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DATA APPLICATION - OPTIONAL SERVICES RESERVATIONS, TICKETING, REPORTING, ACCOUNTING and SETTLEMENT

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DATA APPLICATION - OPTIONAL SERVICES RESERVATIONS, TICKETING, REPORTING, ACCOUNTING & SETTLEMENT

Table of Contents 1.0 RESERVATIONS........................................................................................................................................................................... 4

1.1 Availability ................................................................................................................................................................................. 5 1.2 Booking Optional Services ......................................................................................................................................................... 6

1.2.1 Booking Flight Related Services with Existing SSR .......................................................................................................... 7 1.2.2 Booking Flight Related Services with no Existing SSR ..................................................................................................... 8 1.2.3 Booking Non-Flight Related Services ................................................................................................................................ 9

1.3 Payment/ Entitlement for Optional Services............................................................................................................................. 10 1.4 Delivery of Optional Services ................................................................................................................................................... 11

2.0 TICKETING ................................................................................................................................................................................. 12 2.1 Electronic Miscellaneous Document Ticketing Method........................................................................................................... 13

2.1.1 Electronic Miscellaneous Document ................................................................................................................................ 13 2.1.2 Issuance and Association .................................................................................................................................................. 14 2.1.3 Travel Agency Processes .................................................................................................................................................. 18 2.1.4 Consumption of the Service .............................................................................................................................................. 21 2.1.5 Taxation ............................................................................................................................................................................ 22 2.1.6 Fare Calculation Area ....................................................................................................................................................... 23 2.1.7 Credit Card Form of Payment ........................................................................................................................................... 24 2.1.8 Reconciliation of the Ticket to the Delivery of the Service.............................................................................................. 25 2.1.9 EMD Exchange/ Reissue and Refunds ............................................................................................................................. 26 2.1.10 EMD Data Element Matrix ............................................................................................................................................... 27

2.2 Carrier Fee Ticketing Method ................................................................................................................................................... 28 2.3 ‘Other’ Ticketing Method ......................................................................................................................................................... 30

3.0 SALES DATA REPORTING ....................................................................................................................................................... 31 3.1 IATA BSP Sales Reporting ...................................................................................................................................................... 32

3.1.1 DISH Reporting Standards ............................................................................................................................................... 33 3.1.2 Other Considerations for DISH Reporting ....................................................................................................................... 33

3.2 ARC CAT Reporting ................................................................................................................................................................ 34 3.3 Direct Reservations Reporting .................................................................................................................................................. 35


Page 03 Revised 05August 2008

3.4 Industry Sales Record ............................................................................................................................................................... 36 4.0 REVENUE ACCOUNTING ........................................................................................................................................................ 37

4.1 Revenue Accounting for EMDs ................................................................................................................................................ 37 4.2 Revenue Accounting for Carrier Fees ....................................................................................................................................... 38

5.0 INTERLINE BILLING AND SETTLEMENT ............................................................................................................................ 39 5.1 Interlining EMDs ...................................................................................................................................................................... 39 5.2 Coupon Prorate Calculation ...................................................................................................................................................... 41 5.3 Interlining Carrier Fees ............................................................................................................................................................. 43



1.0 RESERVATIONS The reservations process covers the initial request and booking for the Optional Service, followed by the appropriate messaging of Passenger Name Record information to down-line systems which require the information to deliver the right service to the right passenger at the right time. The reservations process comprises two entities, namely: Booking Source: the entity initiating the reservation (for example Amadeus, Galileo, Sabre, Worldspan, airline) Member: the airline upon whose product the reservation is being made (for example Air France, Continental Airlines) The following types of service can be priced within the ATPCO record, and this following table gives a brief summary of how each type relates to reservations and ticketing: Pricing Reservation Considered Ticketing Method Flight Related Service Flight Related Associated Ticket Related Service with Itinerary * Flight Related Standalone Ticket Related Service no Itinerary * Non-Flight Related Standalone Fare Related Service Non-Flight Related Carrier Fee on ET Merchandise Non-Flight related Standalone * Both are coded as ‘Ticket Related’ The following processes are described as part of the Reservations process: (1) Availability (2) Booking (3) Payment/ Entitlement (4) Delivery



