ZED MIBA Working Group
26-27 January 2016
1.
Financial Statement & Membership update
2.
Comms & Admin
• Montreal Convention – voting paper
• Leave of Absence – possible voting paper
• Fees for upcoming year
Agenda
3.
Taxes
• Survey Results
• APD – Update
4.
Website
• Agreement Infonia/ZED MIBA
• Website running costs - voting paper
5.
6.
AGM 2017 - Gala dinner Financing – voting paper
Fares
• Consistence of fare tables Economy vs. Premium vs Business - possible voting paper
• Fares adjustment implementation date – voting paper
7.
Cooperation with IATA Passenger Conferences - update
8.
AGM 2016
• Agenda Items
• Break out sessions
9.
AOB
Working Group 26-27 January 2016
Financial Statement
Working Group 26-27 January 2016
Membership update
October 2015
October 2015
October 2015
November 2015
British Midland Reg. Airways Ltd
TAAG Angola Airlines
Tigerair Taiwan Co. Ltd
Thomas Cook Airlines Limited
BM-480
DT-118
IT-608
MT-881
Melissa Sharpe
Pierre Le Faou
MingYen LEE
Stuart Shires
United Kingdom
France
Chinese Taipei
United Kingdom
Working Group 26-27 January 2016
Tax Survey Results
Presented by Teresa Miller, F9 and Julie Williams, BA
Situation/Problem
At the Working Group in Frankfurt, October 2015, we had a
presentation on exempted taxes for leisure and duty travel.
The wording of the US Ticket Tax Box Service (TTBS) is
vague and confusing. The descriptions of non-revenue and
no-revenue are interchanged, making it unclear when to
exempt specific taxes. We agreed to have a survey on tax
exemptions for leisure/duty travel in all countries.
Survey Results
This survey is limited to tax exemptions for other airline
employees traveling on your carrier. It does not include
exemptions that carriers might have for their own
employees.
The results are from sixty carriers who have participated
as of Friday, January 22.
Tax Survey Results
Question 1: Does your home country exempt specific taxes for
airline employees traveling for leisure? If Yes, list the
country/city, the tax and parties that are exempt in the
comment box:
Yes = 14
No = 44
No reply = 182
Carriers answering Yes to Question 1:
• Adria Airways – INF are exempt
• Air France – INF are exempt, VAT applies on all levied taxes for domestic travel
• Alaska Airlines – US, ZP do not apply because AS employees travel for free
• Allegiant Air – US, ZP, XF, AY
• American Airlines – US/ZP, US/XY, US/AY, US/XF
• British Airways – in the UK GB tax is exempt for travel in the lowest class for all persons under 12.
From March 1, 2016 this extends to those 15 and under.
• Cayman Airways – XF and XA
• CityJet Limited – YR and UB from LCY
• Croatia Airlines – SPU airport exempts HR departure tax on all ID00 tickets (where no fee is
collected)
• Frontier Airlines – XF is exempt on a ticket with a fee
• Hawaiian Airlines – exempt the YQ surcharge to other airlines traveling on HA
• Luxair – YQ taxes
• Virgin Atlantic Airways – exempt taxes US/AY/XF and YQ, only to US destinations for our employees
• WestJet – XT, YQ
Tax Survey Results
Question 2: Does your home country exempt specific taxes for airline
employees traveling for duty? If Yes, list the country/city and the tax that is
exempt in the comment box:
Yes = 16
No = 37
No reply = 187
Carriers answering Yes to Question 2:
• Adria Airways – for duty/DHC travel in Slovenia the tax example are: SI and JJ for ID00 (100%
discount?) and Airline Crew on Duty
• Air Europa – Spain taxes JD and QV: Airline crew on duty
• Air France – C1 are exempted for taxes. VAT (UI) applies on all levied taxes for domestic travel
• Alaska Airlines – US, ZP, XA, XY, YC, XF, AY, XG, SQ and CA (for AS employees only)
• Allegiant Air – US, ZP, XF, AY
