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COVID-19: Saving Millions by Consolidating Unused Airline Tickets

Introduction

The hot topic for the last year for everyone has been adjusting to the new realities for conducting business in a world facing the COVID-19 global pandemic.  While the business impact varied by industry, with airlines, hospitality and restaurants taking biggest blow, every person and every company has been impacted.  With new work-from-home requirements impacting all of Shared Services, the processes for travel, including bookings and expense report processing, took a direct hit with an unprecedented decrease in transaction volume.

In the mix of chaos comes opportunity.  For example, one of the many financial impacts to Corporations was the cost of unused tickets, where reuse or exchange was complicated by manual processes with the potential loss of millions of dollars related to trip cancellations and changes.  This research paper highlights how a Peeriosity member company designed new process to control the losses, achieving a net saving of more than a million dollars as a result.

Company Experience

A recent Peeriosity PeercastTM featured a global company with over $15B in annual revenue discussing their Travel Services strategy, and specifically their response to reduce the financial impact of unused tickets which resulted a million-dollar savings to the company.   

The company’s stated travel vision is to “Enable travelers to compete and win every day by providing safe, comprehensive, east to use, and cost-effective global travel solutions”.  Their mission statement is broken down into three components including achieving a best-in-class customer experience, driving savings and compliance, and expanding Travel Services’ global offerings and footprint. 

The opportunity addressed by the company’s Travel Services team was to create a better process for eliminating costs related to unused airline tickets.  In the pre-COVID-19 world, unused tickets were valid for one year, with stringent reuse requirements and a very manual process for reuse.  Post-COVID-19 the volume of unused tickets went up dramatically, with airlines waiving change fees including name changes, with the process remaining both messy and manual.  The solution developed was to consolidate unused ticket costs to one credit card per airline and use the credits for any future travel by any employee.  Considerations to address included potential employee or cost center dissatisfaction and confusion in the expense reporting process.

The project started by getting approval and alignment within Finance and with functional leadership.  Next, they negotiated with key airlines to consolidate unused ticket value to one credit card, followed by communicating the changes to impacted travelers.  The new process automated ticketing to use one credit card per airline, and when an employee travels they receive notification that the credits have been used and the associated pre-paid expense has been processed as a travel cost.

For details, Peeriosity members are encouraged to sign into the members’ area to view the complete presentation and listen to the recorded Peercast.

iPollingTM Results Review

The results from a recent Peeriosity poll created using the iPollingTM technology provide additional insight to how companies are responding to the impact of COVID-19 more broadly.  The first question in the poll asked Peeriosity member companies about how companies are handling business travel as restrictions for COVID-19 are relaxed.  For 53% of Peeriosity member companies, many employees have developed new ways of working without travel, with the expectation that travel levels going forward will be lower than they used to be.  An additional 42% see continued need for significant travel requirements, with the expectation that they will be cautious about ramping up travel to ensure employee safety, with a slow ramp up of travel expected.  Here are the details:

The second poll question asked about the impact for employees who are responsible for Travel Expense processing, and the primary changes, if any, that have been made to their work roles during the pandemic.  Responses were fairly evenly split, with 37% indicating their roles were partially shifted to other projects and work within T&E that needed attention, 27% indicating that their roles were partially shifted to other areas where additional resources were needed, and 26% indicating that there had been no significant changes.    

A few of the comments from members include:

  • We have also outsourced most of the activities of this area to our BPO partners with a corresponding reduction in workforce.
  • We have had our staff working on some project activities within our card functions but over the next few weeks we will be reducing the workforce in that team with some people coming off fixed term contracts which will not be renewed, and others will be redeployed to other functions within our Shared Services organization.
  • Like others, we have learned how to work effectively without travel, so suspect not only will we ramp up slowly, but we will also scrutinize where travel is necessary vs remote connectivity.
  • We had already reduced travel in recent years, so not a big change.

Closing Summary

The impact of the COVID-19 pandemic on businesses globally can’t be understated, with reductions in revenue and new requirements for how work gets done.  Responding to the challenges created by the pandemic can create new opportunities for cost savings.  For example, one of the large financial impacts was the cost of unused tickets, where reuse or exchange was complicated by manual processes with the potential loss of millions of dollars related to trip cancellations and changes.  A solution discussed in detail by a Peeriosity member company was to consolidate the value of all unused airline tickets to a single credit card, creating an efficient and effective way to maximize the value of the unused tickets.

What approach does your company take to maximize the value of unused airline tickets?  Overall what changes has your company made to business travel in response to COVID-19?

Who are your peers and how are you collaborating with them?

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“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

 “iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPollingTM.

Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here.

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