Turning airline payment challenges into opportunities

Airline Payment Ecosystems as a Driver of Growth

Our report explores the role of forward-looking payment strategies, including Payment Orchestration, in making airline operations more efficient, paving the way towards cost savings and increased profitability. It also addresses the challenges airlines commonly face, including payment challenges like the availability of alternative payment methods (APMs), reconciliation and reporting issues, and struggles with dynamic currency conversion.

For example, 38% of surveyed airline professionals cite complex reconciliation processes as their foremost challenge, on par with route network expansion, whereas airline revenue managers are more concerned by a lack of flexible payment options than the survey average (25% vs 21%).

The airline industry association, IATA, predicts that net profit margin industry-wide will be 2.7% in 2024, a slim 0.1% increase over 2023, despite a projected revenue growth of 7.6%. This means that increasing operational efficiency is the only viable way for airlines to drive bottom-line growth. Optimising payments is an opportunity for airlines to increase their margins – the industry currently spends over $20 billion on payment costs, or about 3% of airlines' total revenue and 78% of the industry's net profit.

Payment Orchestration allows airlines to identify areas for improvement and more efficient back-office operations. More efficient payment processes can help airlines reduce costs, with those reductions flowing directly to their bottom lines.