• American Airlines – US/ZP, US/XY, US/XA, US/YC, USAY, US/XF
• Atlantic Airways – DKK 65FO
• Canadian North – Canada SQ
• Condor – (nothing listed)
• Croatia Airlines – SPU airport exempts HR departure tax on all ID00 tickets (where no fare is
collected)
• Frontier Airlines – XF, AY, ZP, US are exempt on duty travel when no fare is collected
• Hawaiian Airlines – surcharge YQ is exempt to other airlines
• Icelandair – Iceland, IS-airport service charge and ZU-passenger fee are exempt for crew
traveling on duty
• Luxair – YQ taxes
• Virgin Atlantic Airways – exempt WC for South Africa and US/AY/XF and YQ for the US
• WestJet – XT, YQ
Tax Survey Results
Question 3: Are there any worldwide tax exemptions on ID tickets that you
require clarification? If Yes, please list the country/city and the tax that is
exempt in the comment box:
Yes = 8
No = 44
No reply = 188
Tax Survey Results
Question 3: Are there any worldwide tax exemptions on ID tickets
that you require clarification? If Yes, please list the country/city and
the tax that is exempt in the comment box:
Yes = 8
No = 44
No reply = 188
Carriers answering Yes to Question 3:
• Adria Airways – A few countries/airports used YQ code for security/insurance
which create(s) confusion as YQ need(s) to be used for fuel surcharge and the
correct code for security/insurance is YR
• Air France – A few countries/airports now use Q code or YQ code to levy some
new charges: HKG/TYO (Q), SEL (YQ)…..Those taxes are used for
security/insurance. It creates confusion as it is the same code used for fuel
surcharge (not applicable within staff industry)
• Alaska Airlines – Canada – YC, XY, XA, SQ, XG on zero value tickets for duty
travel
• Czech Airlines – US – US, ZP, XF
• Hawaiian Airlines – YQ, AY
• Lufthansa – Taxes for Mexico and different zones, taxes based on percentage
ratios e.g. Columbia
• Swiss – HKG departure tax which is in Fares as Q and not normal in tax boxes
• WestJet – UK, France
Tax Survey Results
Question 4: Do you have any other comments with respect to
application of taxes?
Yes = 9
No = 46
No reply = 185
Carriers Adding Comments to Question 4:
• Adria – 1)in myIDTravel are mention of some tax exempt – could be checked with result in
survey 2)authenticate source from where we can get this info – for example you will click on
city pair and sys will show you which tax are exempt
• Air France – how can we use the GDS to automate such taxes: current practice to use ID90N2 is
irrelevant in most cases
• Alaska Airlines – is it possible to add something similar to what we have for infants when
leisure/duty is zero value? EXCEPT PASSENGER TYPE INF WHEN FARE IS ZERO -0• Brussels Airlines – It might be interesting to check with Lsy the list of exemptions as published
in myIDTravel
• Czech Airlines – there are few taxes where the application is a bit problematic in case of ID
tickets, e.g. Sri Lanka – Sri Lanka Intl PTA Surcharge / EJ //Cost Rica – baggage inspection
fee/A1, Boarding tax/B1
• Lufthansa – would like to have an annual process to revalidate the worldwide taxes
• Qatar Airways – would like to have a list of all taxes exempted for ID travel. Alternately, an
authentic source from where we can get this info.
• Swiss – an overview for exemption would be handy
Tax Survey Results
Summary
Of the participating carriers, 14 say their country has some tax
exemptions. As you can see from the survey, there is confusion. Since
the tax rules are open to interpretation ZED/MIBA will work with IATA
to provide a document listing exemptions and to clarify the wording.
The survey remains open. If you have not participated, we would
appreciate your comments.
