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Baggage Allowance
and Charges
Meeting Rules
• This meeting is being conducted in compliance with the Provisions for the Conduct of
the IATA Traffic Conferences and ATPCO’s codes of pro-competitive conduct for
industry meetings.
• The purpose of the meeting is to discuss opportunities to make the distribution and
interpretation of tariff-related data more efficient. It is important that participants
conduct themselves in a manner consistent with IATA & ATPCO’s industry-wide, pro-
competitive mission Because some, if not all, participants represent companies that
compete with one another, we must be careful not to engage in conduct that could be
deemed a violation of any antitrust laws.
• Pursuant thereto, this meeting will not discuss or take action to develop fares or
charges, nor will it discuss or take action on remuneration levels of any intermediaries
engaged in the sales of passenger or cargo air transportation.
• This meeting also has no authority to discuss or reach agreement on the allocation of
markets, the division or sharing of traffic or revenues or the number of flights or
capacity to be offered in any market.
• Participants are cautioned that any discussion regarding such matters or concerning
any other competitively sensitive topics outside the scope of the agenda, either on the
floor or off, is strictly prohibited
Mission
Create a comprehensive global repository of baggage
rules that will be used to automate the application of
baggage allowance and charges on all itineraries
including those governed by IATA Resolution 302.
Collect baggage rules of at least 200 airlines by
September, 2010
Major system suppliers and internal airline systems are
accepting and processing information by March 31, 2011
Meeting Objectives
• Present and validate the ATPCO approach and its
coverage in terms of functionalities, role and required
information as well as data collection / distribution and
technical solution
• Identify the potential gaps & impacts along the
baggage chain, taking into account the airline needs
• List what needs to be done by ATPCO, the airlines
and system providers to prepare for automation prior
to April 2011
• Introduce on how the project will progress as a joint
effort between the ATPCO / IATA and the industry.
Baggage Allowance
and Charges
ATPCO Status
Baggage Rules Lifecycle
Baggage Status and Timeline
• ATPCO development effort begins
• Collection of baggage data continues
• Industry communication and tracking
plan developed and implemented
• Optional Services approach • ATPCO system in production
proposal developed • Production subscriptions available
• Validation initiated using carrier • Industry testing / validation
data
01Q10 02Q10 03Q10 04Q10 01Q11
• ATPCO Milestone Process initiated
• Industry discussion / Feedback • Data base build completed
• IATA Resolution 302 postponed • System test data availability
• Initiated collection of baggage data
• ATPCO internal requirements completed
Baggage Allowance
and Charges
IATA Status
The Airline Industry position
The IATA Board of Governors
Has endorsed the launch of a new IATA StB Project to engage all stakeholders in accordance
with the proposed project plan to be compliant with the new automated baggage rules by the
end of March 2011
Problem
• Traditional baggage rules especially for interlining have been based on IATA
The
Resolutions 300/301 Piece and Weight System.
traditional
• Many carriers have used these rules as default rules for their own baggage
approach…
rules policies and default rules are applicable to interline journeys.
• Airlines are increasingly defining their own baggage allowances and
charges in accordance with their own commercial policy and are moving
…that is no away from simple baggage policies and default rules.
longer • The existing simplified standard approach to defining baggage allowances
working and related charges is out of date, especially for interline.
• This will affect on average 15% of your passengers travelling on an interline
journey.
Standardization is being lost – Opportunities to interline bags are being lost
Example of the Problem
Journey GVA BB X/AUH CC X/BKK DD BJS Y Class
- Passenger & baggage through checked-in to BJS
- With 2 bags to check for a total of 36K
YESTERDAY & TODAY
Carrier filed baggage rules
Simply allow 20K and charge 16K excess
BB: 20K allowance
(interline standard rules).
CC: Nil: pay USD50.00 per checked baggage
DD: 23K allowance
TOMORROW
Reso 302 defines whose rules will apply. In this
case it should be CC rules – most significant.
Issue
• The check-in agent does not know easily
which carrier rules shall he/she apply.
• He/she cannot do this job on all worldwide
itineraries with so many interline journeys.
Threats
With this erosion of standard baggage policies, baggage interlining is facing increasing
challenges, leading to inconvenience and confusion for passengers and check-in staff, and
operational inefficiencies for airlines.
