BEFORE THE DEPARTMENT OF TRANSPORTATION …airlineinfo.com/ostpdf76/514.pdf · BEFORE THE...

BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Agreements Adopted by the Traffic Conferences of the International Air Transport Association

OST-2009-XXXX

APPLICATION FOR APPROVAL OF AGREEMENTS BY THE

INTERNATIONAL AIR TRANSPORT ASSOCIATION

8 December 2009 Communications with respect to this document should be sent to Douglas Lavin

Regional Vice President – North America International Air Transport Association IATA Washington, 601 Pennsylvania Avenue, N.W. Suite 300 - North Building Washington DC 20004

1

Summary DOCKET: OST-2009-XXXX US DOT ORDER: pending

Date: 8 December 2009 Filing fee / IATA Acct: USD 61 / 0000-06 US/UST involved: Yes End of Government Filing Period: 14 January 2010 Meeting site, date: Geneva, 20-21 October 2009 Intended effective date: 1 April 2010 Agreement: Composite Passenger Tariff Coordinating Conference Resolution 017c

(Memo 1555)

r1 017c

2

APPLICATION FOR APPROVAL OF AGREEMENT

Pursuant to statements submitted by Member airlines of the International Air Transport Association (IATA), the undersigned has been constituted to be their attorney-in-fact for filing with the Department of Transportation copies of agreements adopted by the IATA Traffic Conferences.

On their behalf, and pursuant to Sections 41308 and 41309 of Title 49 of the United States Code and Parts 303.03, 303.05 and 303.30(c) of Title 14 of the Code of Federal Regulations, I am filing with the Department this application for approval of an IATA agreement.

This agreement and related factual and explanatory material and documentation required by 14 C.F.R. 303.31 and Department and Civil Aeronautics Board (CAB) precedent are contained in the IATA Traffic Conference documentation summarized above.

This agreement arises from the continuing process of Tariff Coordinating Conferences and was developed in the context of prior Department and CAB rulings addressing related resolutions which reflected regulatory and market conditions then in effect. Thus, the present agreement should be viewed as part of a dynamic process of IATA Member airline adjustment to governmental and economic factors.

On previous occasions, the Department has found such agreements to be consistent with the public interest when they do not result in fares or rates that are unlawful or injurious to competition in the markets at issue. Approval of the present agreement would not yield fares or rates that are unlawful or injurious to competition. Moreover, approval of this agreement, which reflects compromises among the differing economic and social philosophies of the many nations whose airlines are parties, will advance the public interest in maintaining good aviation relations with other countries.

We request early approval by the Department of the foregoing agreement, pursuant to 49 U.S.C. 41309, and the grant of full antitrust immunity, pursuant to 49 U.S.C. 41308.

The conferral of full antitrust immunity would be in the public interest and necessary for the transaction to proceed. This agreement is a product of the IATA Tariff Coordinating Conferences which the Department found to be anticompetitive but nevertheless approved and immunized in Order 85-5-32 (May 6, 1985) on foreign policy and comity grounds because such action is necessary to achieve the serious transportation need of maintaining good aviation relations with other countries and these benefits are not obtainable by reasonably available means having materially less anticompetitive effects.

This agreement concerns fares or rates between non-U.S. points and thus has at most indirect application in foreign air transportation. The U.S. authorities have recognized (e.g, Order 79-8-194, 30 August 1979) that the interests of sovereign nations in the conditions governing air transportation between them greatly exceed any that the U.S. might have by reason of U.S. airline, citizen or shipper participation. This agreement is not adverse to the public interest or in violation of the Act and, therefore, should be granted full immunity.

Respectfully submitted ___________________________

Douglas Lavin Regional Vice President – North America

International Air Transport Association

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CERTIFICATE OF SERVICE

A copy of this application or a summary notice thereof has been served by first class or priority mail on the following person

Chief, Transportation, Energy & Agriculture Section Antitrust Division Department of Justice Washington D.C. 20530

________________________________ Douglas Lavin

8 December 2009 Date Served

International Air Transport Association Route de l’Aéroport 33 PO Box 416 CH - 1215 Geneva 15 Airport Switzerland Tel: +41 22 770 2842 Fax +41 22 770 2662

BB www.iata.org E-Mail: [email protected]

1 December 2009

M E M O R A N D U M

PTC COMP 1555

TO: Members Participating in Tariff Coordinating Conferences (SP-6026)

FROM: Global Head, Passenger

SUBJECT: Composite Passenger Tariff Coordinating Conference Geneva, 20-21 October 2009 Resolution 017c Intended Effective Date: 1 April 2010

RESOLUTION - ADOPTED

Attached is Resolution 017c, which was adopted at the above meeting for an intended effective date of 1 April 2010.

The filing period for the attached Resolutions ends 14 January 2010. Members are reminded of their obligations under Resolutions 001 and 006 to advise this office by the end of the filing period whether approval by their Government authorities is required and, if so, to accomplish the necessary filing formalities. The effective date will be declared in accordance with Resolutions 001 and 006, when all the known necessary Government approvals have been received.

Alban Sato Manager, Interline Tariffs IDFS Passenger

PTC COMP 1555 GVA, Oct09

RESOLUTION ADOPTED AT

COMPOSITE MEETING OF PASSENGER TARIFF COORDINATING CONFERENCE

GENEVA, 20-21 OCTOBER 2009

EFFECTIVE DATE: 1 APRIL 2010

RESO TITLE COMMENTS RD

017c Construction Rules for Fare Components Amending 1

ADOPTED Res Doc: 1 Resolution: 017c


CONSTRUCTION RULES FOR FARE COMPONENTS

PTC1(85)017c (amended) Amending PTC2(160)017c (amended) PTC3(87)017c (amended) PTC12(191)017c (amended) PTC23(155)017c (amended) PTC31(123)017c (amended) PTC123(171)017c (amended) Filing Period Begins 7 December 2009 Intended Effectiveness: 1 April 2010 Ends 14 January 2010 Expiry: Indefinite Type A

RESOLVED that, Resolution 017c is amended as follows

1 Paragraph 6) One Way Backhaul Rule, Paragraphs a) and b) are amended

6) ONE WAY BACKHAUL RULE (BHC)

a) this Paragraph does not apply i) for journeys pricing units wholly within TC1 ii) for journeys pricing units wholly between Argentina, Brazil, Chile, Paraguay,

Uruguay and TC2 iii) for pricing units wholly within Europe

b) this Paragraph applies only when using normal one way fares and special one way

fares pricing units


SUMMARY OF AGREEMENT

Composite package

Intended Effective Date: 1 April 2010

The Composite meeting met in Geneva 20-21 October 2009. The agreement contains amendments to Composite Resolutions with an Intended Effective date of 1 April 2010. The change is briefly described below.

• Deleted application of One Way Backhaul Rule on special fares in the Resolution 017c Construction Rules for Fare Components Rule.

International Air Transport Association Route de l’Aéroport 33 PO Box 416 CH - 1215 Geneva 15 Airport Switzerland Tel: +41 22 770 2842 Fax +41 22 770 2682

AS www.iata.org E-Mail: [email protected]

1 December 2009

M E M O R A N D U M PTC COMP 1553

TO: Members Participating in Tariff Coordinating Conferences

FROM: Global Head, Passenger

SUBJECT: Composite Meeting of Passenger Tariff Coordinating Conferences Geneva, 20-21 October 2009

MINUTES

Attached are the Minutes of the Composite Meeting of Passenger Tariff Coordinating Conferences, which was held in Geneva, 20-21 October 2009 under the Chairmanship of Mrs. Patricia George.