ZED-MIBA Working Group
MADRID 26-27 JANUARY 2016
UK-APD - Update
18
Re-cap of issue
o From 01 March 16 young people aged 12-15 would be exempt from
paying UK departure tax (when travelling in basic economy class) for
all flights departing from any UK airport
o Exemption has to be proved by presence of age and date of birth in
the passenger name record of the transporting airline
o ZMF, and the airline industry at large, had no existing way to identify
or price these passengers
19
ZMF solution
o Shared at Frankfurt Workshop in September 2015
o New designator of ZYP to be added to the ticket to identify this passenger type
o Online vote – passed
o Airlines must work with their internal departments and service provider to enable
in time – from a booking/faring and listing perspective
N.B. it was deemed too confusing to only employ the use of this designator for
journeys involving travel ex-UK. Therefore it was accepted that it would be used
for all journeys (unless bilaterally agreed)
20
Fares Filing solution
o New PTC tabled with ATPCo
o Passenger type code Znn (where nn=age) to trigger the following:
- adult fare
- GB exempt
- ZYP added as ticket designator
N.B.
As it was deemed inefficient to create a corresponding GB tax-exempt PTC for every PTC that
includes passenger types under 16 years, a decision was made to use just one, Znn @ the
ZEA level and accept that 12-15 year olds are not described in accordance with their
relationship to the employee
21
CAT25 – Znn/ZYP
22
CAT25 – ZEA
23
myIDTravel
o Finally agreed to fund solution to suit all
permutations/carriers – though it was a grey area as to who
would fund this.
o I have fielded questions from Klaus Michel and as necessary
sought answers from my interline pricing teams relating to
outstanding quandaries and issues
o Have tested with a few carriers who have approached me
24
What issues have you encountered?
• Open discussion
25
ZED-MIBA Forum Workshop
Madrid, 26th – 27th January 2016
Fee for coming year to be set in October
the previous year
26
Current situation
Currently, the fee for the current year is determined and advised to
the Members at the AGM. The fee includes
• the IATA administration fee (fixed);
• website running costs (if not covered from the existing funds); and
• website enhancements costs if voted for at the AGM.
In the ISTA agreement, there is no specification or time frame setting
the fee determination.
27
Situation / problem
As the AGM is usually held in March or April and the budgeting for the
coming year is done in September / October / November the previous
year, it is complicated to predict and budget an amount that is not yet
known.
The cost cutting is a big issue and thus, the budgeting is very important
throughout the industry.
28
Proposal
For 2016, a voting paper will be presented at the AGM proposing
the website running costs for 2016 & 2017 to be covered from
the existing funds.
There are no website enhancements planned for 2016.
The IATA administration fee is fixed at 250 USD.
29
Proposal
Thus, if the proposal for the website running costs for 2016 and 2017
passes, for 2016, the fee is 250 USD only.
For 2017, the same would apply. During AGM 2017, it will be clear if we
can cover the website running costs for next year (2018) too (and a voting
will be performed).
Thus, the proposal is to determine the fee for the FOLLOWING year at the
current year AGM. If there is any project involving a fee increase at any
AGM, such increase shall be applied for next year fee.
30
Proposal
EXAMPLE
At AGM 2017, it will be clear whether we have any funds left for
website running costs of 2018.
There would be a voting on a project involving a fee of 45 USD
per member.
The fee for 2018 will be as follows:
-
IATA administration fee
USD 250
-
Website running costs for 2018
USD 100
-
Project
USD 45
TOTAL
USD 395
31
Issues to be solved
•
What if there is a project requiring immediate action?
•
Shall we keep a minimum contingency fund (e.g. USD 15,000) for
such situations?
•
Do we need to vote for this principle and update the ISTA
accordingly?
Proposals and comments welcome
32
End of day One
33
Welcome back
ZED MIBA Working Group
34
Fares
Fares consistency
Economy versus Premium Economy versus Business
Working Group 26-27 January 2016
Fares adjustment 1st November 2015
The adjusted fares to be used as of 1st November 2015 were calculated and
presented in FRA workshop.
