How Cathay Pacific & Accommodations Plus International partnered to transform Cathay Pacific’s crew accommodation process

Transcript

Vivian Dsouza:Good morning, everybody. So a lot of conversations today have focused on the commercial side of the business, have focused on the aircraft itself, but you know what we are going to talk about is something a little different. We're going to focus on the crew, the people who get us safely and make sure our journey is actually one of happiness. My name is Vivian Dsouza. I am representing Accommodations Plus International, in short API, and with me I have industry colleague and good friend Jason Pearson from Cathay Pacific.

Jason Pearson:Oh, thank you. I think you did a pretty good job introducing me. So I support all ground experience, so a lot of ground services, but I also take care of the crew accommodations with the help of our partners at API.

Vivian Dsouza:Yeah, so we're going to spend some time talking about how our organizations partnered and transformed the crew accommodation process. So this all started back in 2017 when the 2 organizations came together. Jason, why don't you talk about Cathay Pacific to start with?

Jason Pearson:Well, I hope that everyone in this room has heard of Cathay Pacific and hopefully you've flown Cathay Pacific to get here. So basically it's 200+ operations. That's the Cathay brand with our smaller affiliate Hong Kong Express. So we have a network of over 80 destinations, and those 80 destinations employ 4,000 pilots and 12,000 crew members.

Vivian Dsouza:And API is— or Accommodations Plus International is the largest provider of crew accommodation SaaS and services. Today, we serve over 100 airlines across the world. Every day or every night, we house over 41,000 crew across the globe and manage a customer spend of about $4.3 billion. Now, what this means is our experience allows us to streamline the entire process of crew accommodation end to end. Now, as I mentioned, the partnership between Cathay and API started back in 20— sorry, in 2017. And the main focus of this was to automate and enhance and digitize and innovate the entire crew accommodations lifecycle. Now, what Cathay were looking for was for a partner to actually take on the entire process, starting from sourcing of the accommodations and the destinations, all the way until the invoice reconciliation and actually closing the payment to the hotels and ground transports itself.

Jason Pearson:So if I can add to that, I think that you really hit the nail on the head where we were really looking for somebody that was going to look at the market, what the Cathay requirement is, do the sourcing, go out to the market, review the market, and eventually do the contracting. So it was really end-to-end sourcing and contracting. And we really do this through a balanced approach, and we meet on a quarterly basis, and we're looking 6, 12, 18 months out as to what the requirements are, what the markets are, and how our needs are going to shift. And if we miss a quarterly meeting, I think Vivian and his team, they're kind of on top of us, and we really kind of keep an open dialogue because things are always changing as far as the crew accommodations. I know I heard a lot about new routes, adding routes. Our COO, Alex McGowan, talked about Different growth, new markets. So, we're always kind of looking at what the crew accommodation is going to be, and the plan is always done, but it'll change during the course of the time. We talked a lot about net promoter scores too with our customers, which is a huge, huge, huge focus at Cathay, but it's also important for the employees to have a proper work environment and a proper crew accommodation as a part of that environment. So, when we look at the balanced approach, it's also very important that we look at the crews are satisfied with the overall crew experience, and the crew accommodation is a big part of that. So, the partnership right now, we have 75 destinations that are supported by API. So, that's 112 contracts. So, that's what we call ground transportation, getting to the airport, to the hotel, and also the hotel contracts. A staggering 45,000 room nights per month. And then we've achieved about 16% savings on the various initiatives that we've had. I'm the guy with the paper. Maybe Vivian, if you want to talk a little bit about digitization and the ACIS, you're probably better suited for that than me.