Alban Sato Manager, Interline Tariffs IDFS Passenger

PTC COMP GVA, Oct09

OUTLINE OF CONTENTS • Opening of Meeting

• Attendance Record

• Determination of Voting Membership

• Examination of Credentials of Accredited Representatives and Alternates

• Status of composite resolutions

• Approval of Minutes of Previous Meeting

• Regulatory developments on immunity for tariff conferences

• Basis for discussions

• Passenger Tariff Conferences Steering Group (PSG) Report

• Resolution Advisory Panel

• Resolution Advisory Working Group (RADWG)

• Resolution 024E – Rules for Payment of Local Currency Fares Section E

• Resolution 017c – Construction Rules for Fare Compnents

• Resolutions 300/301/302 on Baggages

• Close of Meeting

Attachment ‘A’ – Attendance Record Attachment ‘B’ – Terms of Reference Resolution Advisory Working Group (RADWG) Attachment ‘C’ – ATPCO Presentation on Automated Baggage Solution Attachment ‘D’ – Workplan Automated Baggage Rules Implementation

PTC COMP GVA, Oct09

COMPOSITE MEETING OF PASSENGER TARIFF COORDINATING CONFERENCES

Geneva, 20-21 October 2009

M I N U T E S

OPENING OF MEETING 1 The Chairman, Mrs. Patricia George, opened the Composite Meeting of Tariff

Coordinating Conferences at 1530 hours on Tuesday, 21st October 2009. The Meeting had been convened by Memorandum PTC COMP 1524, dated 16 April 2009. It comprised the following:

86th Meeting of Passenger Tariff Coordination Conference 1 161tst Meeting of Passenger Tariff Coordination Conference 2 88th Meeting of Passenger Tariff Coordination Conference 3

192nd Meeting of Passenger Tariff Coordination Conference 12 156th Meeting of Passenger Tariff Coordination Conference 23

124th Meeting of Passenger Tariff Coordination Conference 31 172nd Meeting of Passenger Tariff Coordination Conference 123

2 As with all traffic conference meetings, this meeting had immunity from US anti-trust laws, on the condition that all agreements were submitted for specific approval by the US authorities. IATA would submit the agreements to the DoT in accordance with this condition. Consistent with this, IATA's Board of Governors had determined that any agreement reached at this meeting must not be put into effect prior to its declaration of effectiveness. This ruling was contained in the Provisions for the Conduct of the IATA Traffic Conferences and must be complied with.

ATTENDANCE RECORD 3 The Attendance Record is at Attachment 'A'. DETERMINATION OF VOTING MEMBERSHIP 4 The Voting Membership for the meeting was determined in accordance with the

Provisions for the Conduct of the IATA Traffic Conferences.

EXAMINATION OF CREDENTIALS OF ACCREDITED REPRESENTATIVES AND ALTERNATES 5 The accreditation received by IATA was examined and found to be in accordance with

the Provisions for the Conduct of the IATA Traffic Conferences. STATUS OF COMPOSITE RESOLUTIONS 6 The Status of Composite Resolutions was noted and in addition Members advised

approval for the following memoranda: • Hong Kong SAR: PTC COMP 0677, 1490, 1510 • Thailand: PTC COMP 1394 • Kenya: PTC COMP 1477, 1490, 1508-1511, 1516, 1525, 1532, 1535, 1547

APPROVAL OF MINUTES OF PREVIOUS MEETING 7 The following minutes were approved: Composite Meeting of Passenger Tariff Coordinating Conferences

PTC COMP GVA, Oct09

Geneva, 9-10 October 2008 Memorandum PTC COMP 1494 dated 3 November 2008

REGULATORY DEVELOPMENTS ON IMMUNITY FOR TARIFF CONFERENCES 8 An update on recent regulatory developments impacting IATA Traffic Conferences,

including the Passenger Tariff Coordinating Conferences and its initiative for self-assessment with the US DoT was provided by IATA.

BASIS FOR DISCUSSION Amendments to Manual 9 The following amendments have been made to the Passenger Composite

Resolutions Manual since its annual print in April 2009

Memo Reference Memo Date

Reso Action For effect

PTC2 ME 0198 16Feb09 017c Attachment A – specified routing amended 01May09

PTC COMP 1517 05Mar09 024e Attachment A – Egypt source for rates of exchange

05Mar09

PTC COMP 1519 19Mar09 024e Attachment A – Kenya source for rates of exchange

19mar09

PTC COMP 1520 30Mar09 024e Attachment A – Viet Nam source for rates of exchange

30Mar09

PTC COMP 1523 08Apr09 024e Attachment A – New Zealand source for rates of exchange

08Apr09

PTC COMP 1525 30Apr09 024a Attachment B – Latvia added to list 01Jun09

PTC COMP 1527 08May09 024e Attachment A – Mongolia source for rates of exchange

08May09

PTC COMP 1530 07Jul09 024e Attachment A – Saudi Arabia source for rates of exchange

07Jul09

PTC COMP 1533 07Jul09 024e Attachment A – Kenya source for rates of exchange

07Jul09

PTC COMP 1534 10Jul09 024e Attachment A – Kenya source for rates of exchange – further to PTC COMP 1533

10Jul09

PTC COMP 1535 15Jul09 024a Attachment A – Nepal deleted from list 01Aug09

PTC COMP 1536 21Jul09 024e Attachment A – Ethiopia source for rates of exchange

21Jul09

PTC COMP 1539 06Aug09 024e Attachment A – Nepal source for rates of exchange

06Aug09

PTC COMP 1541 27Aug09 024e Attachment A – Armenia source for rates of exchange

27Aug09

PTC COMP 1542 27Aug09 024e Attachment A – Kyrgyzstan source for rates of exchange

27Aug09

PTC COMP 1544 04Sep09 024e Attachment A – Japan source for rates of exchange

04Sep09

PTC COMP 1546 14Sep09 024e Attachment A – Qatar source for rates of exchange

02Oct09

10 The manual together with these amendments formed the basis for discussion at the

meeting and any resultant changes.

PTC COMP GVA, Oct09

PASSENGER TARIFF CONFERENCES STEERING GROUP (PSG) Report 11 IATA presented a short summary of PSG activities of 2009.

The PSG did not hold a formal meeting in 2009. However their opinion was requested on certain policy issues during the year through e-mail exchanges as well as taking action on changing the terms of reference for the RAP (agenda item COMP-5/02 refers).

The most important policy item was embracing the vision to achieve 100% Flex Fares as soon as possible. This endorsement was provided in recognition that members are finding it increasingly difficult to send delegates to face-to-face meetings and IATA will no longer be able to support such meetings after June 2010. Other advantages of accelerating the transition to a world of 100% FlexFares are: - Simplified tariff coordination processes - Simpler fare structures for multilateral interline fares - Significant shortening of the regulatory approval process The Conference was pleased with the progress made and the Members were reminded to instruct their delegates to transition remaining areas to Flex Fares as soon as possible.