Since the vote of AGM 2015, it was the first time that new fares were
introduced:
• Lower fares for Business Medium positive space (150$
to 200$ lower)
Fare type: Business Positive space (CIDM**S1/C1- CIDZ**R1)
Medium
ZM/MM
• Premium Economy fares
USD Fare
1-nov.-14
286
376
446
656
956
976
1056
1256
36
1306
USD Fare
Scale AGM 15
172
202
302
502
602
702
902
1102
1302
Working Group 26-27 January 2016
Side effects of the new pricing structure 2015
Remainder of the principles of the pricing structure:
• The baseline is Medium fare level, zone 1, in Economy and Business
classes of service
• Fare amounts for ZM level increase zone by zone by a predetermined fixed
amount
• Fare amounts for each fare level (i.e., Low and High) are determined by
applying a predetermined amount above or below the Medium fare level
• New Premium Economy fares are based on Economy fares
• The adjustment process is applied to baselines and all other fares are
being calculated with predetermined amounts
37
Working Group 26-27 January 2016
Change of the pricing structure?
SITUATION/ PROBLEM
• Currently, there are 4 base line fares: ZM zone 1 for Economy and
ZM zone 1 for Business (space available and positive space).
• All other fares in Eco and Business are determined by applying a
predetermined amount above or below baselines
• Because of this pricing structure, Premium Economy fares might
result in higher fares than Business
38
Working Group 26-27 January 2016
Example of positive space fares
 All fares are based on the determination of the baselines
39
Working Group 26-27 January 2016
Example of positive space fares: Nov 2015
High
Zone
Distance in miles
USD Fare
1-nov.-14
1
1 - 450
YIDMH1S1/C1- YIDZH1R1
ZH/MH
ZH/MH
USD Fare
New USD Fare
Scale AGM 15
1-nov.-15
167
167
Fare type: Business Positive space (CIDM**S1/C1- CIDZ**R1)
+ 91 $
ZM/MM
New USD Fare
01-nov-15
172
158
Fare codes (bilaterally
agreed)
ZM/MM
USD Fare
Scale AGM 15
ZM/MM
New USD Fare
01-nov-15
xIDZM1S1/C1/R1
167
161
Distance in miles
1 - 450
ZM
161
ZM/MM
USD Fare
Scale AGM 15
USD Fare
1-nov.-14
1
Pricing structure
2015
Baseline
Medium
Zone
Pricing
structure
CIDMM1S1/C1- CIDZM1R1
286
Fare type: Economy Space Available (xIDM**S1/C1- xIDZ**R1)
Zone
1
Distance in miles
1 - 450
 We had to adjust the Business fare to 161 USD for zone 1 Business Medium November 2015
40
Working Group 26-27 January 2016
Change of the pricing structure?
SOLUTION/ PROPOSAL
• Keep 2 base lines for ZM zone 1 Economy only (with a
yearly adjustment)
• Create an add-on for Business Medium zone 1 based on
the High Economy level
Business baseline zone 1 =
High Economy Z1+ a premium of 5$
 Because Premium Economy Medium = Economy High, Business
levels will always be above Premium Economy fares.
41
Working Group 26-27 January 2016
Change of the pricing structure?
Example for space available fares:
Business zone 1 =
High Economy Z1+ a premium of 5$ =
Medium Economy Z1 + 25 $
Fare type: Economy Space Available (YIDZ**R2)
Zone
1
Distance in miles
1 - 450
MEDIUM
29
LOW
Baseline
HIGH
20 (*)
ZM Eco
-10 $
ZM Eco
49
+ 20 $
Fare type: Business Space available (CIDZ**R2)
Zone
1
Distance in miles
1 - 450
MEDIUM
54
ZM ECO
LOW
+ 25 $
ZM Business
HIGH
44
-10 $
ZM Business
74
+ 20 $
Fare type: Premium Space Available (WIDZ**R2)
Zone
1
Distance in miles
1 - 450
MEDIUM= ZH Economy
49
Z1 ZH Eco
ZL = ZM Economy
ZH= ZH+ZL Economy
29
69
42
Z1 ZM Eco
ZH+ZL
Working Group 26-27 January 2016
Change of the pricing structure?
