FAQs Optional Payment Charge (OPC)

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1 FAQs Optional Payment Charge (OPC) Version: 2.0 Author: Lufthansa Group Updated: Lufthansa, 20 th March 2012

2 1 Background & Basic Information What is the meaning of Optional Payment Charge (OPC)? Why are the Lufthansa Group Airlines introducing the Optional Payment Charge (OPC) for credit card payments for travel agency sales? Does the Optional Payment Charge (OPC) cover all credit card costs of Lufthansa Group Airlines? Are there already other airlines which charge a fee based on the form of payment used in travel agency sales? Lufthansa Group Airline Concept Is the Optional Payment Charge (OPC) concept identical for all Lufthansa Group Airlines? What is the amount of the Optional Payment Charge (OPC) per ticket and per market? Why is there a differentiation of the Optional Payment Charge (OPC) by destination in Germany and Switzerland? Does the level of Optional Payment Charge (OPC) depend on the country where the ticket is issued? What are the meanings of point of origin (POO) and point of sale (POS)? Are corporate customers exempt from the Optional Payment Charge (OPC)? Which alternative forms of payment exist for travel agency sales? Does the Optional Payment Charge (OPC) apply to all credit cards (including travel office cards)? Which tariffs are exempt from the Optional Payment Charge (OPC)? Will the Optional Payment Charge (OPC) also apply to flights with codeshare/ interline partners? Does the Optional Payment Charge (OPC) also apply to Germanwings flights? Is the Optional Payment Charge (OPC) subject to VAT? If so, where is the VAT shown? Are all sales channels treated in the same way in respect of the Optional Payment Charge (OPC)? Target group & market specifics Are there exceptions for corporate rates? Does the Optional Payment Charge (OPC) have an impact on existing Lufthansa Group Airlines contracts? Can the AirPlus Debit Account and the Degussa Bank Debit Lodge Card (only LH) also be used for tracking purposes in the corporate incentive programmes in Germany and Switzerland? Does the Optional Payment Charge (OPC) also apply to group bookings?... 6 I

3 4 Operational Tariff & Process Topics (for detailed information please see Operational Guidelines) How is the Optional Payment Charge (OPC) implemented and shown in reservation systems (GDSs)? What is the OB fee? Do all airlines apply their form of payment-related surcharges via the OB fee? To which documents of Lufthansa Group Airlines does the Optional Payment Charge (OPC) apply? What is the trigger for calculation of the Optional Payment Charge (OPC)? Is the Optional Payment Charge (OPC) part of the ticket? How can I recognise whether a customer has to pay the Optional Payment Charge (OPC) or not? Which exemptions exist? Does the Optional Payment Charge (OPC) also apply to combinations of airlines/ pure OAL issued on Lufthansa Group Airline ticket stock? Does the Optional Payment Charge (OPC) apply for reissued tickets? How does the Optional Payment Charge (OPC) appear on the invoice in travel agency sales? How is the Optional Payment Charge (OPC) processed in the midoffice systems of travel agencies? How can the customer recognise the Optional Payment Charge (OPC)? Does the Optional Payment Charge (OPC) differ depending on the type of journey, e.g. One-Way/Return? Is the Optional Payment Charge (OPC) refundable?... 9 II

4 1 Background & Basic Information 1.1 What is the meaning of Optional Payment Charge (OPC)? The Optional Payment Charge (OPC) is a fee (surcharge) depending on the form of payment. Since the Lufthansa Group Airlines offer payment options that are free of charge, it is the customers decision which form of payment to choose from and whether an Optional Payment Charge (OPC) applies. 1.2 Why are the Lufthansa Group Airlines introducing the Optional Payment Charge (OPC) for credit card payments for travel agency sales? There are a large number of services associated with using a credit card, most of which benefit the paying customer and which have nothing to do with either the original transport service from the Lufthansa Group Airlines (Austrian, Brussels Airlines, Lufthansa and SWISS) or the actual payment transaction itself. Depending on the type of credit card, the services offered for corporate customers include granting credit periods, providing insurance and providing travel expense accounting systems. Private customers also receive credit periods, insurance services and a wide range of bonuses, depending on their credit card. Despite this, until now the entire credit card costs for purchasing Lufthansa Group Airline tickets have been borne by the Group Airlines. The objective of introducing the Optional Payment Charge (OPC) for travel agency sales is to create a fairer distribution of costs for credit card transactions. The Optional Payment Charge (OPC) applies equally at the same level in direct sales channels (online, station, service centre). Against this background, the introduction of the Optional Payment Charge (OPC) for credit card payments will create a balance between the recipients of such services and those who pay for them. 1.3 Does the Optional Payment Charge (OPC) cover all credit card costs of Lufthansa Group Airlines? No, income from the Optional Payment Charge (OPC) only covers a part of the credit card costs that are charged to Lufthansa Group Airlines. 1

1.4 Are there already other airlines which charge a fee based on the form of payment used in travel agency sales? Yes, a number of airlines have already taken measures to offset payment-related costs.