RESOLUTION ADVISORY PANEL 1 APRIL 2010 12 The RAP Report was presented by IATA. In addition to the proposals from RAP, IATA

reported that the Panel had also addressed:

• Resolution 727a – Cancel penalties versus Change Fee • Resolution 017f – Exchange, Reissues and Refunds Impact of tags • Resolution 100 – Most restrictive conditions • Resolution 024e – Rules for Payment of Local Currency Fares • Resolution 024d – Att A versus BSP requirements

13 The Chairman expressed her thanks to the RAP for their efforts in trying to resolve

industry problems. RESOLUTION ADVISORY WORKING GROUP (RADWG) 14 Background

There has been much discussion with RAP participants with the aim to revitalise RAP activities and make them more relevant. The main goals have been to broaden the areas of discussion and open the meeting to more airline participation.

IATA synthesized various comments from airlines/suppliers and presented new terms of reference.

The major changes compared to the previous terms of reference are:

- participation open to all IATA airlines - broader scope of discussion topics to better serve industry requirements - implementation issues to be decided upon by consensus - close liaison with other IATA groups as necessary - no compensation for airline attendance

PTC COMP GVA, Oct09

Action The conference was asked to endorse the new Resolution Advisory Working Group (RADWG) group and its Terms of References as shown in Attachment B.

15 The Conference endorsed the new working group and its terms of reference. IATA advised that the first RADWG will be called for early 2010.

EXPEDITED 15 DECEMBER 2009 RESOLUTION 024E – RULES FOR PAYMENT OF LOCAL CURRENCY FARES SECT E 16 IATA proposed

Delete Section E Local Panel Action as such panels have not been called and no longer required.

Absent opposition, this was adopted. 1 APRIL 2010 RESOLUTION 017c – CONSTRUCTION RULES FOR FARE COMPONENTS One Way Backhaul rule (BHC) Background 17 As normal one way (OO) levels are being established at 60-75% of the round trip (RT)

levels a majority of the RAP no longer saw a strong market requirement to maintain the BHC in the current environment. However, one member still found merit in keeping this check especially for pricing units involving the USA.

Proposal

18 Consequently RAP recommended limiting the application of the BHC to normal one way fares only thereby exempting special fares from the use of the backhaul formula as follows:

6) ONE WAY BACKHAUL RULE (BHC)

a) this Paragraph does not apply

i) for journeys pricing units wholly within TC1 ii) for journeys pricing units wholly between Argentina, Brazil, Chile,

Paraguay, Uruguay and TC2 iii) for pricing units wholly within Europe TC2 iv) for pricing units wholly within TC3 v) for pricing units between TC2 and TC3

b) this Paragraph applies only when using normal one way fares and special one

way fares pricing units 19 To simplify some TC members proposed to delete the rule. A vote for the deletion

revealed support of 15 members and firm oppositions from AA, UA with TG being able to abstain. The opponent to the deletion advised that this rule was still required, to be consistent with the Circle Trip Minimum check for round trip and circle trip pricing units.

PTC COMP GVA, Oct09

20 A vote on the proposal as shown in paragraph 18 above revealed opposition by CX and KQ, who did not like to see any further exceptions to this rule if complete deletion could not be achieved

21 An another vote on the following, removing exceptions and canceling the check for

any special fares was taken. a) this Paragraph does not apply

i) for journeys pricing units wholly within TC1 ii) for journeys pricing units wholly between Argentina, Brazil, Chile,

Paraguay, Uruguay and TC2 iii) for pricing units wholly within Europe

b) this Paragraph applies only when using normal one way fares and special one

way fares pricing units

Absent opposition, this was adopted with KQ abstaining. RESOLUTIONS 300/301/302 1 APRIL 2010 AUTOMATION OF NEW INTERLINE BAGGAGE PROVISIONS PROCESS Background 22 Airlines have for some time been working with the Airline Tariffs Publishing Company

(ATPCO) to design an automated application that will support reservations, pricing, ticketing and check-in systems to identify individual operating carrier baggage allowances, baggage charges and excess baggage.

Historically a rather simplistic approach to baggage had been in place in that under the weight system passengers had either 20 kilos, 30 kilos or 40 kilos (or the equivalent in pounds) depending on cabin entitlement and 2 pieces under the piece concept (depending on class, variable dimensions). This approach had a long standing basis in IATA Tariff Composite resolutions 300 and 301. In some cases excess baggage calculation was also defined. It was always understood that for interline journeys these resolutions should be used. This is not the reality today since carriers are defining their own baggage allowances and charges. Airlines have adopted new ways of assessing baggage, which is based on individual Operating Carrier rules rather than the simplistic generic rules in these tariff resolutions. The baggage options are extensive with many variables. The ATPCO baggage solution seeks to automate the complexity that now exists. In addition it should be noted that the IATA Composite Resolutions 300/301 are expiring on 31 march 2010 unless an extension is agreed by Tariff conference members and authorized by the US. DoT. As much as ATPCO were working with many Members to define a data application to calculate baggage allowances and charges, IATA in parallel was trying to develop a replacement Resolution to become effective once 300 and 301 expires.

At the Tariff Composite Conference held in October 2008 a new Resolution 302 was adopted to replace 300 and 301. In line with business drivers this new Resolution no longer mandates baggage allowances and charges but provides a step-by-step mechanism to govern the handling of Interline baggage by defining a process that determines which carrier's rule to apply for an Interline journey. The new term Most Significant Carrier is part of this new process that could apply to a given interline itinerary. This Resolution approximates the methodology applied in the ATPCO application. Indeed Resolution 302 hierarchy will be coded into the ATPCO solution. In principle Resolution 302 will be the last reference point after all other carrier baggage filings options had been eliminated. As Resolutions 300/301 which have

PTC COMP GVA, Oct09

been the basis for interline baggage allowances are expiring if there is no alternative solution and fallback Resolution 302 then there would be no IATA interline baggage standard. In fact the interlining of baggage could be placed under serious threat. To manage interline baggage allowances a high degree of automation will be required. The ATPCO baggage product allows carriers to file operating carrier baggage allowances and baggage charges but it is proving difficult to implement. Members with ATPCO have completed the work of defining the data applications and an 800-page reference document has been completed by ATPCO.

Interline baggage is already complex but there is little automation to support it. This new Most Significant Carrier rules methodology will be even more complex if there is no automation in place to support the new business drivers.

A multi disciplinary meeting to address the implementation issues was called for January 2009 however there was very little interest from some of the required attendees. Only a small number of airline commercial representatives and the system providers had confirmed participation. There was no ticketing nor airport handling expertise. The issues now arising are numerous:-

How, when and where should the automation be placed

o Reservation system o Pricing system o Check-in system o What is the impact on interline baggage allowances for international journeys

and domestic to international journeys? o Whose baggage allowance should take precedence? o What is the impact on ticketing? o What is the impact on baggage handling and interline through checking? o What is the impact on ground handling and the airport experience? o In self service devices o at the check-in counters o through check-in (TCI) o How is any excess baggage calculated? o If this automation is going to be placed in DCS systems how will the ground

handlers and the DCS systems providers be engaged assuming they are willing to do so?

There may be more that have not as yet been identified. Many IATA Members attended the ATPCO meetings however it would appear that in many cases this activity has not filtered through to other areas. Note that unless the automation is implemented there will be little opportunity to accurately define Most Significant Carrier based baggage allowances and charges (if any) that may apply and it will be impossible to audit and settle in interline billing. Because of this note this agenda item were placed on the various other working groups during the spring of 2009 with a request to discuss the issues in their areas of responsibility. Unfortunately IATA received limited feedback and no real support to determine an industry way forward.

Proposed Action:

This Composite meeting was requested to discuss the impact on all areas of responsibility, provide comments and feedback as to the impact and propose the best way forward on how the industry might best engage all stakeholders to drive this forward.