• Inaccurate baggage allowance cost calculation representing a loss of revenue for
interlining airlines
Ticketing • Less of efficiency as manual process and still inaccurate
• Lack of cost transparency exposing the passenger to bad surprises and additional costs
• Passenger check-in process longer than expected
• Risk of loss of revenue when not applying correctly baggage rules
Check-in
• Process for charging baggage excess is time consuming as manual
• Customer satisfaction impacted
Revenue
• Results in interline disputes
Accounting • Results in rejecting interline baggage for through check-in
& Auditing
Solution: A need for baggage rules to be automated
To fully handle the application of baggage allowances, charges and selection
The ATPCO
of governing carrier by providing a filing architecture for airlines for their
solution
baggage policies and a databank for system providers.
• All airlines are required to file their baggage policies with ATPCO.
The
• All airlines are required to integrate automated baggage rules into their
airlines
systems.
The Reservations, pricing, ticketing systems as well as check-in systems are
suppliers required to integrate this data into their systems and provide a user interface.
The full automation of baggage rules will allow the airlines to sell easily, transparently and
accurately their baggage product via any distribution channel and check-in system.
The IATA role and the target
To support a strategy to rapidly implement the automated solution and get all
The IATA role
airlines aware of that they can build their internal implementation strategy
The end of traditional baggage rules is definitively scheduled for 31st of March
2011:
• All airlines will be impacted, which requires a strong engagement and
The involvement from all airlines
stakeholder • All GDS/CRS and DCS systems are impacted, which requires a real
engagement engagement from all suppliers
• The ATPCO solution needs to be ready on time, be tested on its own and
be tested when integrated with other updated provider systems
• All airlines to file baggage rules by September 2010
The target • All airlines should be ready by March 2011 in GDS/CRS/DCS
• System Providers to be ready
The Project requires an aggressive
planning
Work to be done
Work achieved
Q2 2010 Q3 2010 Q4 2010 Q1 2011
ATPCO product
design complete
SG Board SG Board Expiry of
traditional
2008
ATPCO/IATA All airlines to send their filing
Industry standard to Joint engagement to ATPCO (end of Sep)
baggage
reflect Industry market formalization rules
transformation defined
ATPCO Testing
solution the Rollout
Joint IATA/ATPCO delivery solution
effort for Industry
2009
awareness (webinars)
Lead with ATPCO the ABRTF (Automated Baggage Rules Task Force)
Nomination of airline Meeting (June) Meeting (Sep) 28-30 Sep
champions
to be confirmed
Airline Industry survey
for Market readiness
GDS & DCS system engagement and adaptation
2010
Mail vote to extend
300/301 Develop & launch Industry
engagement (Campaign) and
DoT approval to tracking of activities
extend 300/301 to Tracking progress of airlines, CRS/GDS & DCS suppliers
31Mar 2011.
Baggage Allowance
and Charges
Proposed Solution
and Processing
Overview Proposed Solution
Questions raised to date:
– Date processing
• Passenger ticketing dates
• Passenger travel dates
– Whose rules apply
– Reissues and Refunds
Overview Proposed Solution
• ATPCO Baggage Working Group Solution
• Optional Services
• Mapping the Solutions
• Included Functionality
• Required Enhancements
Overview Proposed Solution
Baggage Optional Services
• Itinerary analysis (B0) • Services (S5)
• Whose rules Discussion
apply? (B1) • Concurrence (S6)
Future?
• Embargoes (B2) • Provisions (S7)
• Allowance (B3)
• Charges (B4)
Overview Proposed Solution
Allowance: “Who, When, Where”
Ticketing dates Equipment
Travel dates Tariff/Rule
Passenger type Fare paid
Frequent flyer status Account code
Geography Ticket designator
Cabin/RBD Point of sale
Carrier/Flight
Overview Proposed Solution
Charges: “Who, When, Where, How Much”
Ticketing dates Equipment
Travel dates Tariff/Rule
Passenger type Fare paid
Frequent flyer status Advance purchase
Geography Account code
Cabin/RBD Ticket designator
Occurrence Point of sale
Carrier/Flight Fee
Overview Proposed Solution
• Public and private data
• Full Optional Services capabilities with
Extensions for baggage requirements
• Optional Services shared services
Overview Proposed Solution
• New Service Type indicators
– A = Allowance
– C = Charges
• Sub Codes
– Allowance: generic
– Charges: identifies bag type
• Journey Geography
Overview Proposed Solution
• Weight/unit
• Number of pieces
• Occurrence
• Charges
– Specified charge
– Percentage of normal one-way fare
– Mileage
– Application per piece or kilo
Overview Proposed Solution
Specifying free baggage allowance:
• Generic Service Type
• Text Table 196
– Formatted text for identifying specific Service
Type codes included in allowance
Baggage Lifecycle
• Collection / Distribution
– Centralized repository
– Baggage Template
– Online Access
• Application to Passenger
– Distribution and Data applications for system for
processing
• Revenue Management
– Access to information
• Supporting Processes
– Reservations, Ticketing, Revenue Accounting
Collection / Distribution
Instruction Template
Carrier Sub- Service Group Sub Commercial Attributes 1 Attributes 2 EMD RFIC Display SSR MSG Booking Note Text
Code Type Group Name TYPE Code Options Code Method
Collection / Online access
Services Record (S5)
For Baggage allowance, Type will be A.
