Photo Credit: @DimaBerlin via Twenty20
A 'Pay As You Fly' Model May Start In Germany Soon
A ‘pay as you fly’ model may start in Germany soon. As it works today, paying for a flight happens alongside the confirmation email. Travelers get that email that says, flight confirmed. Along with that, a deduction from the bank or credit card used for the transaction. But, then fliers get to the airport, only for their flight to be canceled.
Sometimes it takes weeks to get the money back on flights, with airlines trying to haggle their way into giving out points for later flights instead of actual cash. Then, there’s the time it takes for the refund to even hit the account again. Some airlines have faced bankruptcy before paying people back for flights they never took. The ‘pay as you fly’ model would benefit Germany, along with every other country in the world.
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How it works:
Because of the horrible trend of cancelations over the summer, Germany wants a ‘pay as you fly’ model adopted instead of the ‘pay upfront’ model used today. With ‘pay as you fly’ the reservation gets booked without taking any money from the guest’s account.
Pay at check in:
Instead, deductions occur at the time of check-in, on the day of the flight. Lower Saxony transport minister Bernd Althusmann said, “This would not only correspond to legitimate consumer interests, but the airlines could also make current processes more efficient or even eliminate them.” Adding, “The subsequent bureaucracy of cancelling ticket bookings and transferring the money back would be over with.”
Currently, Lufthansa started offering the PAYF model to some of its corporate client base in the spring of last year. The flights cost more, giving the airline less of a worry about costs associated with last minute processing fees.
More to come:
The roll-out takes some time however. Christopher Carnier president of The German Business Travel Association reminds listeners, “The booking systems would have to be programmed and supplemented accordingly in order to enable the ‘pay as you check-in’ solution and make it the standard.”