Ref.: EG17-014/94162 / From: Ewa Grabiak
To: Members
Members of Air Matters Committee
Date: 8 May 2017
Re: ADM Working Group Meeting, 26-27 April 2017, Madrid- Report
Introduction
Juan Antonio Rodriguez (Director of FDS operations, IATA) opened the meeting and highlighted that the reduction of costs associated to ADM process is the main target. There is a clear roadmap settled at previous meetings in Geneva, setting up clear objectives to be reached in next 2 years. For the time being, IATA noted small improvements, reductions start to appear.
1. 2016 Data Update
- Volume & Value
IATA presented 3 year’s comparison of ADM global data. The average value per ADM dropped (2014: 236.5 USD, 2015: 251.7 USD, 2016: 213.3 USD), whilst the volume of ADM has increased exponentially. The significant increase in global ADM volume in 2016 is mainly due to the inclusion of BSP China data (in 2014 & 2015 this data was not available). The average cost of ADMs in BSP CN is 44.5 USD – that is the reason why the significant increase in volume did not bring up the total value of global ADMs and we are at a consistent 2.35-2.4M comparing 2015 to 2016.
- Geographical Trends
In 2015 Brazil was the top country due to the high cost ADM there, in 2016 it was Venezuela. At the EU level, BSP GB and DE are high on the list.
- ADM Category
When it comes to ADM category, the largest category remains the commissions, taxes and refunds.
- Figures for 2017 are as follows:
Month / Year-on-year Comparison / Q1 Variance / Average Cost per ADM (USD)2015 / 2016 / 2017 / 2017/16 / 2015 / 2016 / 2017
Number of Records / January / 187,386 / 197,741 / 180,000 / ↓9% / 191 / 199 / 205
February / 179,553 / 187,004 / 183,378 / ↓2% / 216 / 206 / 212
March / 183,559 / 206,929 / 216,095 / ↑4% / 233 / 222 / 215
Q1 / 550,498 / 591,674 / 579,473 / ↓2% / 213 / 209 / 211
Total ADM value (USD) / January / 35,804,931 / 39,299,039 / 36,856,374* / ↓6%
February / 38,757,687 / 38,512,153 / 38,960,147 / ↑1%
March / 42,756,054 / 46,001,104 / 46,397,367 / ↑1%
Q1 / 117,318,671 / 123,812,296 / 150,747,790 / ↓1%
2. KPI and Solution Update
Four main objectives were determined by the ADM WG:
- Improvement of the communication: The main problem pointed out by the Group was the fact that GDS could not reply via BSPlink. Based on ADMWG requirements: IATA created a mock-up in BSPlink test environment. The tool includes GDS in Comments loop once forwarded to GDS. GDSs can attach files visible to both Airlines and Agents and it is possible to follow the chronologic order of discussion (See BSPlink Enhancement section).
- Auto-categorisation of ADMs: This development started last year, but due to the complexity in introducing whole new processes and system logics into the system this has taken a considerable amount of time in creating the interface and testing the logic, etc. The main target is to allow Airlines to upload their own ADM Reasons to BSPlink.
- Commission Control Repository & Self-Service Update: The main target is to provide Airline users with online template to add, modify and terminate any Commission Control setups in a BSP on one hand. On the other hand, the goal is also to provide Agent users with the ability to query and download Airline’s Commission Control setups in a BSP, subject to holding Ticketing Authority for that Airline.
- Credit Card Acceptance Chart:
a) Provide Airline users with online template to add, modify and terminate any Payment Card acceptance setups in a BSP, and load Payment Card Acceptance setups through pipe delimited files.
b) Provide Airline users with the ability to query and download their own Airline Payment Card Acceptance setups in a BSP.
c) Provide Agent users with the ability to query and download Airline’s Payment Card acceptance setups in a BSP, subject to holding Ticketing Authority for that Airline.
d) Provide GDS users with the ability to query and download Airline’s Payment Card acceptance setups in a BSP, for all Airlines participating in that BSP.
e) Provide GDS users with adhoc flat files that are sent from BSPlink to notify the GDS whenever there are changes to an Airline’s Payment Card acceptance in a BSP.