23 A presentation was made by ATPCO on the status of automated baggage rules solution and this is shown in Attachment ‘C’.

24 At the Joint Passenger Services Conference (JPSC) held earlier in the week,

a joint IATA/ATPCO Task Force was formed under JPSC to build the business case

PTC COMP GVA, Oct09

and to implement the automated baggage rules as soon as possible. The work plan for the task force can be found in Attachment D.

25 IATA advised that the Members will be informed. Each airline and strategic partner will

be contacted to nominate a "champion" within their organization to lead the implementation project.

Based on the business case developed by the Task Force, IATA will propose a new implementation date for the Resolution 302 “Baggage Provisions Selection Criteria”. The proposed date will be advised no later than the end of February 2010. KQ requested that IATA support the implementation of the automated baggage solution through regional forums such as AFRAA, AACO.

26 The conference endorsed the strategy as outlined by IATA. 27 LH stated that Resolutions 300 and 301 were not used anymore and that they should

not be extended. They did not see any connection between Resolutions 300/301 and the implementation of Resolution 302.

28 The Chairman reminded all the participants of their responsibility and cooperation to

make this transition and implementation process as smooth and efficient as possible. CLOSE OF MEETING 29 The Chairman thanked the delegates and IATA staff for their support, cooperation and

active participation in the discussions. 30 The Composite Meeting was closed at 1100 hours on 21 October 2009.

PTC COMP GVA, Oct09

ATTACHMENT ‘A’

PASSENGER TARIFF COORDINATING CONFERENCE COMPOSITE MEETING, GENEVA, 20-21 OCTOBER 2009 CHAIRMAN: PATTY GEORGE Airline Representatives

Company Name Code Name Telephone Email

Air France AF Bernard CHARRIER + +33 1 41 56 76 97 [email protected] All Nippon Airways NH Mihoko HARADA +81 3 6735 1703 [email protected] All Nippon Airways NH Mitsuyo IDE +81 3 6735 1737 [email protected] All Nippon Airways NH Akiko OYAMA + +81 3 6735 1757 [email protected] All Nippon Airways NH Takashi IMABAYASHI +81 3 5757 3985 [email protected] Airlines AA Richard RUMMELL + +1 817 488 2855 [email protected] Airlines OS Branislav KRSAK + +421 2 4940 2409 [email protected] Austrian Airlines OS Karin GRASSL+ +43 51766 12183 [email protected] British Airways BA Martin MCCOOL + +44 208 738 6228 [email protected] Pacific Airways CX Shirley YAN + +852 2747 5452 [email protected] China Eastern Airlines MU Junhui CHENG +86 21 22331399 [email protected] China Eastern Airlines MU Weiyi PAN + +86 21 22331355 [email protected] China Southern Airlines CZ Chen YONGGUANG + +86 20 86123965 [email protected] Southern Airlines CZ Li DAN SONG +86 20 86138982 [email protected] Airlines OK Michal HAJEK +420 220 115 338 [email protected] Czech Airlines OK Jirina KLIMOVA + +420 220 116 437 [email protected] Czech Airlines OK Marta POSTULKOVA +420 220 115 340 [email protected] Egyptair MS Ingy NABIL + +202 2696 4330 [email protected] El Al Israel Airlines LY Linda GRINFELD * +972 3 9716282 [email protected] Finnair AY Marko HAAKSIALA +358400691855 [email protected] Finnair AY Sirpa VÄNTTINEN-VAN RIJ + +35898188857 [email protected] Airlines IB Montserrat COYA + +34915877196 [email protected] Airlines IB Amparo COLOMER +34915877171 [email protected] FI Linda STEINGRIMSDOTTIR + +354 5050 325 [email protected] Icelandair FI Rut JULIUSDOTTIR +354 5050 344 [email protected] Iran Air Lines IR Mansour REZAEI + +98 21 46625075 [email protected] Airlines JL Ross LEGGETT +81 3 5460 3756 [email protected] Japan Airlines JL Yoko GOTO + +81 3 5460 3758 [email protected] Kenya Airways KQ Rose WANGUI * +254 6422053 [email protected] KL Madeleine VAN RIJNBERK + +31 20 64 99250 [email protected] KLM KL Marina DAALHUIZEN + +31 68 32 04219 [email protected] KLM KL Johan LODEWIJCKX +31 20 64 99083 [email protected] Korean Air KE Keunhae KIM +82 2 2656 7502 [email protected] Korean Air KE Minjung OK + +82 2 2656 7507 [email protected] Korean Air KE Kyung Yong LEE * +82 2 2656 7766 [email protected]

Kuwait Airways KU Mansour AL SULTAN * +9654345555 ext 3493 [email protected]

LAN Airlines LA Silvana MOLETTO +(562) 565 8858 [email protected] Polish Airlines LO Elizabeth DMOWSKA + +48 22 577 9445 [email protected] Lufthansa LH Tanja PRITZKOLEIT + +49 69 696 54188 [email protected] MEA ME Salim KHARRAT + +961 1 622640 [email protected] Qatar Airways QR Stephane BAUDEMONT * +9745859102 [email protected] Rossiya FV Svetlana PUSTOKHINA + +78127043800 [email protected] Royal Jordanian RJ Amal KAMAL * +962 6 5202130 [email protected]

S7 Airlines S7 Irina ANOKHINA + +7 926 47 00 ext 4572 [email protected]

Saudi Arabian SV Samir ALOMAIRI +9662 6862609 [email protected]

mailto:[email protected]













PTC COMP GVA, Oct09

Company Name Code Name Telephone Email Airlines Saudi Arabian Airlines SV Roman TARABZONY 0555651519 [email protected] Airlines SK Kurt SAETRE + +4687974608 [email protected] Tarom RO Margareta VASILEVSCHI * +40 21 2014726 [email protected] Thai Airways International TG Cherdsak WAIARSA + +66 2 545 1891 [email protected] Thai Airways International TG Pranee WASINSOMBUT + +66 2 545 1890 [email protected] United Airlines UA Carol SWANSON + +1 312 997 8704 [email protected] Virgin Nigeria Airways VK Dorcas AKETCH * +234802200721 [email protected] Virgin Nigeria Airways VK Olayiwola-Abiodun ALABI 2348023151316 [email protected]

Observers Company Name Name Telephone Email

ATPCO Fred FOOTE +1 703 471 7510 ext.1328 [email protected] Council International (ACI) Arturo GARCIA-ALONSO +41 22 717 85 85 [email protected]

IATA Name Job Title Telephone Email Philippe BRUYERE Global Head, Passenger +41 22 7702758 [email protected] Mike MULLER Head, Passenger Interline Standards +41 22 7702731 [email protected] David MCEWEN Manager, Passenger Interline Standards +41 22 7702086 [email protected] Colin FLYNN Senior Legal Counsel +41 22 7702902 [email protected] Alban SATO Manager Interline Tariffs +41 22 7702878 [email protected] Lars SELLSTEDT Manager, Tariff Meetings +41 22 7702818 [email protected] Cristina ROTOR Manager, Industry Solutions +41 22 7702816 [email protected]




PTC COMP GVA, Oct09

ATTACHMENT ‘B’

RESOLUTION ADVISORY WORKING GROUP (RADWG)

Terms of Reference The Resolution Advisory Working Group (RADWG) is a forum whereby IATA Members and IATA Strategic Partners may:

1. Discuss and develop uniform interpretations of existing resolutions and procedures relating to the application of tariffs and interlineable fares and rules;

2. Discuss developments in distribution channels and recommend changes to existing

resolutions and procedures relating to the application of tariffs and interlinable fares and rules;

3. Review and advise on the implementation strategy of adopted changes and

interpretations to current tariff resolutions, procedures and methodologies. Membership is open to all IATA member airlines and Strategic Partners. Procedures

Meetings will be called as necessary;

The RADWG will liaise closely with other IATA groups as necessary, e.g. the Ticketing Committee;

Implementation issues will be decided by consensus;

Recommendations regarding IATA tariff coordination (TC) resolutions will be agreed by a

simple majority vote for which only IATA TC members may vote. Such recommendations will be forwarded to the Composite Conference for their consideration via the Passenger Steering Group (PSG).