2 Lufthansa Group Airline Concept 2.1 Is the Optional Payment Charge (OPC) concept identical for all Lufthansa Group Airlines?

2 What is the amount of the Optional Payment Charge (OPC) per ticket and per market?

5 1.4 Are there already other airlines which charge a fee based on the form of payment used in travel agency sales? Yes, a number of airlines have already taken measures to offset payment-related costs. This is the case for both their direct and travel agency ticket sales. Also, other companies have established payment models in which customers take a share of the costs incurred by credit cards. 2 Lufthansa Group Airline Concept 2.1 Is the Optional Payment Charge (OPC) concept identical for all Lufthansa Group Airlines? The Optional Payment Charge (OPC) concept is fully identical for each market/ point of origin for all Lufthansa Group Airlines. 2.2 What is the amount of the Optional Payment Charge (OPC) per ticket and per market? The following illustration gives an overview on the amount and differentiation of the Optional Payment Charge (OPC) per market: Country of Origin Germany Switzerland Belgium Finland Netherlands United Kingdom Defined corporate debit cards*/ Noncredit card payment** OPC amount per ticket EUR 5/ EUR 8/ EUR 18 CHF 6/ CHF 11/ CHF 22 EUR 7.50 EUR 7.50 EUR 7.50 GBP 4.50*** EUR 0 Differentiation DOM/ CONT/ ICONT DOM/ CONT/ ICONT none none none none for all Participating airlines (based on ticket stock) * AirPlus Debit Account (LH, SN, OS, LX), Degussa Bank Debit Lodge Card (LH) ** for specific forms of payment see: l=de&cid=18002 ***OPC applies only for Economy classes. Overview amount of the Optional Payment Charge (OPC) per market 2

6 2.3 Why is there a differentiation of the Optional Payment Charge (OPC) by destination in Germany and Switzerland? The differentiation of the Optional Payment Charge (OPC) (e.g. Europe vs. Intercontinental) best reflects the different pricing based on travel destination and market condition. The differentiation of Europe and Intercontinental is according to IATA standard definition. 2.4 Does the level of Optional Payment Charge (OPC) depend on the country where the ticket is issued? As a basic principle, the Optional Payment Charge (OPC) depends on the point of origin. This ensures that the same level of Optional Payment Charge (OPC) applies regardless of the country where the ticket is issued. This also ensures equal treatment of tickets across all sales channels (esp. travel agency sales and online bookings). 2.5 What are the meanings of point of origin (POO) and point of sale (POS)? Point of origin (POO) means that the Optional Payment Charge (OPC) applies to all tickets originating in Germany, Switzerland, Belgium, Finland, the Netherlands and United Kingdom regardless of the country where the ticket is issued/sold. Point of sale means the country where the ticket is sold and therefore issued. As a basic principle, the Optional Payment Charge (OPC) applies depending on the point of origin and not on the country where the ticket is issued. Examples: Example 1 Example 2 Example 3 Point of Sale = Germany Point of Sale = Canada Point of Sale = Germany Point of Origin = Germany Point of Origin = Germany Point of Origin = Canada OPC OPC No OPC 2.6 Are corporate customers exempt from the Optional Payment Charge (OPC)? In principle, all customers are treated equally based on the chosen form of payment. Corporate customers can use the AirPlus Debit Account or the Degussa Bank Debit Lodge Card (only LH) though, with no Optional Payment Charge (OPC) being charged and without any impact on the corporate incentive programme and reporting functionalities. 3

