Step 1: Create a Profit & Loss Report by airline
As with any battle a reconnaissance team goes in to find out the lay of the land first, this is our starting point for this project. This step gives us a clear understanding of where we stand and will give us guidelines on where we need to go. The first time you do this exercise I can assure you it is going to throw up some very interesting information that will surprise you, even if you are a 25year veteran of this industry. The numbers which are based on facts will tell their own story. So prepare to be surprised and at times shocked if you have never done this before. Regardless of what the numbers say, it will give you some excellent ideas on how to proceed towards that 3% or higher increase on margins which is our target from this guide.
Export that to a spreadsheet so that it looks like this:
So let’s begin with a very simple first step.
Collate all the airline sales you did for either the last full year of sales or say the past 12 months. If as we are currently in COVID times this skews the picture, pull out data for say January to December 2019. This is the baseline 12 months on which you want to build your future plans. So whatever set of numbers you feel will give you the full picture should be used. This should be relatively easy to pull out from your mid-office system. What we are looking for to start off with is a report that shows you the airline name or airline code, gross sales, standard or upfront commission % and the commission amount.