Recommendations regarding other IATA resolutions will be forwarded to the appropriate

Committee for their consideration.

PTC COMP GVA, Oct09

ATTACHMENT ‘C’ ATPCO PRESENTATION ON AUMATED BAGGAGE SOLUTION

Baggage Allowance

and Charges

Baggage Allowance and Charges

• Background

• Regulatory Situation

– IATA resolutions

– Government regulation

• Goals

• Solution and Automation

• Opportunities

• Status

Baggage Allowance and ChargesBackground – Passenger Ticketing

• GDS specific process that often:

– Specifies free allowance only

– Relies on a table driven process

– Involves manually maintained data

– Is not current or easily updateable

– Is unable to vary allowance by passenger, fare product, status, operating carrier etc.

– Provides fare owner information only

– Omits embargo information

Baggage Allowance and ChargesBackground – Passenger Check-in

• Involves a DCS process where:

– Rules of down-line carriers not always known

– There is a heavy reliance on agent knowledge

– Check-in carrier rules are often applied

– Issues may exist collecting fees at departure

– Creation of accountable documents often involves paper

Baggage Allowance and ChargesBackground – Fees and Collection

• Fees

– Ancillary revenue yearly increase of 345%

– Baggage revenue represents a large portion• First bag / Second bag

• Pre-paid

– Varying fees / application• Point of check-in / payment

• Passenger type / status

• Negotiated Fares

Baggage Allowance and ChargesBackground – Fees and Collection

• Fee collection is not standard:

– Calculation of fees is not known

– Under collection of fees can occur

– Down-line fees ignored

– Accountable documents are not created

Baggage Allowance and ChargesBackground – Interline Processing

• Interline baggage rules are not transparent– Often not clear to the passenger

– Often not applied at time of check-in

• Minimal interline baggage settlement– 12% of passenger tickets involve interline settlement

– 1% of passenger tickets involve excess baggage charges

• Risk in interline tickets where baggage fees are– Not collected,

– Under-collected, or

– Not interlined


Regulatory Situation

• IATA

– Resolution 300/301

– Resolution 302

• Government

– US DOT• ATPCO PTBs 15OCT09, 02APR09

• Transparency to the passenger


Goals

• Provide data content to manage online and interline travel

• Provide accurate baggage allowance and charges information at all touch points to the passenger

• System accurately calculate charges

• Correct revenue accounting and billing

• Meet regulatory requirements

Baggage Allowance and Charges Solution and Automation

• Interline travel and IATA Resolution 302– Document process to align interline provisions

– Provide data to determine “whose rules apply”

• Accurate application of allowance and charges– Online and interline

– Piece and weight systems

– Data in IATA Resolutions 300/301

– Carrier rules

– Alliance harmonization


• Support processing of embargos– Notify Passenger

– Minimize customer service impacts

• Revenue Management and Accounting– Create accountable document

– Support interline settlement

– Minimize revenue leakage

• Consistent application– Ticketing

– Check-in

– Revenue Accounting


• Display, Itinerary Pricing, Passenger Ticketing

– Passenger request for information on baggage

allowance

– Indication of free baggage allowance on Passenger

ticket / receipt / coupon for purchased airfare

– Embargo / restriction communication


• Passenger Check-in

– Determine checked points

– Check for baggage embargo

– Verify free baggage allowance

– Assess applicable baggage charges


• Excess Baggage Ticketing, Handling

– Produce an accountable document (Electronic

Miscellaneous Document)

• Revenue Accounting, Interline Settlement,

Reporting

– Support account functions to ensure proper collection

– Interline billing / settlement

Opportunities


Options:

– Provide Content to impacted areas / system• Centralized Repository

• Text subscription product

• Data products for systems processing

• Centralized Baggage Calculator

Opportunities – Baggage

Allowance and Charges

Centralized Repository:

– ATPCO builds a collection system for data

– Translation of data into readable format based upon “rule owner”

– Provide internet based access to ATPCO data



Centralized Repository



Text Subscription Product:


– Translation of data into readable format based upon “rule owner”

– Provides subscription product• Direct sales for customer information

• Passenger check-in for manual validation

• Passenger check-in for manual collection of fees

• Revenue Accounting for interline billing and revenue allocation

• Audit



Text Subscription Product



Data product for system processing:


– ATPCO documents system processing requirements for automated data

– Provides data to subscribers for automated processing by GDS, CRS, DCS, Revenue Accounting and Auditing systems

• Passenger Pricing, Ticketing, Inquiry

• Passenger check-in for validation of allowance

• Passenger check-in for automated collection of fees


• Audit

Opportunities


Data Product for system Processing



Centralized Baggage Calculator:


– Provides request / response handling for inquiry

– Defines transaction input / response for• Passenger Pricing, Ticketing, Inquiry

• Passenger check-in for validation of allowance

• Passenger check-in for automated collection of fees


• Audit

Opportunities


Centralized Baggage Calculator

Status and Next Steps

• Agreed upon industry solution

• ATPCO design complete– Required data identified

– Processing of data documented

• Carrier/subscriber commitment required– ATPCO will host Project Driver workshops 4Q09/1Q10

with interested airlines/systems

• ATPCO development targeted to begin mid 2010– Near term delivery opportunities?

Status and Next Steps

ATPCO Contacts

Fred Foote, Manager Industry Solutions

[email protected]

703 471-7510 extension 1328

Marcus Maginniss, Sr. Business Analyst

[email protected]

703 471-7510 extension 1664

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ATTACHMENT ‘D’

Work Plan

Automated Baggage Rules Implementation

(as endorsed by JPSC/29 PSC/31 – GVA, October 2009)

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1. Introduction 1.1 About Automated Baggage Rules 1.2 The Challenge 1.3 Statement of Fact 2. Business Case for Automated Baggage Rules Implementation 2.1 The Benefits – Selling the Project to Implementation 2.2 The Vision Statement – Industry Direction 2.3 The Business Case – For the Industry 2.4 The Cost Benefit Analysis 3. Flow review of current procedures and processes 3.1 The Scope of the Project 3.1.1 Distribution 3.1.2 Airport Services 3.1.3 Financial 3.1.4 Information Technology (IT) 3.2 Current Business Process Review 3.2.1 Procurement of the Excess Baggage Ticket – Airline Dedicated Stock 3.2.2 Reservations and Ticket Issuance 3.2.3 Multiple Sales Channels 3.2.4 Airport Processes and Procedures 3.2.4.1 Check-in 3.2.4.2 Boarding 3.2.4.3 Post Departure 3.2.4.4 Other Airport Functions 3.2.4.5 Other Airport Issues 3.2.5 Financial 3.2.6 System Functionality Self Evaluation 3.2.7 Interline agreements and ground-handling evaluation 3.2.8 Messaging 4. Participants In The Process 4.1 The Passenger 4.2 The Airlines 4.3 Travel Agents 4.4 Distribution Channel Provider (GDS) 4.5 Ground Handler