For Excess Baggage charges, Type will be C.
Provisions (S7)
For Baggage allowance, Type will be A.
For Excess Baggage charges, Type will be C.
New value for Journey application.
Provisions (S7)
New fields for Baggage to cover both
Piece and Weight systems.
Provisions Details - Allowance
Provisions Details - Allowance
Provisions Details - Charges
Provisions Details - Charges
Distribution
• Optional Services Subscriptions
• Data export
• Government Presentation
– Online display in GFS continues to be
maintained and aligned with Optional Services
Optional Services – Data Export
Government Presentation
Government Presentation
Baggage General Rules
Application of Data to Passenger
Review of summary document…
Baggage - Revenue Management
• Online data access
• Subscriptions
• Download
• Total Price
Baggage General Rules
Baggage General Rules
Baggage General Rules
Baggage Allowance
and Charges
Supporting Processes
Baggage – Supporting Processes
By the close of this session you should:
– Understand steps required in the baggage
sales process
– Be able to identify critical path items:
• Using current processes
• Moving to the future of baggage processing
Baggage and Optional Services
• Optional Services produced a unique opportunity as:
– There are many different types of fee
– No easy all-inclusive method for reservation, ticketing, and reporting
– Diverse ticketless solutions created for one off fees (e.g. seats)
• Baggage has the advantage of already having a
supporting infrastructure
Processes
• There are several supporting processes
which must be aligned to ensure a
comprehensive solution to processing
allowance and charges:
– Reservations
– Ticketing
– Capture of use of baggage (flown/used)
– Reporting to Revenue Accounting
– Interline settlement of bags
Definitions
Term Definition
ARC CAT Sales accounting file of US Agency transactions sent to carriers by ARC
BSP HOT Sales accounting file of non-US Agency transactions sent to carriers by
IATA BSP
EMD Electronic Miscellaneous Document, an enhanced and paperless version
of the MCO
Association Linking the coupon use of the EMD to the passenger flight coupon of the
Electronic Ticket
Booking Source The entity initiating the booking of the service
Member The airline entity confirming and providing the service
SSR ASVC an interactive booking message between the Booking Source and the
Member to complete an “additional service” transaction
Online transaction An itinerary is wholly operated by the Validating Carrier
Interline transaction An itinerary in which at least one segment is operated by a carrier other
than the Validating Carrier
Approach
Late Revenue
Today
2010/2011 Optimizing
Excess Baggage ASVC to reserve
In house ticket and use eMCO or
SSR XBAG ticketless solution
ASVC
Associated EMD
ASVC to reserve
MCO issued and
and use standalone
Agency exchanged at the
EMD or ticketless
airport
solution
Baggage – Existing
Processes
Baggage Flow - Agency
• Once the excess rate and amount has been established:
Agency issues an excess baggage Agency issues an MCO specified for
ticket use for excess baggage
Document accepted at check in as pre- Document exchanged at ticket sales at
paid baggage airport for airline excess baggage ticket
Usage coupon sent to revenue accounting
Sold on own airline ticket stock and Sold on other airline ticket stock and
accounted to revenue accounted to revenue and billed to the
interline partner
Value of Central Rules Data
• If the rules are known to the agency for all
interline baggage:
– Calculation can be made at point of sale, not
wasting time at the airport
– Avoids adjustment and exchange processing if
the agent can issue an XSB ticket
The Down Side
• The current baggage ticketing process:
– Is highly paper based
– Focused heavily on airport resource
– Requires the paper coupon to be “stapled” to an ET
– Difficult to revenue manage and revenue account
– Often leads to loss of coupons and loss of revenue
– Disengages the travel agency from the process
• All tangible reasons to move forward with a
comprehensive solution
The Upside for Baggage
• Baggage has four major advantages over
other generic “optional services”:
– It is one concentrated high volume fee type
– The supporting processes already exist
– Interline is enabled and taking place today
– Economies of scale from optional services
Baggage Allowance
and Charges
Moving forward with
Supporting Processes
Important Factors
• A comprehensive ATPCO baggage pricing