1.1 Availability Prior to booking the Optional Service, the Booking Source may filter down the number of Optional Services being displayed based on the passenger itinerary, which may already be known. In order to facilitate this, airlines are able to file a value in DEI503 in Chapter 2 of the Standard Schedules Information Manual (SSIM) which indicates that there are Optional Services available on the flight requested. The current values are as follows:

1 Movie 2 Telephone 3 Telex 4 Audio programming 5 Television 6 Reservation booking service 7 Duty Free sales 8 Smoking 9 Non-smoking

10 Short Feature Video 11 No Duty Free sales 12 In-seat power source 13 Internet access 14 E-Mail 15 In-seat Video Player/Library 16 Lie-flat seat 17 Optional Services

Value ‘17’ will direct the pricing engine/ booking source to read the ATPCO Optional Services records S5, S6, and S7 prior to displaying offers to the passenger.



1.2 Booking Optional Services The reservations process currently uses industry standard formats utilizing a series of messages to describe the booking. These messages and codes are standardized for generic use in interline procedures. For greater detail on specific elements for the reservation process, refer to the ‘Reservations Interline Message Procedures – Passenger (AIRIMP) Manual. An example is the ‘SSR’ (Special Service Request) message which is used where the service is being booked for a specific flight. An example of an SSR request message for an unaccompanied minor reservation (UMNR) is: HDQRMBA .HDQRM1S 061503 HDQ1SQWERTY/89D1/12345678/CBB/1S/T/BO/BOB 1ZIMMER/DANIELMSTR BA 0202Y14MAY LHRCDG HK1 SSR UMNR BA NN1 LHRCDG 0202Y14MAY.UM07 The above example shows the SSR code of ‘UMNR’ for unaccompanied minor along with carrier, boarding point, off point, flight number and date. In other parts of the message, details of the Booking Source, Member, date and passenger name can also be found. All of these details form the PNR which is used as the fundamental booking record to drive ticketing of the itinerary. The booking process may consist of:

(1) BOOK message sent from the Booking Source to the Member requesting the service (2) REPLY message sent from the Member to the Booking Source confirming the service (possibly requiring further action from

Booking Source such as the issuance of an EMD) (3) ADVICE message sent from the Booking Source to the Member advising of a further action (e.g. issuance of EMD)



1.2.1 Booking Flight Related Services with Existing SSR Flight related services which have an existing SSR code – for example unaccompanied minors (UMNR) – will use the existing SSR code for booking and delivery of the Optional Service. This has the advantage that both ATPCO Optional Services subscribers and non-subscribers will use the same process. A new SSR code of ‘ASVC’ for ATPCO Optional Services is used to handle messaging of payment and entitlement information to ensure that the booked service has been paid for. The carrier offering the Optional Service will be able to indicate which SSR code to use for the specific S5 pricing record being processed (e.g. ASVC). An example of the booking, reply, and advice messaging are as follows: BOOK REPLY ADVICE From Booking Source From Member From Booking Source To Member To Booking Source To Member HDQRMBA .HDQRM1S 061503 HDQ1SQWERTY/89D1/12345678/CBB/1S/T/BO/BOB 1ZIMMER/DANIELMSTR BA 0202Y14MAY LHRCDG HK1 SSR UMNR BA NN1 LHRCDG 0202Y14MAY.UM07

HDQRM1S .HDQRMBA 061519 HDQ1SQWERTY 1ZIMMER/DANIELMSTR BA 0202Y14MAY LHRCDG HK1 SSR UMNR BA KK1 LHRCDG 0202Y14MAY.UM07 SSR ASVC BA KD1 LHRCDG 0202Y14MAY.L04/UMNR/ SSR ASVC BA /// UNACCOMPANIED MINOR

HDQRMBA .HDQRM1S 061525 HDQ1SQWERTY 1ZIMMER/DANIELMSTR BA 0202Y14MAY LHRCDG HK1 SSR UMNR BA HK1 LHRCDG 0202Y14MAY.UM07 SSR ASVC BA HS1 LHRCDG 0202Y14MAY.L04/UMNR/ SSR ASVC BA /// UNACCOMPANIED MINOR/1250242345678C1

The Booking Source requests space for an Unaccompanied Minor using the standard SSR message UMNR ‘Need Need’ (NN).