4.6 Revenue Accounting 4.7 Application/System Interfaces 4.8 Passenger Reservations 4.9 Departure Control System (DCS) 4.10 Industry Settlement Systems 4.11 Revenue Accounting 4.12 Interline Billing

5. Automated Baggage Rules – Processes Description

5.1 Automated Baggage Rules Marketing Process 5.2 Automated Baggage Rules Relationship with ET Issuance Process 5.3 Automated Baggage Rules Relationship with Ground Handling Process 5.4 Automated Baggage Rules Revenue Accounting Process

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1. Introduction 1.1 About Automated Baggage Rules Historically interline baggage rules have been governed in a rather simplistic approach governed by IATA Composite Resolutions 300 and 301 which expire 31 March 2010. Carriers have a new business model requiring baggage rules to be assessed at the operating carrier level. ATPCO has been working with carriers to fully define a filing architecture for carriers to file their individual baggage allowances and charges. This inherently creates a level of complexity never before seen in baggage. One could say it was analogous to the complexity that has evolved with carrier fare filings. Now we have carrier baggage rules filings. IATA Resolution 302 was adopted to provide a hierarchical approach to selecting a carriers rule that would be applied across an interline journey by defining ‘carrier selection criteria’ based on most significant operating carrier. To be successful automation across a wide range of applications is required. 1.2 The Challenge Resolution 302 has been exempted from US DoT regulatory scrutiny. Despite all the work done with ATPCO with commercial, tariffs and revenue management representatives there has been in consultation there has been little interest with other areas of the business as to what is needed to drive implementation. There appears to be growing sentiment that this is an important issue and that the industry requires direction and leadership to define what needs to be done to bring the solution to market. 1.3 Statement of Fact Resolutions 300/301 expire officially 31 March 2010. The only standard to look to in case of interline disputes will be resolution 302 unless carriers apply a different approach themselves. ATPCO have defined a filing architecture but to date no one has shown any interest in implementing the solution.

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2. Business Case for Automated Baggage Rules Implementation 2.1 The Benefits – Selling the Project to Implementation Individual airlines must make up their own minds whether to proceed. It is necessary to clearly define the benefits of moving to an automated solution to both internal and external stakeholders and identify the consequences of remaining without an automated solution. Importantly a lack of automation could signal an end to a seamless interline process as we know it today. Some of the business drivers could be:

• Opportunity to establish new revenue streams, • Opportunity to audit and validate current baggage policy, • Opportunity to distribute baggage policies through multiple channels.

What is required is to identify the benefits of an automated baggage solution versus remaining with the current situation for airlines, travel agents, airport processes and the passenger experience. See below for the work that needs to be completed. Benefits of Automated Baggage Rules - Carrier Existing Baggage Rules (non-automated)

New Automated Baggage Rules

2 Benefits of Automated Baggage Rules – Travel Agency/Agent Existing Baggage Rules (non-automated


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Benefits of Automated Baggage Rules – Airport Check -in Existing Baggage Rules (non-automated


Benefits of Automated Baggage Rules – Passenger Existing Baggage Rules (non-automated


2.2 The Vision Statement – Industry Direction From the exercise in 2.1 we should now be better able to provide an industry vision statement. 2.3 The Business Case – For the Industry Why should we do this as a strategic implementation. The industry business case is not completed and not defined. Without a business case it is difficult to define an implementation strategy. We need to have Conference action to help define a business case. 2.4 The Cost Benefit Analysis The cost benefit analysis has not been completed. There is no global industry business case. There is a high level view of the main drivers but there is no real sense that anyone will implement this even if the solution from ATPCO was already built. There is no real understanding of the solution and what impact it will have. Accordingly major stakeholders are not engaged because no one is sure what they are being asked to do and which areas are most impacted. Moreover no one knows where the solution will reside (e.g. will it be a message to an ATPCO database or will the application sit in the check-in systems).

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However the final infrastructure will have the following cost areas that will need to be evaluated: • System provider supplying the automated baggage rules product

• Initial implementation • Transactions • Maintenance • Upgrades to own system • Support

• Cost of integration into systems and connections • Staff resources and training • IT resources and man hours • Distribution to BSPs/ARC – cost by GDS • Website development • Ground Handling Deployment

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SCHEMATIC DIAGRAM

Travel Agency Distribution (BSP/ARC)

via the GDSs

Home Market and Other Countries

X # GDSs

and countries charged

Other Channels (e.g. secure agency portal on the internet)

Direct Sales

Carrier Reservations System

Carrier Pricing Systems

Check-in system (DCS)

Handling Agents

Check-in Systems

(DCSs)

x # Ground Handlers or DCS as charged

Interline Partners

Information to/from interline partners’ Check-in System

X # interline partners

ATPCO AUTOMATED

BAGGAGE RULES SOLUTION

Revenue Accounts

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3. Flow review of current procedures and processes Implementing an automated baggage rules solution will affect virtually every part of an airline’s business. It is not just about applying a technological solution as found in normal Information Technology (IT) implementation projects but more, it will affect how business is done in the future. It is important to note that in order for the project management team to be effective there should be a full and complete process and procedures review of how business is being conducted today without automation. However, more importantly, at every step and in every department the question should be asked, “What are the consequences for this process when the automated solution is implemented” A carrier needs to be open to change and be ready to question why a particular process or procedure is in place and whether this will still be required in an electronic environment. In addition, it is important that a carrier knows at the beginning where their current systems are located, which platforms they are on (e.g. which EDIFACT message version is running), what vendors are used, which processes are automated or manual and which will need to be integrated. Key decisions will have to be made as the project evolves (e.g. changes to revenue accounting systems that can handle certain data may be required, amongst others). These decisions can only be made effectively and within an agreed time frame if there is full view of the facts. It is important to complete a self-evaluation to determine from what base line the project is starting. At each stage it is important to ask, “Do I need this process and what is the impact on my other procedures and processes if I remove it?” In order to start the process review, it is necessary to examine the business process as it is today. The following section documents the different processes and procedures that are used. This section raises a series of issues that will need to be addressed. However, as each carrier is different, it does not cover every single issue that may arise. 3.1 The Scope of the Project The scope of the project is wide-ranging and covers all departments. The project manager will not be able to manage the implementation without breaking the project into more manageable parts. To deliver the automated baggage rules solution and realize the revenue, there are four major areas that are involved. We will, for the purpose of this discussion, refer to them as ‘The Four Pillars’.

1. DISTRIBUTION: from first contact to ticket issuance; 2. AIRPORT SERVICES: from check-in to departure; 3. FINANCIAL: from sales reporting to revenue accounting; 4. IT: from systems support to systems integration.

