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Airline Fraud Report 2010

Time to stop the losses


The airline industry, already challenged by the worst economic crisis in a generation and a massive loss of business through the Icelandic volcano disruptions, is still losing millions of dollars to fraud.

A recent survey conducted by Deloitte on behalf of the International Association of Airline Auditors (IAAIA) revealed that fraud is costing each airline an average of US$2.4 million annually. Compared to the cost of the volcanic ash drama, this may not seem a large amount, but combined with the knock-on impact on customer loyalty through unchecked fraudulent practices, it can add up to a much more serious problem.

Our findings reveal that a third of airlines believe fraud to be a significant problem, and one that has increased in the past year. The results of the survey make intriguing reading for anyone working in the industry.

The biggest threat today comes from credit card crime, which was highlighted in a similar survey conducted by Deloitte three years ago. Organized crime, weak technology controls, and the lack of resources to monitor fraud were given as additional risk factors, with some airlines saying staff training was also inadequate.

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