- Credit Card Chargeback Evidence Guideline: Draft guidelines (See Annex 1).
3. Global ADM Market Research – Update
The campaign started in 2016 and is still ongoing:
a) Travel Agents:
- 925 responses were received from Travel Agents.
- According to TA, the average administration cost for ADM is of 46,6 USD.
- Preferred method of communication with GDS: Email for 86%, BSPlink only for 34%.
- Preferred method of communication with airlines: Email for 86% and BSPlink for 57%.
- Rating of communication with the Airlines regarding ADMs: 4/10.
- Rating of Agent- Airline relationship on ADMs: 4/10.
b) Airlines:
- Only 58 responses were received.
- Only 7 out of 58 were able to provide the ADM cost.
- Rating of Airline-Agent relationship on ADMs: 6/10.
- In case an ADM is related to auto-priced transactions, 78% of Airlines would be willing to engage in direct dialogue with the GDS.
- Airlines’ preferred method of communication with GDS and Travel Agents remains Email.
4. Work Session on Chargebacks – Presentation by Mrs Julie Berteloot
The presentation focused mainly on prevention and settlement of chargebacks. Chargeback is basically the situation, where the customer contests the transaction paid by his credit card. The classic example of a chargeback is when a client contests the purchase of the ticket, for the reason, that he bought the ticket from the travel agent and the credit card statements contain the name of the carrier.
There are 3 important elements in chargeback lifecycle:
- Filling Claim- when the passenger decides to contest the transaction.
- Compelling evidence: Participants shared their ideas regarding the compelling evidence. For instance, providing the proof that the passenger contests the purchase of the ticket, but do not contest purchases made at the airport, proof of agreement to conditions, keeping historical data on flights, providing proofs that the passenger left a review on social media.
- Final decision by the bank
5. Priorities for 2018
- Airline Dynamic ADM Policy & Online Correction Module
- Freeze latency period once ADM is “Forwarded to GDS”
- Validation of last date of travel in RTDN
- Best Practices for Churning Prevention: Need to have a standardised definition.
6. Working Session – ADM Process
The main issues discussed by the working groups were:
- If there is no agreement between the airline and the agent, the uploaded documents are not valid anymore. This should be clarified.
- Include a chronological order in BSP communications.
- Include email addresses of the person in charge on each memo.
- Whenever there is an update in the ADM policy, an email alert should be sent to agents.
- Need to develop a policy for customer’s behaviour based ADMs (for instance no show of the passenger).
The participants also shared their best practices:
- United Airlines sends a list pre-check of all operations to agents before issuing ADM and give 5 days to review the list.
- Hahn Air sends additional email to agent when ADM is disputed to make sure agent is aware that ADM is being disputed.
7. BSPlink Enhancements – Test
The groups (airline/agent/GDS) were given access to a BSPlink template and discussed improvements, which are now being implemented:
Picture 1: Desktop
BSPlink has been adapted to handle Post-biling Disputes.
Picture 2: Category ADM Pending Settlement – Possibility to download documents
Picture 3: ADM Pending Settlement
Picture 4: ADM Pending Settlement – Possibility to forward the ADM to GDS
Picture 5: Exchange of communication between the carrier, agent and GDS (possibility to attach documents)
8. ADMs’ & NDC – (See the PPT presentation)
The following questions were asked to participants:
- In an environment where all sales are NDC, which types of ADMs will no longer exist?
The participants pointed out in particular ADMs for fare constructions, invalid price, exchange& refunds.
- Which types of ADMs will still exist?
ADMs based on churning (multiple bookings), chargeback.
- Will there be new types of ADMs that don’t exist today?
The question of the PNR ownership was raised in this respect.
- What changes to standards will be required to ensure that there is complete transparency for airlines, systems and agents?
Compliance with the EU Data Protection rules and compliance with the Competition rules.
Annexes:
- Annex 1 - Credit Card Chargeback Evidence Guideline
- Annex 2 - PPT presentation ADM Working Group Meeting 26-27 April 2017
- Annex 3- ADM Best practices – Document prepared by the ADM Sub-group