TRX OP-ED On Ancillary Fee Tracking
Posted by Tom Tulloch on Wed, Aug 03, 2011 @ 12:48 AM
With billions of dollars in play, the data-driven approach is the preferred approach to ancillary fee tracking and reporting.
Upon reviewing AirPlus’ new Ancillary Fees reports, we would simply like to say “imitation is the sincerest form of flattery”. We believe their approach validates the methodology we’ve followed for a few years now with our Data Intelligence solution, TRAVELTRAX® which follows the premise that the corporate card, not the expense tool, is the preferred method for accurately identifying and tracking airline ancillary fees, given the current level of reporting by airlines.
While we applaud AirPlus’ championing of our methodology, we believe their approach, which as reported relies heavily on assumptions, has some significant limitations. We recognize AirPlus has deep insight into their AirPlus Corporate Card data, however, the scope and complexity of airline ancillary fees demands a solution which encompasses multiple corporate card fees, TMC, GDS data, and direct connect links for it to be truly classified as “cracking the code”.
As we all know, the lack of uniform reporting of charges, either from the airlines, GDSs or the corporate cards, is the primary obstacle to accurately identifying airline ancillary fees. Purchased across multiple points of sale with multiple methods of payment, charges are reported in any number of formats and are constantly being modified, combined or changed as airlines seek new and varied revenue sources.
I think this can be best illustrated in a real life example: A traveler purchases an airline ticket via their company’s online booking tool using a Ghost Card through their TMC as the method of payment. While at the ticket counter, the traveler pays cash to check a bag on the flight, also at the airport they purchase a club pass and while on the flight they purchase internet access both with their Corporate Card. Reporting on these fees requires the ability to analyze data from multiple sources and forms of payment, encompassing TMC back-office, credit card, data and corporate expense reporting data
While AirPlus can accurately analyze data from their systems, there is no guarantee that, the analysis applied could be reused with other card issuers with the same success. With billions of dollars in play, there’s no room for assumption-based approaches in ancillary fee tracking and reporting. This is where our approach differs.
Admittedly, until there are reporting standards in place, making assumptions will always be part of the solution to provide corporate buyers with better insight into ancillary fee spend. Our goal is and has always been to limit the amount of assumptions needed to provide the most accurate view into ancillary fees.
That’s why, over the years, we’ve developed a unique set of algorithms used to categorize spend data, through routinely and systematically analyzing corporate card transaction data and spend indicators which we tie to spend categories from more than 20 major card issuers around the world. As a matter of fact, in 2010 alone TRX processed and analyzed over $35 billion in T&E spend driven by 160 million credit card transactions of which 80 million where related to airline fees and ancillary purchases.
We further strengthen the accuracy of our analysis by integrating additional tools, such as our credit card matchback travel utility. This utility compares a company’s credit card spend with their agency’s booked data. Through this additional data filtering, TRX can eliminate agency fees, promotional fares and exchange fees. We can also identify the point of sale which is often a determining factor in how airlines record many of the routine ancillary charges. Without such identification, ancillary fee matching based on assumptions alone, can yield inaccurate and inconsistent results.
By combining multiple data references with our unique data analysis and reporting solutions, we believe TRX is the only company that provides corporate travel managers with true and accurate visibility into their airline ancillary fee spend, providing suppliers spend information they can leverage in contract negotiations. While we do leverage “assumptions” to make determinations where data is absent, we’ve found those instances to be infrequent and rare, given the sheer volume of data we process. For example, without giving away our trade secrets, we can 100% of the time identify Delta’s first bag checked fees, even though it’s been reported that Delta does not provide that data. This and other examples are overcome with TRX’s unique approach, which at its core is based on a simple premise – “more, accurate data means less assumption making”. With billions of dollars in play, the data-driven approach is the preferred approach to ancillary fee tracking and reporting.