The ‘KD’ message shows the Booking Source that an EMD is required to confirm this service.

The Booking Source appends the EMD number (see Section 2.0) to show payment/ entitlement for the service to the Member.

In the above case, a non-subscriber to the ATPCO Optional Services product would only use the BOOK step and the REPLY step without the SSR ASVC. An unaccompanied minor service has now been booked on the requested flight and the Member can now take all steps necessary to ensure that the service is provided on the indicated flight.



1.2.2 Booking Flight Related Services with no Existing SSR Flight related services which have no existing SSR code – for example In Flight Entertainment – will use the new ASVC SSR code (described above) both for booking and delivery of the Optional Service. As above, the carrier offering the Optional Service will be able to indicate which SSR code to use for the specific S5 pricing record being processed (e.g. ASVC). An example of the booking, reply, and advice messaging are as follows: BOOK REPLY ADVICE From Booking Source From Member From Booking Source To Member To Booking Source To Member HDQRMBA .HDQRM1S 061519 HDQ1SQWERTY/89D1/12345678/CBB/1S/T/BO/BOB 2SMITH/WALTMR/MARYMRS BA 0202Y14MAY LHRCDG HK2 SSR ASVC BA NN1 LHRCDG 0202Y14MAY-SMITH/WALTMR.E23//INFLIGHT SSR ASVC BA /// ENTERTAINMENT

HDQRM1S .HDQRMBA 061519 HDQ1SQWERTY 2SMITH/WALTMR/MARYMRS BA 0202Y14MAY LHRCDG HK2 SSR ASVC BA KD1 LHRCDG 0202Y14MAY-SMITH/WALTMR.E23//INFLIGHT SSR ASVC BA /// ENTERTAINMENT

HDQRMBA .HDQRM1S 061520 HDQ1SQWERTY/89D1/12345678/CBB/1S/T/BO/BOB 2SMITH/WALTMR/MARYMRS BA 0202Y14MAY LHRCDG HK2 SSR ASVC BA HS1 LHRCDG 0202Y14MAY-SMITH/WALTMR.E23//INFLIGHT SSR ASVC BA /// ENTERTAINMENT/1250241234567C3

The Booking Source requests space for In Flight Entertainment using the new SSR message ASVC ‘Need Need’ (NN).



The ASVC is only used for ATPCO priced Optional Services.



1.2.3 Booking Non-Flight Related Services Non-flight related services – for example Lounge Access – will use the new Auxiliary Service code (SVC) both for booking and delivery of the Optional Service, and will not require the use of an SSR (as there are no flights involved). These may be booked without an itinerary, or in connection with an itinerary, as required by the Member. These services may be requested within the same booking for more than one person in a party. An example of the booking, reply, and advice messaging are as follows: BOOK REPLY ADVICE From Booking Source From Member From Booking Source To Member To Booking Source To Member HDQRMDL .MUCRM1A 231051 MUC1A 2GLYIP/NCL7X2063/96129250/NCL/1A/N/GB//GS 2ARENA/BRUNOMR/MARINAMRS SVC DL NN1 ORD 30JUN/E23/LOUNGE ACCESS//NM-1ARENA/BRUNOMR SVC DL NN1 ORD 30JUN/E23/LOUNGE ACCESS//NM-1ARENA/MARINAMRS OSI YY CTCT NCL TRAVEL AGENT

HDQRM1A .MUCRMDL 231051 MUC1A 2GLYIP 2ARENA/BRUNOMR/MARINAMRS SVC DL KD1 ORD 30JUN/E23/LOUNGE ACCESS//NM-1ARENA/BRUNOMR.LOUNGE AT GATE 43 SVC DL KD1 ORD 30JUN/E23/LOUNGE ACCESS//NM-1ARENA/MARINAMRS. LOUNGE AT GATE 43 OSI YY CTCT NCL TRAVEL AGENT