7 In Germany Pay As you Fly (PAF) rates on the ticket stock of Lufthansa will be exempt until 31 st December 2012 from the Optional Payment Charge (OPC). 2.7 Which alternative forms of payment exist for travel agency sales? Alternative forms of payment with no Optional Payment Charge (OPC) in travel agency sales are: Cash Invoice AirPlus Debit Account and Degussa Bank Debit Lodge Card (only LH) for tickets issued on the ticket stock of a Lufthansa Group Airline (Austrian, Brussels Airlines, Lufthansa, SWISS) 2.8 Does the Optional Payment Charge (OPC) apply to all credit cards (including travel office cards)? Yes, the Optional Payment Charge (OPC) applies to all credit cards, also with no differentiation of the surcharge amount by credit card. 2.9 Which tariffs are exempt from the Optional Payment Charge (OPC)? The Optional Payment Charge (OPC) applies to all tickets of a Lufthansa Group Airline and if form of payment is credit card, regardless of which tariff is selected. Only few exceptions apply, for example for tickets for infants Will the Optional Payment Charge (OPC) also apply to flights with codeshare/ interline partners? The Optional Payment Charge (OPC) depends on the ticket stock on which the ticket is issued. E.g. for all tickets of a Lufthansa Group Airline (ticket stock of a Lufthansa Group Airline), regardless of which airline operates the flight, the Optional Payment Charge (OPC) applies if point of origin is in one of the surcharge markets Germany, Switzerland, Belgium, Finland, the Netherlands and United Kingdom Does the Optional Payment Charge (OPC) also apply to Germanwings flights? As the Optional Payment Charge (OPC) applies depending on the ticket stock on which the ticket is issued, it will also apply to Germanwings flights issued on Lufthansa ticket stock. 4

8 2.12 Is the Optional Payment Charge (OPC) subject to VAT? If so, where is the VAT shown? Whether the Optional Payment Charge (OPC) is subject to VAT or not depends on whether VAT is charged on the specific ticket. If VAT has to be paid on a ticket for a domestic flight, then VAT must also be paid on the Optional Payment Charge (OPC). The VAT amount is therefore included in the domestic Optional Payment Charge (OPC). The VAT is then shown in the same way as the VAT for the corresponding ticket. Please note that the treatment of VAT is subject to the national legislation of the respective countries. Accordingly, this information is subject to possible changes in national legislation and not binding in general Are all sales channels treated in the same way in respect of the Optional Payment Charge (OPC)? The Optional Payment Charge (OPC) is the same for all sales channels (travel agency, online, airport station and service centre). 3 Target group & market specifics 3.1 Are there exceptions for corporate rates? In principle the Optional Payment Charge (OPC) applies equally to all tickets paid for by credit card. In Germany Pay As you Fly (PAF) rates on the ticket stock of Lufthansa will be exempt until 31 st December 2012 from the Optional Payment Charge (OPC). 3.2 Does the Optional Payment Charge (OPC) have an impact on existing Lufthansa Group Airlines contracts? Contractual arrangements are based on net flown revenue. Due to the fact that the Optional Payment Charge (OPC) is not part of the net flown revenue, it has no impact on existing contracts. Thus, no modification is necessary. 5

9 3.3 Can the AirPlus Debit Account and the Degussa Bank Debit Lodge Card (only LH) also be used for tracking purposes in the corporate incentive programmes in Germany and Switzerland? The AirPlus Debit Account and the Degussa Bank Debit Lodge Card (only LH) are admissible as mean of payment and tracking for corporate incentives. There are no restrictions concerning data collection, payments and monitoring in comparison with the AirPlus corporate product and the Degussa Bank Corporate Credit Card used to date. 3.4 Does the Optional Payment Charge (OPC) also apply to group bookings? If the ticket of a person travelling in a group is paid for by credit card, then the Optional Payment Charge (OPC) applies in the same way as for all other tickets. In other words, if a passenger in a group pays for his or her ticket by credit card, the Optional Payment Charge (OPC) applies for this ticket and hence for this passenger. 4 Operational Tariff & Process Topics (for detailed information please see Operational Guidelines) 4.1 How is the Optional Payment Charge (OPC) implemented and shown in reservation systems (GDSs)? The Optional Payment Charge (OPC) is implemented in accordance with IATA standard process as an OB fee. The technical implementation depends on the reservation system (GDS). 4.2 What is the OB fee? The OB fee is the standard IATA process for collecting payment-related fees. The Lufthansa Group Airlines use this standard in order to allow automated processes within the reservation systems (GDSs). 4.3 Do all airlines apply their form of payment-related surcharges via the OB fee? The technical implementation of the payment-related surcharge is defined individually by each airline. The Lufthansa Group Airlines apply the payment related fee by means of the IATA standard process OB fee. This is already carried out in different markets and by different airlines. 6