solution can be introduced using all of the
existing infrastructure
however
• There are major benefits to using the
infrastructure being developed around
ASVC and EMD
Value Components
• Addressing the following areas mean that the
solution is comprehensive and optimizes
revenue:
– Booking using interactive SSR ASVC
– Ticketing and fulfillment using EMD-A
– Reporting usage with passenger coupon
– Reviewing and improving interline billing rules
• The following is an overview at 38,000 feet of
each component
Booking
• Booking source generates a request using
the existing SSR (XBAG)
• Member replies with ASVC confirming that
EMD must be issued and the pricing
reference sub code
• Booking source responds that the EMD has
been issued for the baggage and number
Baggage Booking with ASVC
ADVICE
• Booking
source
REPLY confirms that
• Member EMD-A has
responds with been issued
ASVC and the noting EMD
sub code number and
BOOK noting that coupon
EMD-A is numbers
• Booking source required for this along with
requests space service segment detail
using SSR
XBAG
Optimized Booking
REPLY
• Member confirms
service and sub
code
ADVICE
• Booking source is
aware that EMDA is
required and also
sends SSR ASVC
with details of EMD-A
issued for service
BOOK
• Booking source has
access to pricing
information and books
the appropriate
service using SSR
ASVC
Ticketing
• The Electronic Miscellaneous Document is:
– A flexible paperless service document
– A 16 coupon solution for ticketing
– Interactive with the booking method (ASVC)
– Linked to the passenger flight status (ET)
– A comprehensive agency/airline solution
– A way to capture reason for issuance code
– A document for use throughout the life cycle of the fee
• Going into production in the US market in Q3 2010
Ticketing Flow
• Agency requests issuance of ET
• Validating carrier responds (Y/N)
Issuance
• EMD validating carrier performs system update to associate to the ET
• EMD validating carrier performs system update to advise operating
Association carrier of fee
• Operating Carrier of the EMD requests airport control of the ET
Airport • Operating Carrier of the EMD requests airport control of the EMD
Control
Sales Reporting
• The sale of the baggage fee is reported
through existing channels:
– Direct sales (ATO/CTO)
– TCN/ISR through ATPCO (supported Q3 2010)
– BSP for non-US agency (standard only)
– ARC for US agency (supported Q3 2010)
• Revenue accounting posts the forward
sales liability of the baggage fee awaiting
use
Reporting Use
• The association of the EMD means that:
– Use is reported at time of flight
– Non-flight use (e.g. exchange, refund) is also
tracked
– The baggage can be disassociated in the
event of disruption and re-associated to
another ET (e.g. reissue)
Revenue Accounting
• For own sales and own use, auditing can
be more comprehensive with EMD
• Interline billing usage capture
automatically:
– Avoids loss of “stray” excess baggage coupons
– Solves through check issues
Interline Rules
• Rules currently exist, and should be reviewed to ensure that
they are appropriate to the ‘E’ world:
– MPA: Excess Baggage ticket(s) shall be straight rate prorated on
the basis of the original information. In case of incomplete routing,
billing must be in accordance with RAM Chapter A2, Paragraph
1.2.2 – See Section C.
– ACH: Principle: Settlement of excess baggage charges for tickets
involving itineraries governed by DGR-1, Rule 220 shall be based
upon the total charges collected and distributed equally on the
basis of the following formula:
• One coupon involved 100%
• Two coupons involved 50% each
• Three coupons involved 33 1/3% each
• Four coupons involved 25% each
Summary
• For a comprehensive response to
processing allowances and charges:
– Comprehensive pricing solution is a must
– The following components help to deliver full
value:
• Reservation of baggage using SSR ASVC
• Electronic Ticketing of baggage using EMD
• Ensure that sales reporting is implemented at host, BSP, ARC
• Automatic “flown” revenue capture using association
• Clarity of interline settlement rules for baggage bills
Reference Documentation
• You are asked to review 2 documents:
– Baggage Fees: Ticketing and Reporting Data Application
– ATPCO Optional Services Supporting Processes
• These are available online at:
http://webappst.atpco.net/extranet/meetings/html/baggage.shtml
Contact David M Smith on dsmith@atpco.net with any questions.