Example for space available fares 2015
Fare type: Business Space available (CIDZ**R2)
Zone
Distance in
miles
MEDIUM
LOW
HIGH
New
2015-16
New
2015-16
New
2015-16
1
1 - 450
54
52
44
42
74
72
2
451 - 750
74
72
64
62
94
92
3
751 - 1600
84
82
69
67
114
112
4
1601 - 3200
174
172
124
122
274
272
5
3201 - 4080
189
187
134
132
299
297
6
4081 - 5000
199
197
139
137
319
317
7
5001 - 6100
299
297
219
217
459
457
8
6101 - 7100
399
397
269
267
659
657
9
7101 - 9999
489
487
309
307
849
847
43
Working Group 26-27 January 2016
Change of the pricing structure?
Example for positive space fares:
Business zone 1 =
High Economy Z1+ a premium of 5$ =
Medium Economy Z1 + 96 $
Fare type: Economy Positive space (YIDM**S1/C1-YIDZ**R1)
Zone
1
Distance in miles
1 - 450
MEDIUM
70
LOW
Baseline
HIGH
36
ZM Eco
-34 $
ZM Eco
161
+ 91 $
Fare type: Business Positive space (CIDM**S1/C1- CIDZ**R1)
Zone
1
Distance in miles
1 - 450
MEDIUM
166
ZM ECO
LOW
+ 96 $
ZM Business
HIGH
75
-91 $
ZM Business
350
+ 184 $
Fare type: Premium Positive Space (WIDM**S1/C1- xIDZ**R1)
Zone
1
Distance in miles
1 - 450
MEDIUM= ZH Economy
161
Z1 ZH Eco
ZL = ZM Economy
ZH= ZH+ZL Economy
70
197
44
Z1 ZM Eco
ZH+ZL
Working Group 26-27 January 2016
Change of the pricing structure?
Example for positive space fares 2015
Fare type: Business Positive space (CIDM**S1/C1- CIDZ**R1)
Zone
Distance in
miles
MEDIUM
LOW
HIGH
New
2015-16
New
2015-16
New
2015-16
1
1 - 450
166
161
75
70
350
345
2
451 - 750
196
191
140
135
460
455
3
751 - 1600
296
291
145
140
550
545
4
1601 - 3200
496
491
310
305
800
795
5
3201 - 4080
596
591
410
405
1150
1 145
6
4081 - 5000
696
691
420
415
1200
1 195
7
5001 - 6100
896
891
650
645
1350
1 345
8
6101 - 7100
1096
1 091
750
745
1500
1 495
9
7101 - 9999
1296
1 291
875
870
1650
1 645
45
Working Group 26-27 January 2016
Fares
Premium Economy prime code W
Working Group 26-27 January 2016
Updated IATA resolution 728
Passenger Tariff Conferences Composite meeting in October 2014
adopted changes to its Resolutions to provide a framework under
which airlines can introduce interlineable fares for their premium
economy products.
To ensure that airlines have sufficient time to prepare, 1 October 2015
had been established as the implementation date by the Passenger
Tariff Conferences Composite meeting and the Passenger Services
Conference meeting in October 2014.
47
Working Group 26-27 January 2016
Updated IATA resolution 728
48
Working Group 26-27 January 2016
Change within ZMF documents
2 documents need to be updated:
• ISTA
 Add the prime code W for Premium Economy
49
Working Group 26-27 January 2016
Change within ZMF documents
• Appendix fares
 Add the prime code W for Premium Economy
 Add the pricing structure for Premium Economy
50
Working Group 26-27 January 2016
Cooperation with
IATA
Passenger Conference
51
Working Group 26-27 January 2016
Kick-off meeting
Date: 24 November 2015
Place: IATA Geneva
Participants:
ZMF: Isabelle & Ivana
IATA: Eric Leopold (Director, Transformation)
Alban Sato (Manager, Tariffs and Res. Standards)
Henry Coles (Manager, Airline Distribution Standards)
Valérie von Glasow (Member Service Centre)
52
Working Group 26-27 January 2016
General conclusions
IATA has confirmed member airlines can join Extranet sites to
access:
•
•
Meetings calendars
Meetings agenda and other documentation Memos and other
documents
Smaller sessions or conference calls to be held between ZMF
Council representatives and IATA (Alban, Henry and Dave).
