Kenya Airways has moved to protect its revenue streams from exploitation by staff and external parties after an earlier audit flagged weaknesses in its sales management system.
The national carrier says in its latest annual report that it has created a new division to ensure its transactions are well priced and in compliance with its policies.
Revenue leakages were among the issues identified as hurting the company by a series of reviews in the wake of major losses that wiped out shareholder wealth.
“A new section was set up in revenue management to focus on revenue integrity which is a top priority for KQ,” the carrier said in the report.
“Its main objective is to implement processes and policies that fully protect KQ commercial revenues from internal and external violations.”
The company says the team’s major achievement so far has been the implementation of a new agency debit memo (ADM) policy which guides how airlines bill their travel agents.
Airlines bill agents for various booking, ticketing, sales and refund violations, including speculative bookings, overbooking and undercharging.
KQ says its new ADM policy has doubled the number of violations to 34 and has set up a process to ensure comprehensive detection, billing and collection of all identified violations.
The new policy lays out various charges to be paid by agents for various specific offences. Speculative bookings will be charged $300 (30,900) per passenger per flight.
Discounted special fares allowed to travellers who don’t qualify for the same will see travel agents asked to pay the difference between the fare charged and normal rates in the same cabin.
Other booking tactics designed to lower travel cost will also be penalised. A travel agent, for instance, will compensate KQ if it does not issue a new ticket to a traveller who delays his return if the original ticket causes the airline to incur a loss.
Credit: Business Daily