Local airlines hit by fraud
Airlines in the Middle East had the worst record on internal fraud in the sector last year. A survey conducted by accountancy firm Deloitte on behalf of the International Association of Airline Internal Auditors (IAAIA) found the region had an average of 80 internal fraud incidents per airline in 2006, more than twice the global average of 33.
The report questioned 50 companies worldwide, including five from the Middle East.
It says results for the Middle East were distorted by a high number of cases at a single, unnamed airline.
Regional airlines that are members of the IAAIA include Dubai-based Emirates, Gulf Air of Bahrain and Oman, Kuwait Airways, Lebanon's Middle East Airlines and Qatar Airways.
The most common types of internal fraud were abuse of frequent flyer programmes, with staff diverting points to family and friends. Among the companies questioned, 7 per cent had cases of employees stealing the identities of passengers.
'The industry in the Middle East is expanding rapidly and it may be that internal audit functions are still catching up,' says Jean-Pierre Garitte, an enterprise risk partner at Deloitte and co-author of the report. 'On the other hand, Middle East airlines are now investing a great deal on internal control and risk management systems, so cases that went undetected in the past are picked up.'
However, the report also found that external fraud incidents suffered by Middle East airlines were almost non-existent. While the global average was 413, Middle East airlines had an average of three.
www.meed.com/transport
Airlines in the Middle East had the worst record on internal fraud in the sector last year. A survey conducted by accountancy firm Deloitte on behalf of the International Association of Airline Internal Auditors (IAAIA) found the region had an average of 80 internal fraud incidents per airline in 2006, more than twice the global average of 33.
The report questioned 50 companies worldwide, including five from the Middle East. It says results for the Middle East were distorted by a high number of cases at a single, unnamed airline. Regional airlines that are members of the IAAIA include Dubai-based Emirates, Gulf Air of Bahrain and Oman, Kuwait Airways, Lebanon's Middle East Airlines and Qatar Airways. The most common types of internal fraud were abuse of frequent flyer programmes, with staff diverting points to family and friends. Among the companies questioned, 7 per cent had cases of employees stealing the identities of passengers. 'The industry in the Middle East is expanding rapidly and it may be that internal audit functions are still catching up,' says Jean-Pierre Garitte, an enterprise risk partner at Deloitte and co-author of the report. 'On the other hand, Middle East airlines are now investing a great deal on internal control and risk management systems, so cases that went undetected in the past are picked up.' However, the report also found that external fraud incidents suffered by Middle East airlines were almost non-existent. While the global average was 413, Middle East airlines had an average of three. www.meed.com/transportThis content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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