New services to cut costs, risks in aviation

By John Oyuke

The International Air Transport Association (IATA) has launched two services for airlines around the world to reduce costs and manage risks associated with credit card operations.

The IATA CreditCard Optimisation Service will reduce commission rates and service charges, improve speed and method of payment and create a single point of contract for all credit card negotiations.

The business negotiations will be based on complete audit of all credit card contracts of a participating airline and the results will be benchmarked against a proprietary database to identify gaps.

New agreements will then be negotiated with banks to bring greater savings.

Sharing data

This service is offered in co-operation with CreditCard Optimisation Ltd, back and front office cost reduction experts, who have achieved significant savings for the airline industry for the past 15 years.

The second service called IATA Perseuss is an online database, which allows airlines to legally share data about fraudulent credit card transactions. Payment card fraud is estimated to cost the airline industry close to $1.4 billion every year.

Identifying fraudulent transactions is critical to driving down costs. Currently, 40 airlines are using the service and already contributed over 800,000 data elements.

IATA has projected losses of the airline industry for 2008/09 at $27.8 billion and said it is committed to assisting airlines with solutions that will bring cost reductions while increasing efficiencies.