Vivian Dsouza:So a big part of managing these stats seamlessly and actually achieving these results is the fact that we at API have actually managed to digitize the entire process. Now, to give you an idea, we automate about 200 daily transactions which would otherwise require people in the ops control or the crew control room to manually make these changes, emails, telephone calls, fax, you name it. And an interesting result is in 2024 to date, we have not had a single invoice that has been rejected by Jason and his team and sent back to us saying there's a discrepancy over here. Now, how do we achieve this? At the centre, at the heart of the entire picture lies ACIS. ACIS is our centralised system that handles the entire crew accommodations process. Now, it doesn't work in isolation. ACIS connects with Cathay Pacific's crew planning system and their crew tracking or crew control system and helps do everything from looking planning rooms, allocating rooms to crew, reallocating rooms if required, handling last-minute changes. This basically ensures that the entire process is seamless. And then coming to the crew themselves, MyCrewCare is the mobile app which empowers the crew to have real-time information on who's their hotel, who's their ground transport, are there changes on the last minute, are there disruptions happening and how are they going to be taken care of. Is there feedback that the crew wants to send back to crew control because they're either very happy or absolutely disappointed? All this, again, no human touchpoint, completely digitized. On the financial side, we have the e-invoicing application, which is one of the key requirements because that's where, that's the system that controls the money. What does e-invoicing do? It helps track every single expense down to the trip level, each charge at the trip level. Now it pulls data from ACIS, checks that, and sends it over to the hotels to review. And only after that check and balance has completed does it send it to Cathay directly into their own financial ERP. So net-net, it's a completely digitized process which ensures that you have full control, full visibility, And the airline is the master of the entire process.

Jason Pearson:So what we've done so far and what we're doing today and looking ahead, we talked a little bit about mitigating the total accommodation costs. So we do look at the market, we review our options. So we've done some— we've had some pretty successful sourcing and contract initiatives from that perspective. Definitely improved operational visibility. So, on top of the procurement bit, which is kind of my focus, we have a weekly call. We discuss about issues, wake-up calls, pilot complaints at the hotels. So, it's not just the sourcing and the contracting, but it's also the operational visibility and, once again, how we help the crew experience at the hotels. Definitely contract leakage. When we look at signing contracts, I know a lot of companies are notoriously bad where they'll sign a contract and they put the contract away and they forget about it. But managing the contract, understanding the terms and conditions, paying the right rates, all very important. I think that we're very much airtight from that perspective with this partnership. And looking ahead, so we've talked a lot about AI and what that's going to do in the future, and I think that we have a lot of tools with respect to our crew planning. We have our contracts and we have our hotel requirements. And I think it would be kind of interesting if we can kind of look at AI on crew planning, and we'll get into a case study just after this on how we can look at what the requirement is and how we kind of put that in our contracts going forward with respect to our crew rotations.

Vivian Dsouza:Yeah, and again, we are not lost with AI. The system already incorporates functionality that, you know, looks at historic trends, recommends that, hey, even though the airline doesn't know that they need a room, They do need a room. So we tell them that your crew is not going to be without a room for the night.

Jason Pearson:So case study on this. So in San Francisco, we have a daily flight. We're going to be increasing capacity next year. But we had safety concerns around the hotel. And the crew was kind of uncomfortable going out at night. And it really made for a poor crew experience. And so we had the ability to terminate the current contract with the notice period for safety concerns. And so, with the support of API, we kind of relooked the whole market. We looked at our options. Do we want to go to a different area? Do we want to stay in the same area? Do we want to go by the airport? So, we kind of looked at different options, and I think the outcome was pretty positive where we were able to kind of improve the layover experience, move into a different area. Some people know the Wharf area in San Francisco, so it was a very kind of iconic San Francisco crew experience. We were able to save costs by leveraging the market and also through some AI where we didn't really need to have— we had an early arrival fee and we were kind of sensitive to that, and the hotel wasn't necessarily sensitive to charging us that fee. And so I think that through working the technologies that API had, we were looking at our crew rotations, at our hotel requirements, and we were able to establish what the requirement was. So we had a saving by properly restructuring the contract, leveraging the market, and I think also we were able to improve the crew experience, which was— now we have a very iconic San Francisco crew experience, and it's done in a safe environment, which is really Kind of the basis for Cathay is safety, safety on the aircraft and a safe crew experience.

Vivian Dsouza:Perfect. So, you know, we are always excited about what's coming next. It's a space where Cathay and API will continue to collaborate, work very closely into the future. And on that note, thank you very much for your time and attention. Jason, thank you for supporting me on this.

Jason Pearson:Thank you. Appreciate it.

Vivian Dsouza:Cheers, everybody. Cheers.

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