53
Working Group 26-27 January 2016
IATA Standard Setting Activity
•
Resolutions require unanimous agreement of accredited representatives
participating in Conference.
•
Representatives are designated by airline CEOs, and can exercise the airlines
vote.
•
Some resolutions (e.g. IATA Reso 788) require agreement from both
Passenger and Cargo Services Conferences.
•
Changes to Recommended Practices require a 2/3 majority.
•
Changes require endorsement of process-owning committees, eg. Ticketing or
Reservation Committee.
ZMF members are encouraged to coordinate with their respective airline’s
representatives at the conferences and working groups to obtain the
necessary agenda/reports and ensure that they are aligned
54
Working Group 26-27 January 2016
IATA Projects (*)
•
IATA Consolidated Exchange Rate (ICER) - implemented
•
New Distribution Capability (NDC) - ongoing
•
Review of taxes - ongoing
(*) Projects that may have an impact on ID Travel
55
Working Group 26-27 January 2016
IATA Projects – New Distribution Capability (NDC)
• Similar concept as used by the low-cost carriers, i.e. direct
interaction between airlines and the customer via an XML-based
data transmission standard
• NDC is optional, but gives airlines the capability to
•
Control of inventory
•
Control pricing, possibly without using filed content
56
Working Group 26-27 January 2016
IATA Projects – New Distribution Capability (NDC)
Current distribution process
Fares
Schedule
GDS
Travel
Agents
Availability
Travelers
e-commerce
engine
Future with NDC
Airlines
(Airlines offer
Management system
Content
aggregators
(GDS / platforms)
= NDC
57
Travel
Agents
Travelers
Working Group 26-27 January 2016
IATA Projects – New Distribution Capability (NDC)
• Some pilots have begun using some messages.
• NDC = indirect distribution channel, thus, for the moment NDC is
dedicated for travel agents and corporates ONLY
• ID tickets are distributed through direct channel, thus, no impact at
this stage
• Further details at www.iata.org/ndc
Future…
XML standard might be introduced for interlining too
The future of EDIFACT message standard maintenence is also being investigated.
58
Working Group 26-27 January 2016
IATA Projects – IATA Consolidates Exchange Rate (ICER)
• ICER is a single source of exchange rates applied to convert
fares and charges from one currency to another
• Already implemented by GDS pricing engines for pricing and
ticketing since 1 April 2015
• Can be subscribed for a fee, and is updated on a daily basis.
• Includes specific local restrictions (e.g. Venezuela)
59
Working Group 26-27 January 2016
IATA Projects – Review of complex taxes
• IATA & ATPCO are currently reviewing complex taxes
• ZMF will provide IATA with the results of our survey
• Update of taxes is under the responsibility of each carrier
• A dedicated area for ID exemptions could be considered within
TTBS (Ticket Tax Box Service) report
60
Working Group 26-27 January 2016
AGM 2016
• Industry changes – open discussion (retirees in the mandatory category,
definition of parents, siblings, dependent child)
Peter / SK
Working Group 26-27 January 2016
AGM 2016
• Break-out sessions
• Fares & Taxes?
• Website (online concurrence tool, new design)
• ZMF Basics & news (Znn/ZYP, Prime code for Premium Economy)
• Other sessions
• New members & Members‘ duties
• Meet your Council
Working Group 26-27 January 2016
AOB
• None received
Working Group 26-27 January 2016