10 4.4 To which documents of Lufthansa Group Airlines does the Optional Payment Charge (OPC) apply? The Optional Payment Charge (OPC) only applies to first issuance of tickets on the ticket stock of a Lufthansa Group Airline (not on MCOs, re-issue, etc). 4.5 What is the trigger for calculation of the Optional Payment Charge (OPC)? The Optional Payment Charge (OPC) applies to all forms of payments that are entered in the credit card format into the reservation systems (GDSs). The credit card format is the 15- to 16- digit number of the form of payment. Once the number is entered, the reservation system (GDS) automatically checks if an exemption from the Optional Payment Charge (OPC) is defined for this specific range of numbers. For example this applies to the AirPlus Debit Account and the Degussa Bank Debit Lodge Card (only LH). If no exemption is defined, the Optional Payment Charge (OPC) applies. This can lead to the situation where if forms of payment are entered into the reservation system in credit card format, but the actual form of payment is not a credit card, the Optional Payment Charge (OPC) would apply. 4.6 Is the Optional Payment Charge (OPC) part of the ticket? The Optional Payment Charge (OPC) is a component of the final ticket price (grand total) and added to the ticket price including taxes and fees. The Optional Payment Charge (OPC) is not shown on the ticket but on the passenger itinerary receipt (ITR). 4.7 How can I recognise whether a customer has to pay the Optional Payment Charge (OPC) or not? At ticketing, the reservation system (GDS) will check the entered form of payment and whether the Optional Payment Charge (OPC) applies, and, if so, will calculate the fee automatically. In Amadeus a first calculation taking into account the entered form of payment is done at the time of pricing. 4.8 Which exemptions exist? The following tickets are exempt from the Optional Payment Charge (OPC): Infants Redemption tickets (e.g. Miles & More tickets) Rail&Fly in Germany (the rail feeder to an international journey is issued on a separate 7

11 ticket; for this ticket no Optional Payment Charge (OPC) applies) Lufthansa Private Jet Corporate rates: In Germany Pay As you Fly (PAF) rates on the ticket stock of Lufthansa will be exempt until 31 st December 2012 from the Optional Payment Charge (OPC). 4.9 Does the Optional Payment Charge (OPC) also apply to combinations of airlines/ pure OAL issued on Lufthansa Group Airline ticket stock? The Optional Payment Charge (OPC) applies regardless of any other airline participating in the routing. The Optional Payment Charge (OPC) applies if a ticket is issued on the ticket stock of a Lufthansa Group Airline regardless of the operating or marketing carrier, because the credit card costs occur with the ticketing (validating) carrier. The documents of the Lufthansa Group Airlines always start with the following numbers: Austrian Airlines Brussels Airlines Lufthansa SWISS 4.10 Does the Optional Payment Charge (OPC) apply for reissued tickets? No. In accordance with IATA standards, the Optional Payment Charge (OPC) only applies at first issuance of a ticket How does the Optional Payment Charge (OPC) appear on the invoice in travel agency sales? Generally, travel agencies use a midoffice system for generating invoices and customer receipts. As a general rule, the Optional Payment Charge (OPC) is part of the overall ticket price (grand total). Depending on the midoffice provider, the Optional Payment Charge (OPC) might be shown separately for informational purposes How is the Optional Payment Charge (OPC) processed in the midoffice systems of travel agencies? The Optional Payment Charge (OPC) is implemented as an OB fee in accordance with IATA standards. The relevant interfaces to midoffice systems were adopted in 2008/ Given that 8

12 the midoffice systems and their interfaces were also modified to reflect changes in the reservation systems (GDS) according to IATA standard, the Optional Payment Charge (OPC) should be processed automatically. If your invoicing or accounting system (midoffice/ back-office) cannot process this, please contact your system provider How can the customer recognise the Optional Payment Charge (OPC)? How the Optional Payment Charge (OPC) is displayed depends on the reservation system (GDS); by standard, it is a part of the passenger itinerary receipt (ITR). Depending on the midoffice system, the Optional Payment Charge (OPC) might be shown separately on the travel agency invoice Does the Optional Payment Charge (OPC) differ depending on the type of journey, e.g. One-Way/Return? There is no difference between types of journey such as One-Way or Return. The Optional Payment Charge (OPC) applies per ticket including all conjunction tickets Is the Optional Payment Charge (OPC) refundable? In accordance with IATA standards, once the ticket has been issued the Optional Payment Charge (OPC) is non-refundable, as the payment transaction has been completed. The nonrefundability is part of the tariff conditions and included in the fare notes. 9

Introduction of the Optional Payment Charge (OPC) for Credit Card Payments Trade Information Package Optional Payment Charge (OPC)

Introduction of the Optional Payment Charge (OPC) for Credit Card Payments Trade Information Package Optional Payment Charge (OPC) 3 August 2011 The Cost of Credit Card Services today are mainly borne