Photo of Manoj Dugar, J.P. Morgan collects the award on behalf of Hong Kong Airlines.
This airline worked with a new banking partner to implement a multi-currency pricing (MCP) FX solution across its web and mobile app platforms. By establishing connectivity with the bank’s FX platform through an application programme interface (API), live FX rates are fed directly into HKA’s internal booking engines providing an improved user experience.
Established in 2006, Hong Kong Airlines (HKA) is Hong Kong’s second largest carrier, flying to nearly 40 destinations in Asia Pacific and North America. The firm operates one of the youngest fleets globally and has been voted as one of the world’s top 20 airlines by Skytrax in 2018.
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Multi-currency pricing FX solution accelerates expansion plans at this airline
Since 2016, Hong Kong Airlines (HKA) has embarked on an ambitious growth plan focused on intercontinental expansion in a bid to transition from a regional carrier to a global airline. Part of that plan was to improve its ecommerce platform and back-end ticketing infrastructure, to support the increasing volume of tickets sold via its website and mobile app.
To upgrade its ticketing infrastructure, HKA appointed a new global merchant acquirer to improve processing efficiencies. At the same time, it also needed a new banking partner that could help better manage increasingly complex cash management processes as the result of its global expansion. Key concerns included:
Lack of transparency in payment transactions involving FX – customers did not have the option to see the actual exchange rates at the time of ticket booking in cases where foreign credit cards were used to pay for the air tickets that are billed in the country of travel origin.
Reconciliation of its growing volume of collections across multiple currencies.
HKA worked with new banking partner J.P. Morgan to implement a multi-currency pricing (MCP) FX solution across its web and mobile app platforms. By establishing connectivity with J.P. Morgan’s ACCESS® FX platform through an application programme interface (API), live FX rates are fed directly into HKA’s internal booking engines. This improved transparency on the front end as customers now have the flexibility of viewing and selecting ticket prices in their preferred currency (either in their home currency or credit card billing currency), providing clarity in conversion rates in real time.
The solution empowered HKA to internalise the currency conversion process previously handled directly by customers’ credit card companies. With better control over spreads, the FX solution has allowed the carrier to offer tickets to customers at more competitive prices.
At the back end, HKA deployed J.P. Morgan’s innovative cross-currency sweeps solution. The solution enables the firm to leverage a single USD header account that converts funds into foreign currencies to cater for any service fees, refunds or chargebacks on credit card proceeds charged by its merchant acquirer. The automated solution significantly reduces FX risk by eliminating the need to maintain multiple non-functional currency accounts.
HKA successfully rolled out the MCP solution on its mobile app and website in November 2017 and July 2018 respectively. The powerful solution has enabled HKA to automate the processing of nearly 500,000 online sales transactions across 300 currency combinations per day, and delivers a more transparent and convenient experience for customers.
Best practice and innovation
The end-to-end solution is one of the first for a Chinese airline and has empowered HKA to expand its business and ecommerce strategy into new international markets. The firm has witnessed a significant boost in online ticket sales since the initial implementation of the MCP solution on its mobile app platform in November 2017.
“Powered by API, the MCP solution enables air tickets to be priced directly in the customers’ preferred currencies. By controlling currency spreads on transactions, we are now able to offer tickets at more competitive prices. To support the upgrade, we also deployed a cross-currency sweeping solution to automate the complex settlement and reconciliation of FX transactions,” says Jacky Luo, CFO.
Improved customer experience.
More competitive prices to customers as a result of better FX spreads.
New revenue streams with flexibility in managing its own FX transactions.
Straight through processing of end-to-end FX management and reconciliation.
Lower FX exposures by reducing the need to maintain non-functional currency accounts.
Automated reconciliation and settlement of credit card transactions.