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Goss & Associates, LLC

Accounting Solutions for the Airline Industry

Goss & Associates - Airline Accounting
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OUR MISSION - Accounting Solutions for Legacy, Low Cost or Hybrid Airlines 

Provide consulting to  assist travel industry clients work through complex accounting and financial decisions. We are dedicated to building long-term customer relationships using quality analyses, recommendations, training, customer support, project management, departmental re-engineering and model development.  

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Passenger Revenue Accounting (PRA) – Background

Passenger revenue accounting can be divided into three periods: Paper, Semi-Automation and Transition.  In the beginning airlines issued paper documents (tickets) that included travel information.  To coordinate passing information between airlines they created an organization called the International Airline Transportation Association (IATA). 

When first introduced a paper ticket was hand written.  A ticket establishes a contract between an airline and a passenger.  The ticket is a document that includes a receipt (passenger coupon), accounting data (auditor coupon) and passenger boarding authorizations (flights coupons).  The original paper ticket used carbon to transfer information between coupons.  Airline passenger revenue accounting organizations did the accounting manually using the audit coupons attached to sales reports from selling locations and flight coupons sent in lift envelopes for each flight departure from boarding cities. 


The beginning of airline automation started when airlines began creating ticket records from the information that was hand written on a paper ticket using Computer Reservation Systems (CRS).   Airlines put printers at selling locations connected to CRS terminals to replace the hand writing of tickets.  The computer printed ticket was still a carbonized document with the same coupons.  With the increase of credit cards to pay for a ticket a credit card coupon was added.

Airline passenger revenue accounting organization began developing accounting systems.  These systems uploaded coupon data from airline CRS records provided through sale reports and lift envelopes.   If the CRS system did not have coupon information, PRA systems included functionality to capture/input the required data to create the missing CRS record.


Airline industry automation is always evolving.  Airline CRS have evolved into Global Distribution Systems (GDS) that may or may not comply with IATA standard ticketing records.  The airlines that use IATA standards to create ticket records have been labeled Legacy Airlines, while airlines that do not use IATA standard ticket records have been labeled Low Cost Airlines (LCC).


Airline passenger revenue accounting organizations began looking for third party providers for passenger revenue accounting systems.  These systems fall into three categories:

o   Purchase PRA Software from third party provider, run the software on the airline’s hardware and the airline’s PRA staff will do the accounting


o   Contract with an Application Service Provider (ASP) that provides PRA software and hardware while the airline staff will do the accounting


o   Contract with a Business Process Outsourcer (BPO) that includes PRA software, hardware and PRA staff

The Passenger Revenue Accounting Dilemma {MY OPINIONS}: 

  • Third party passenger revenue accounting system suppliers include some of the GDS’s providers and they may offer some or all of the PRA system choices.  There are also non GDS third party suppliers.  The dilemma is the ticketing record (IATA standard vs Non-IATA standard).   Most PRA system suppliers cannot handle both types of ticketing records.  GDS PRA system suppliers are limited to the ticketing record type their GDS creates: IATA standard or Non IATA standard.  Although there are some non GDS third party provides that can handle both ticket record types.  

  • Most Passenger Revenue Accounting system are based on IATA standard ticket records.  However, the passenger revenue accounting principles apply to ticket records that are not IATA standard.  The problem for non standard passenger revenue accounting systems is industry sales distribution systems are based on the IATA standard ticket records: IATA Billing Settlement Plans, Airline Reporting Corporation and ACH/IATA Interline Settlement.  If an airline GDS does not use the IATA Standard GDS ticketing record, the industry sales distribution systems cannot receive/use these ticketing records.   
Airline Pricing Model - Issues {MY OPINIONS}:

  • Airlines and DOT revenue statistics are a problem, as each airline has their own “pricing” and “reporting” rules. In my opinion, a free market model does not properly address the airline industry which is “unique”. I do not have a definition for “unique”, but the airline industry is both capital intense like manufacturing and price elastic like the service industry. I am not proposing we bring back the CAB, BUT the Western Airlines/Governments need to think outside the current “model Box”.   

  • A look at the China airline business model it is creating a new approach by incorporating both government control (capital investment) and a free market based on price competition between Chinese airlines should be looked at.  

  • I am not a strategist, but the accountant trying to understand what marketing is selling.  I try to put individual airline revenue reporting into perspective by comparing their statistics without having to make W.A.G. assumptions.   
  • As a commodity issue, what about the network carriers that are trying to compete with a “joint fare”?  For accounting, in my opinion, the IATA Ticketing Standards makes Interline possible.  Without it we would be back to unilateral airline billings – A nightmare of the first order.   Is interlining history, like the horse and buggy?  

  • There is more to consider than direct cost of third parties.  The current unbundled fare has created a complex audit trail.  Audits identify lost revenue.  The ability to identify lost revenue is both a system cost (system enhancements) and real revenue (rules are not followed, prices are wrong, etc).  And, this does not even address the strategic issues other than the “Garbage-In, Garbage-Out” which the accountant is responsible to explain.

Link to Passenger Revenue Accounting Sourcing Guidelines: Out or In: Sourcing Out or In.ppt
Background: What is outsourcing?
Components: Inhouse, ASP & BPO 3
Guidelines: Seven concepts 4-9
If you questions and/or concerns please email me at 

Our Consulting Approach: Define, Quantify, Analyze & Recommend
  • Research & assess current processes, procedures, systems, staff levels & skill sets
  • Develop baseline units of measure
  • Compare to industry norms
  • Evaluate options
  • Present findings

Our Experience:
  • Forty five plus combined years in the travel industry.   

Our Education:
  • MBA’s from the University of Detroit & the University of Tulsa and BA’s from Michigan State University. 

Goss & Associates, LLC