Baggage Allowance
and Charges
Impacted Areas
Impacted Areas
Feedback where your area of responsibility
is impacted by the upcoming industry
changes.
–Reservations
–Pricing
–Ticketing
–Airport Services / Departure Control
–Revenue Accounting
–Settlement
Baggage Allowance
and Charges
Whose Rules Apply
Whose rules apply
• Whose Rules Apply
– All one carrier / operating and marketing
– Codeshare
– Interline handling of baggage
– Journey versus portion
Whose Rules Apply
Goal: Define a consistent method to
determine the carrier and the travel that
directs the application of baggage
allowance and charges.
Implement the first phase of this solution
by March 2011.
Key Business Requirements*
* This list was gathered at the ATPCO Baggage Working Group. This is not an exhaustive list.
1. Defaults (i.e. international interline = Reso 302, all other
interline = First Operating Carrier)
2. Government reservations
3. Defer to Marketing Carrier
4. Ensuring same concurrence results at ticketing and check-in
5. Vary based on partners/non-partners and journey geos
6. Vary the travel taken to select the baggage data
7. Apply a sector-based application
8. Conflict Resolution
Example – Key Business
Requirements
PAR FRA BKK
Op = XX Op = BB
Mkt = XX Mkt = XX
Ticket Sold 01MAR10 /
Baggage Through-Checked in PAR 01SEP10 through to BKK
Whose Rules Apply – Option 1
• System specific logic
– Agreed upon guidelines for online and non-
IATA governed interline
– Carrier instructed exceptions
– IATA Resolution 302
Whose Rules Apply – Option 2
• Optional Services Concurrence Record (S6)
– Limited functionality
– Modified processing for baggage
– New values for whose rules apply
– Defaults when no data found
• Agreed upon guidelines for online and non-IATA
governed interline
• IATA Resolution 302
Whose Rules Apply – Option 3
• New Optional Services Record
– Based upon Optional Services Concurrence
– Unique processing logic identified
– New values for whose rules apply
– Journey / Portion
– Defaults
• Agreed upon guidelines for online and non-IATA
governed interline
• IATA Resolution 302
Baggage Allowance
and Charges
Business Case,
Communication, &
Project Champion
Plan
The Business Case - benefits (1/2)
Allow to correctly charge for baggage allowance & excess charges
Easier, faster & correct handling of baggage at check-in
Prevent costly and time-consuming interline disputes
Airlines Correct accounting and auditing current baggage policy
Minimize revenue leakage
Fulfill regulations requirements
Opportunity for new revenue streams
Provide correct baggage fares on full journey ticket to the passengers
Travel
Fully automated process for correct pricing and ticketing
Agencies Capability to sell in advance pre-paid baggage and excess baggage
Get a transparent and clear total fare for the entire journey during purchase
Passengers Better able to make decisions as to what baggage to carry
Smooth check-in process
The Business Case – requested
figures (2/2)
• IATA will launch in June a campaign - questionnaire
• This part of the questionnaire definitely needs the support of the airline
Our future
staff, responsible for auditing excess baggage charges collection and
Campaign
baggage fees. Input will be needed from revenue accounting, audit and
control departments.
Excess • What is the % of excess baggage charged that is under collected?
Baggage
• Can we get an estimation of the amount of loss in $US as a result?
Charges
• Do you collect baggage fees, e.g. fee for check-in in a baggage? Yes/ No
Baggage • If yes, what is the % of baggage fees that are not collected or under
fees collected?
• Can we get an estimation of the amount of loss in $US as a result?
The communication & tracking of
the project
In July, IATA will launch a campaign at the Airline Industry to:
• Get Champion names for all airlines (IATA members)
The IATA
• Raise awareness on ABR
Campaign
• Gain knowledge on current airline’s activities regarding ABR
• Gain commitment from airlines to implement ABR
• All airline champions: to register on IATA ABR Extranet site and invite them
to do so for ATPCO site too
The ATPCO &
• Post all key documentation such as ABRTF inputs & outputs, campaign
IATA
results, level of ABR progress, etc.
Extranets
• Coordinate IATA & ATPCO Extranet contents
• Set up forum discussions per expertise
ATPCO Customer Center
IATA Website
Next Steps
• Open Items
• Meeting Schedule
• Implementation Plan
• Communication Plan