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Each of these areas will have a major part to play in the procedures and process review. As these areas will be the ones most affected, it is important that these 4 areas are involved at the earliest stage. In fact one could say that automated baggage rules implementation is not one project but 4 projects making up the implementation. 3.1.1 Distribution Distribution can be identified as the process by which a contact is converted to a sale and a ticket for carriage is issued. Typically this might involve sales and marketing, tariffs, reservations, call centers, travel agents, airport ticket offices, city ticket offices and ticketing service centers. 3.1.2 Airport Services This is the moment of truth. This is when the passenger realizes the product they have paid for. Up to this point all they have is a ticket and possibly an idea of their baggage allowances if any. This area will involve check-in, passenger handling, station management, departure control, gate and boarding control and coupon control. 3.1.3 Financial This is the area that is responsible for the money. Finance are involved in making sure all the sales transactions are reported correctly, the revenue accounting department books the revenue once the passenger has flown and coupons used and prepares bills for interline settlement. They take care of accounts payable and accounts receivable and play an important role in ensuring the financial stability of a carrier. The revenue in the financial area is realized by the presence of the ticket. They also agree the budget for the implementation of the project. 3.1.4 Information Technology (IT) The link between each area of the business is facilitated by the movement of the electronic ticket (and in some cases paper tickets) at each point in the process. IT’s role in an airline is usually primarily concerned in ensuring that the different systems a carrier is running operates efficiently and reliably, trouble-shooting when things go wrong. However the reservations system may operate independently from the check-in system. The back office revenue accounting systems will work totally independently from both the reservations system and the check-in system. Carriers typically will be running many other systems that support their operation but typically they all operate independently of each other. Some of them may be in-house solutions built and maintained uniquely by a carrier, still others may be purchased from vendors, system or software providers.

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When the solution is deployed, electronic data distribution becomes the enabler. As many systems work independently of each other they need to have the capability to exchange data within an electronic environment. Thus, messages need to go between the reservations system to the check-in and the revenue accounting systems and importantly between interline carriers. Instead of I.T. maintaining stand-alone systems, their major role will be to ensure that all the systems are INTEGRATED with each other. IT’s role will be to ensure that these systems are able to exchange and process data in order to facilitate all of the transactions required to continue to manage the business. The systems must be able to interface with each other so that the passenger will not be inconvenienced. In addition however when data is exchanged new opportunities will become available not only to manage the data, but to re-engineer the procedures of the business 3.2 Current Business Process Review Looking at baggage rules today what is needed is a ‘process review’ of the current product by looking at all the contact points that are affected. It will be broken down into different sections for ease of reference. In addition there is proposed a series of questions that will require research and evaluation. The list is not exhaustive. As the process progresses, the number of questions will naturally increase. It is important that all the issues are addressed when they are identified at this early stage. 3.2.1 Procurement of the Excess Baggage Ticket – Airline Dedicated Stock You will have a supplier of your paper ticket stock. This has a cost. The procurement of the EBT is however just one part of the process. The stock must be first shipped to your headquarters usually under a secure bond. Maybe you must pay customs duty on it. Somebody, usually in revenue accounting, will log it in. The boxes have to be then broken down into smaller packages. You need a secure warehouse to store the documents. Your own city and airport ticket offices will order stock, which must be tracked internally and shipped by secure bond to your offices. Your offices (ATO/CTOs) must maintain an audit trail of stock issued and stock in store. Documents must be stored in a safe on secure premises to prevent pilferage. You may have General Sales Agents to whom stock must also be distributed. In a non-BSP environment you may also supply tickets to travel agents. Once the stock has been distributed, you have no way of knowing the usage until you receive the audit coupon confirming a sale. Periodically you will need to conduct an inventory/audit of remaining stock.

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All of the above just for excess baggage tickets. Will the EMD-A be part of the process?

Issues to resolve – Procurement EBT Stock

Issues to be resolved How will the implementation of automated baggage rules affect the issuance of documents? Will you move to the EMD-A for charges How do I manage the transition? What are the consequences at 40%, 60% 80% penetration? What processes and procedures will I no longer need? What new procedures will replace them if any? What is now no longer valid? Other issues? 3.2.2 Reservations and Ticket Issuance How will the implementation of automated baggage rules impact the reservations and ticketing procedures?.

Issues to Resolve – Reservations and Ticketing

Issues to be resolved Evaluate the entire reservations procedures? What roles will your call centres have? Will you change the functions of your call centre staff in addition to fares and ticketing will they also be pricing baggage and issue EMDs? Will you introduce the concept of a ‘one stop shop’ where all your resources are channeled in one place and the staff can perform any function? How will you manage the training of your staff to recognise and handle reservations with baggage rules in them? How will the transition be managed at 40%, 60%, 80%, 100 percent electronic ticketing penetration? What roles will the CTOs/ATOs have when automated baggage rules are introduced ? How might their jobs change? What processes and procedures do they perform today necessary to a smooth operation that are facilitated by simplified baggage rules and how will this change in the future?

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3.2.3 Multiple Sales Channels An airline typically has a multitude of sales channels. They can be defined as:- Direct sales via CTOs/ATOs Travel Agency Distribution via the BSPs (ARC in the USA) Travel Agents appointed by the airline General Sales Agents Consolidators Tour Operators Corporate Travel agents/implants Internet What will the impact be when automated baggage rules are implemented? .

Issues to be Resolved – Sales Channels

Issues to be resolved 3.2.4 Airport Processes and Procedures Now that automated baggage rules are introduced, this must then be translated into the delivery of the product at the airport. It is important that a passenger has a positive experience with electronic tickets and related baggage rules. There should be no perception that simply because the baggage rules are now varied and complex, the passenger will be treated somehow differently. One of the key drivers is that there is only one process and procedure to follow thereby reducing the complexity. With the evolving operating carrier rules business model, it becomes extremely important to avoid passengers being mishandled purely because of differing baggage rules. It is extremely important to complete a full process and procedures review of all activities at the airport. This should be done, not just for when things go smoothly, but also for when things do not run according to plan. Each day at an airport is different. Passengers have many questions and different situations develop whether it is the requirement for a reissue, an involuntary rerouting or an excess baggage payment. In addition, all of the administration and back office processes need to be ‘mapped’ into a document detailing everything that happens as well. 3.2.4.1 Check-in The check-in process is performed online, via self service devices and face to face. How will this change once automated baggage rules are implemented?

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3.2.4.2 Boarding The boarding control is typically performed either by entering the sequence number allocated at time of check-in into the departure control system or using the bar code on the boarding pass. What is the impact on boarding?. 3.2.4.3 Post Departure Document the post departure process if any? 3.2.4.4 Other Airport Functions Document the impact on other airport functions 3.2.4.5 Other Airport Issues At airports that a carrier operates to, it is important that the ground handlers are involved in process mapping issues surrounding their roles and responsibilities,

Issues to be Resolved - Airport

Issues to be resolved:

Check-in: The check-in staff will need to be able to identify when a passenger has a free baggage allowance, a paid baggage allowance and excess baggage and how to calculate the rate and assess charges During the early transition this may be a problem for check-in staff. Staff will need to be trained to recognise the difference. Passengers will be given an itinerary/receipt as proof of the transaction. Passengers should be aware much earlier than the check in process of their allowances and charges. How will you achieve this? Will you always insist that the passenger presents the ITR to your check-in staff? How will you train your check-in staff to understand the difference between different allowances? What will you do if a passenger claims to have been given a free baggage allowance but your system says something different?

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How will you handle staff non-revenue passengers? How will you handle flight irregularities?

