 Airline Sta Travel Challenges: Solving them with automation IBS Software Services Pvt Ltd
  • 4. Challenge 1: Overheads due to high manpower requirement in sta travel o ces and long cycle times – for identi cation & veri cation of employees, managing travel requests, booking tickets and maintaining requisite records. Studies reveal that for a 10,000 strong airline, a leisure or business travel request takes hours or even days to get processed, if the airline follows a manual process. For each request that moves to the sta travel department by means of an e-mail, fax or hard copy, the administrator needs to identify the employee and ascertain his/her eligibility from the employee records. This is a tedious task. On a typical working day, the average number of travel requests to the sta travel departments may be as many as 300 for a 10000 strong airline. Research shows that the sta travel department takes around 3 hours to 1 day to manually process a single travel request. And for a huge volume of requests the time taken and personnel e ort spend for administration is de nitely very high. Solution: Current web-based applications available in the industry help airline employees make their travel requests online from anywhere in the world. This eliminates the time to queue in front of the sta travel department. Automating the complete sta travel function in the airline, using these applications makes the processing of the request simpler, foolproof and much faster. Employee information and validation can be rapidly checked against HR data making the veri cation process fool proof and swift. The approval and booking processes can be as simple as a mouse-click. Overall, the lead time (from employee applying for travel, till issue of a ticket) can be reduced from days to a few minutes. IBS Software Services Pvt Ltd Airline Sta Travel Challenges: Solving them with automation 04
  • 5. Challenge 2: Management of sta travel policies, allocation of concessions to employees, and handling policy changes. Changing labour/industrial laws, new business requirements, new statutes can call for a change in sta travel policy. Deliberate misuse of the policy can also necessitate a policy change. New travel concessions need to be distributed correctly, properly announced and will need to be added to existing policies. Implementing all these changes in sta travel policies are di cult when done manually. When a new employee joins, the travel concessions have to be allocated to the employee based on his/her eligibility. Many airlines do not allocate concessions to employee until they have served a stipulated period with the company. Sta travel policies also comprise accrual of concessions based on service length or calendar year. Correct allocation of travel passes to all eligible employees thus becomes a problem that the sta travel department has to live with. This problem becomes more complex when all concessions utilized by an employee have to be tracked and account for the balance. This complex task is time consuming and prone to error. Solution: Technology is now a key player in solving the issues of airline industry. Management of sta travel policies can very easily be handled by an IT system that uses a “Rules Engines” which can capture all complex policy requirements and convert them into rules that can be tracked by the system. All the sta travel rules and regulations/stipulations can be loaded on to the software system as a onetime process. Once this is done, concessions can be allocated and distributed to employees and dependants based on the policy, with minimal e ort. Accruals are automatically done based on the employee service length or calendar year. This would mean that every employee’s concessions are recorded as it is allocated and updated as and when it is used for travel. Airlines can also ne tune their sta travel policies based on the system generated reports on sta travel patterns, which can be easily communicated to the employees. Automation can also limit the fraud that could happen in availing the employee concessions. 05 Airline Sta Travel Challenges: Solving them with automation IBS Software Services Pvt Ltd
  • 6. Challenge 3: Decentralized sta travel o ces. The airline may have a number of sta travel o ces located at di erent cities, worldwide. In a manual mode, it is extremely di cult to have a control on these decentralized sta travel o ces. Sta travel processes in these diverse o ces cannot be synchronized resulting in loss of time, e ort and costs. Solution: A new-generation IT system can provide centralized administration for all the sta travel o ces occuring worldwide. This means that the administration can be done from a single point which re ects in all other o ces. This can result in signi cant reduction in overheads for the airline. Challenge 4: Tracking utilization of concessions & management reports for audit. In a manual or semi automated process, it is very di cult to maintain accurate records of all sta travel, which in turn makes it hard to get the right reports in time for audit. Towards the end of each working day, the sta travel administrator has to send various reports like reconciliation reports, daily sales volume reports and cancellation reports to the Finance department and to the management. There can be situations like at the last minute of the day before a vacation, the management asks for a detailed report on sta travel bookings during that vacation period. As these records may be scattered across many di erent sheets it is really hard to trace these sta travel records in a short time. It is worse during an audit or when assisting in the investigation of fraud when the sta travel manager and his team have to go through tons of documentation to meet the requirement. Solution: A centralized and automated solution for sta travel management will ensure the availability of all the relevant data at a single place. The automated system will keep track of all activities made through the system, which enables the administrator to get any speci c real time report on sta travel. Automated audit trails also reduce e ort and costs of investigations. MIS reports generated through the system helps management to analyze sta travel patterns to ne tune the policies that govern sta travel. IBS Software Services Pvt Ltd Airline Sta Travel Challenges: Solving them with automation 06
  • 7. Challenge 5: Form of Payment (FoP). Form of payment is another challenge for the airline. The employee may pay for their tickets in di erent ways like cash, credit card or payroll deduction. Collecting cash from employees would mean that the airline has to bear the additional overhead of having a cashier to process payments. Payroll deduction comes with a lot of overheads – having a cut o amount for payment, a date until when the employee can make a payment using payroll option, reconciliation, refunds, and transfer of data to the nance/payroll system. If an employee uses a credit card, the airline has to bear an additional 1.5% to 2.5 % of the amount towards fees to the credit card provider. So in addition to the extra cost involved, these forms of payment, veri cation and processing are really cumbrous for the sta travel, revenue accounting and nance departments. Solution: Airlines can replace the di cult and costly payment methods such as cash and credit cards with other options which have only a nominal transaction charge. UATP payment option is a good example. UATP is airline owned global payments network which provides an inexpensive form of payment for all airline employees, retirees and eligibles entitled to concession travel. With this kind of a payment option, the payment and veri cation process can be made simpler and easier with minimal or negligible cost and e ort. 07 Airline Sta Travel Challenges: Solving them with automation IBS Software Services Pvt Ltd
  • 8. Bene ts to the airline Guaranteed ROI Saves e ort & improves productivity Can be easily integrated with airline’s existing IT environment Table1: Airline bene ts from automating sta travel management Anytime access, reliable and predictable Easy and quick payment options Online credit/debit card payment Reduces e ort, increases predictability, lowers stress Table 2: Employee Bene ts from automating sta travel management Conclusion: IBS Software Services Pvt Ltd Airline Sta Travel Challenges: Solving them with automation 08
  • 9. IBS Software Services (P) Ltd. 5th Floor, NILA,Technopark Campus Trivandrum 695581, Kerala, India Tel: +91 471 2700080 iflystaff@ibsplc.com IT Solutions for Travel, Transportation and Logistics www.ibsplc.com/iflystaff ATLANTA | BANGALORE | BOSTON | COCHIN | DENVER | DUBAI | HONG KONG | LONDON | ROTTERDAM | SYDNEY | TOKYO | TRIVANDRUM