🇺🇸United States

Unrecovered Revenue from Interline Billing Discrepancies and Over-billings

1 verified sources

Definition

Airlines fail to bill other airlines (OALs) for utilizing host airline’s scheduled services and lose revenue from interlining carriers due to undetected over-billings. Errors and fraudulent activity on ticket bookings and discounts go unchecked, preventing recovery of owed money. Discrepancies such as unreported sales and itinerary mismatches occur due to inefficient coupon matching and proration processes.

Key Findings

  • Financial Impact: $Multi-million annually (industry-wide, recovered via contingency fee audits)
  • Frequency: Ongoing across ticket lifecycle - recurring with every interline transaction
  • Root Cause: Manual processes, lack of automated auditing, and poor integration of sales/usage data leading to discrepancies throughout the revenue lifecycle

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Airlines and Aviation.

Affected Stakeholders

Revenue Accountants, Interline Billing Specialists, Audit Teams

Deep Analysis (Premium)

Financial Impact

$1-3M annually per airline (undetected fraudulent charges, billing disputes that go unresolved, regulatory penalties for poor audit controls) • $100,000-$1,000,000 annually (interline cargo overbillings; undetected surcharge misallocations; revenue recognition delays; fraud on special handling fees) • $100,000-$800,000 annually (corporate interline revenue leakage; delayed payment disputes; accounting period close delays)

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Current Workarounds

Batch reconciliation via Excel; sample-based error detection; write-off of trivial discrepancies to expense; informal partner airline relationships via WhatsApp • Cargo operations manager contacts TMC AR team via email for cargo charge breakdowns; manual spreadsheet reconciliation against historical cargo pricing; disputes escalated via phone • Cargo revenue specialist maintains manual Excel tracker of interline cargo billings; reconciliation against weight manifests and pricing schedules done manually; email follow-ups with partner airlines

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Idle Processing Capacity from Manual Ticket Reconciliation Bottlenecks

Reduced processing efficiency pre-automation (20+ airlines deployed fixes)

Revenue Leakage from Unbilled Refunds and Fare Authentication Failures

$Strategic revenue recovery required (quantified via real-time dashboards pre-solution)

Delayed Revenue Recognition from Slow Sales and Usage Data Reconciliation

Improved cash flow post-automation implies prior multi-month drags (industry standard)

Systemic IROP compensation and refund payouts after mass disruptions

$400M–$500M per severe event for a large US carrier; multibillion-dollar annual impact at industry level

Excess hotel, meal and ground transport spend during IROP rebooking

$10M–$50M per year for a large carrier; e.g., one US airline disclosed hundreds of millions of “disruption-related expenses” in a single quarter including lodging and customer care

Free rebooking, fare waivers and involuntary downgrades eroding revenue during IROPs

Hundreds of millions of dollars per large carrier annually in waived change fees, fare differences and downgraded revenue; industry-wide impact in the low billions per year

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