From your own flight to another carrier’s flight with different allowances From another carrier’s flight to your flight with different allowances

How will you manage your ground-handlers where you do not perform your own check-in and do not have your own system in place? How are you going to manage the transition at 20%, 40%, 60% 80% percent going to 100 percent electronic ticket penetration? As electronic ticket volumes increase, procedures and processes you had in place with lower volumes of electronic tickets may no longer be efficient nor appropriate. How will you manage interline issues through checking a bag? How will the relationship between the check-in and the ticket desk change? How will the relationship between the boarding gate and the check-in change? Boarding: How will your gate staff understand the difference between a passenger with free baggage allowance and another with paid baggage? Post Departure: 3.2.5 Financial In this section we detail what happens to baggage policy from a revenue accounting and management perspective All Revenue Accounting Departments are familiar with documenting sales which come from a variety of sources of distribution (own ticket offices, travel agents, BSPs, GSAs). This may deliver data into an automated revenue accounting process One of the greatest benefits why carriers should deploy an automated baggage rules solution is in the financial area. There are huge opportunities to streamline the revenue accounting processes and procedures in order to realize the revenue from baggage much sooner. The most obvious benefit is that, now you are managing data. There are new opportunities to audit and enforce baggage policy.

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Issues to be Resolved – Revenue Accounting

Issues to resolved

What will be the impact on revenue accounting departments when automated baggage rules are in place?. How do I manage the revenue accounting process today? What will the consequences be when automated baggage rules are in place? What will be the impact on revenue accounting with 20%, 40%, 60% 80% going to 100 percent penetration? What kind of automation is available in the revenue accounting system today if any? Can my current functionality accommodate new data flows? What processes and procedures will need to be changed? Can my systems support the new functionality required for electronic tickets? Are there are any new opportunities to be evaluated for example better management of pro-ration, billing and audit? 3.2.6 System Functionality Self Evaluation Up to this point we have focused on the business processes. However before a carrier can make an informed decision concerning what new functionality they may require, it is necessary to perform a system self-evaluation check. This will allow a carrier to understand exactly where they are with their systems and technology today and understand on what platforms they are running their business. It may mean that a carrier will need to put out a Request for Purchase (RFP). However, without having a full picture of what systems are running the reservations, ticketing, check-in and revenue accounting processes it is impossible to make an informed decision as to what will be required to upgrade those systems to provide for automated baggage rules. 3.2.7 Interline agreements and ground-handling evaluation It is impossible to successfully implement automated baggage rules project without knowing with whom you do business. Your interline partners and ground-handling companies will also be affected by your transition. They likewise will have to move away from current process to an automated process For ground-handlers you will need to determine for every destination that you serve, whether there is a automated check-in system (DCS) in place, what is the name of the system, who is running it, the name of your ground-handler and establish a timeline to implementation of the new baggage processes. You will need to document DCS system capability. Example of how this might look is shown below.

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Example of a ground handler capability evaluation (not actual data)

Station Handler DCS ET

Supported Method ET

Solution provider

readiness to engage

Ground Handler

Readiness to engage

Stage 1 pilot

potential

CDG AD GAETAN Yes Interactive Ready August Yes-pilot

LHR Aviance LH Yes Interactive Ready August Yes-pilot

MXP S.E.A. ARGO Yes Interactive Ready Unknown Investigate

LGW Servisair CODECO Yes Working Copy

Unknown September 06

Investigate

GVA Swissport EDS Yes Both Ready Unknown Investigate

JED ATTAR OASIS No Neither yet Exclude TAG PAG Manual

Check-in No Neither No

automated DCS -

Exclude ZRH Swissport EDS Yes Both Ready November

06 GH too late

for us 3.2.8 Messaging Depending on your system setup automated baggage rules data may need to flow between applications. Need to document how this will occur?

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4. Participants In The Process In order to fully document the process it is important to understand who are the participants involved. Each group will have unique requirements and, as the project progresses, will require you to involve them at some stage of the development. 4.1 The Passenger Needs a seamless experience with no surprises. How is the passenger experience going to change? An airline’s marketing department should develop a strategy for the presentation and roll-out of new baggage policies to the customer 4.2 The Airlines We know the terms ‘Validating, Marketing and Operating Carrier’. Let us more formally identify these roles related to automated baggage rules. 4.3 Travel Agents Someone providing services to the passenger by issuing or taking action against the electronic documents, this may be a person or an automated device. This may be a physical bricks and mortar agent or possibly an internet booking engine 4.4 Distribution Channel Provider (GDS) A system provider outside the airline through which reservations can be made and/or tickets issued by Travel Agents. 4.5 Ground Handler A company that provides the passenger handling functions at the airport, such as check-in and boarding control. This could be an airline acting as a ground handler or a third party ground handler. 4.6 Revenue Accounting Function in airline which performs the final processing of Electronic Ticketing data for revenue collection. 4.7 Application/System Interfaces Automated baggage rules will affect many systems. It is of utmost importance that all application/System interfaces are processing the data correctly. If there is a failure to process data accurately at the most extreme passengers may be severely inconvenienced at airports or airlines may fail to claim for interline revenue from their partners. 4.8 Passenger Reservations This is the system handling passenger bookings and special requests and is responsible for storing Passenger Name Records (PNR). What impact is there on the PNR. Does pad baggage need to be booked? 4.9 Departure Control System (DCS) This system handles airport processes including check in and gate functions and also passenger irregularities where the ET coupon is affected. In many cases the Operating Carrier uses its own preferred system with its agents or employees to perform these functions.

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An airline may contract this function out to a Ground Handling Company or to another Airline. If a Ground Handler is involved and is using a system that is not the Operating Carrier's own preferred system, further system integration needs to be performed with that other DCS. What will be the impact when automated baggage rules are implemented.. 4.10 Industry Settlement Systems Sales of electronic tickets by GDS’s are reported to BSP’s in the same way as automated tickets, using the standards contained in the Data Interchange Specifications Handbook (DISH) and in line with the procedures established by the BSP. The full procedures and guidelines for the operation of electronic ticketing in a BSP are included in the BSP Manual for Airlines. What will happen when baggage is prepaid in agencies? 4.11 Revenue Accounting For each ET coupon that has been “lifted” by the Operating Carrier (i.e. for which a passenger has been transported or ticket has been exchanged/refunded etc), the relevant information, including the settlement authorization code received from the Validating Carrier, is passed to the Operating Carrier’s revenue accounting system. How will paid baggage and excess baggage be accounted for in the future? 4.12 Interline Billing The Operating Carrier bills the Validating Carrier through the normal interline billing process. In the billing details from the Operating Carrier the settlement authorization code should be included. Complete details of interline billing procedures can be found in the IATA Revenue Accounting Manual. How might interline billing and settlement change?

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5. Automated Baggage Rules – Processes Description 5.1 Automated Baggage Rules Marketing Process As soon as an Airline is ready to implement automated baggage rules, they need to be entered into the reservations process in the different sales and distribution Channels. These may include GDS’s, ATO/CTO, Internet or other channels where the product is marketed and sold. 5.2 Automated Baggage Rules Relationship with ET Issuance Process When the PNR has been created and the ET is to be issued, the Validating carrier will process the Ticketing request message and create the Electronic Ticket in the Electronic Ticket Data Base. The issuance message can come from a GDS, Internet channel, airlines own office or other channels. When the ET is created, an Itinerary/receipt has to be formed and provided to the customer. What will the impact of automated baggage rules be on ticketing? 5.3 Automated Baggage Rules Relationship with Ground Handling Process The flight details will be made available in the check-in process x-hours before departure. In these flight records there will be amongst other details, passenger name and Electronic Ticket number including Coupon Number. The Check-in process will validate the ET information at time of check-in and when the flight has departed the ET will be updated with Flown status. Where will the baggage information reside related to the passengers allowance and charges? 5.4 Automated Baggage Rules Revenue Accounting Process How will revenue accounting process and audit baggage rules?

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