Unused Ticket Management Strategies for Asset Recovery
Travel managers have always played a critical role in managing and recovering unused ticket assets held by their business, but after Covid-19, this role has never been more important.
With millions at stake for some corporations, being able to define, manage, and recover unused ticket funds during the Covid-19 pandemic is paramount for any company that engages in travel for business. The industry has never seen such a large volume of assets to manage. As reported by BTN recently, many companies are reporting up to a million dollars in unused tickets.
The very first step should be to have a detailed inventory of the fully reimbursable tickets. These can be identified based on airline fare rules.
Robust buying and inventory practices become even more critical with the unprecedented number of unused tickets and changes that have taken place in recent times.
Here are key strategies for achieving the highest possible recovery of airline ticket assets.
1. Review of refunds
Airlines must refund many tickets in response to travel restrictions and cancellations. When reviewing unused ticket credits, the idea is to validate airline exemptions and extend expiration dates for unused tickets.
Also, by clearly identifying tickets that are available for refund, these can be requested where applicable.
Some carriers limit the ability of travel management companies to process refunds. To avoid confusion, it is best to maintain visibility at all times through a well-maintained refund report.
For those refunds processed directly by an airline, it’s better to monitor credit card statements carefully. Travel administrators can review the status of refund processing for all carriers on the ARC website.
2. Review the use policies and tools for travelers
Review your unused ticket summary and determine their eligibility for credits to be used through online tools. For example, if there are outstanding unused ticket credits for released employees, reapplying those funds may be better by working directly with an agent rather than using an online booking tool. Based on this, you can determine whether access to the online tool should be restricted until the funds released from employee tickets are fully used. Clearly communicate your company’s post-covid19 ticket reuse policy and any workflow changes within your online booking tools to employees.
Make sure to provide reuse options by offering automatic re-application of unused tickets and/or by requiring users to apply for credits during the online booking process whenever possible. Additionally, quality control measures will flag new reserves where credit may have been available and was not applied. This can then be diverted to an agent to apply for the credit.
3. Take advantage of UATP cards
If your company has a direct relationship with an airline, you can apply for a UATP where the airline will transfer your company’s ticket credits, minus fines, to a virtual credit card, making it quicker to reuse non-refundable tickets. These funds can be applied as a form of payment for new reservations for specific operators.
A clear advantage of the UATP card option is the ability to use the funds for any passenger traveling, rather than strictly for the original passenger.
Take special note if your internal accounting practices allow it. Organizations that bill or charge for travel to specific projects or clients may find this application difficult to document and audit.
4. Look for name changes
Most companies have experienced personnel changes during the current crisis and many companies now have airline credits issued for employees that have been furloughed or laid off. A UATP card can alleviate the manual and laborious process of managing name changes for individual credits. If you have unused credits not captured by UATP cards, companies can negotiate directly with the carrier to transition the corresponding tickets to coupon credits. Additionally, you or your TMC can contact airlines directly to reissue credits under a different name pursuant to the name change policies for each ticket. In fact, many airlines have relaxed name change restrictions and penalties in recent months.
5. Document losses
Report any unused non-refundable tickets that expire or could expire to your finance team, as there could be a potential tax benefit to recognizing the lost value. Full documentation should be included that the ticket can no longer be used for a potential tax write-off.