HDQRMDL .MUCRM1A 231051 MUC1A 2GLYIP/NCL7X2063/96129250/NCL/1A/N/GB//GS 2ARENA/BRUNOMR/MARINAMRS SVC DL HS1 ORD 30JUN/E23/LOUNGE ACCESS/0061234567890C1/NM-1ARENA/BRUNOMR.LOUNGE AT GATE 43 SVC DL HS1 ORD 30JUN/E23/LOUNGE ACCESS/0061234567891C1/NM-1ARENA/MARINAMRS. LOUNGE AT GATE 43 OSI YY CTCT NCL TRAVEL AGENT

The Booking Source requests space for Lounge Access using the new SVC message ‘Need Need’ (NN).



The SVC message is only used for ATPCO priced Optional Services.



1.3 Payment/ Entitlement for Optional Services Some optional services may be considered to be free (zero value), and may be offered to the passenger explicitly as value-added services which are included with the fare being purchased. In these cases, the airline offering the service (and therefore coding the pricing instruction) will determine whether or not an accountable document needs to be issued for free services. Where the service has a value, and has been booked as above with the new SSR ‘ASVC’ message for flight-related Optional Services, or the new SVC message for auxiliary Optional Services, an accountable document will need to be issued so that the Member providing the service can ensure payment prior to delivery. This accountable document will generally take the form of an Electronic Miscellaneous Document (see Section 2.1), but by instruction from the carrier can also take the form of a carrier fee on an Electronic Ticket, or any ‘Other’ method (outlined in Sections 2.2 and 2.3). The EMD number sent in the advice message from the Booking Source to the Member constitutes proof positive that the Optional Service being booked has been paid for.



1.4 Delivery of Optional Services Further changes will be required to systems managing the delivery of Optional Services, which are assumed to be fundamentally controlled by the originating PNR message including the booking data elements described above. The following factors will be considered through industry implementation: (1) PNR processing will require the EMD number and so will need changes to accommodate the new SSR ASVC. (2) Delivery on-board flights will generally require DCS messaging changes to incorporate the new SSR ASVC, specifically the PNL

and ADL messages. PFS, PRL, PSM, PIL, and ETL will also need to be evaluated from a DCS standpoint for possible impact. (3) Providers of Optional Services at the airport – airline or non-airline staff – will require the information on booking and entitlement

to be able to provide the service as paid. (4) Catering and seat booking will need to be evaluated for paid and unpaid meals/ seats. (5) Confirmation of passenger receipt of the service (usage) will also need to be considered (see Section 2). (6) Ground Handling will need to be considered.



2.0 TICKETING Once pricing of the appropriate optional service fee has taken place, the transaction will be driven to an electronic ‘ticket’. The vehicle for presenting confirmed service information (data) both to the passenger and to airline systems will depend upon the ‘Ticketing Method’ coded in the pricing record for the priced Optional Service. The three possible ticketing methods for Optional Services are documented under Sections 2.1 (Electronic Miscellaneous Document), 2.2 (Carrier Fee), and 2.3 (Other). The governing standards for procedures and technical messaging of ticketing data can be found in the current version of the Passenger Services Conference Resolutions Manual (predominantly Resolutions 722 and 725) and the ATA Resolutions Manual (Resolution 20.60-20.64). Accounting documents from all three methods will be reported to the airline for accounting and settlement processing via ARC (US Agency Sales), BSP (non-US Agency Sales), and direct reservations reporting systems – to create the revenue accounting record for the airline. This process is described in detail in Section 3.0. For the purposes of this data application: An online transaction is one in which the EMD coupons are wholly operated (delivered) by the Validating Carrier. An interline transaction is one in which at least one EMD coupon is operated (delivered) by a carrier other than the Validating Carrier. Validating Carrier (unless otherwise specified) refers to the selling/ plating/ ticketing carrier for the EMD transaction.



2.1 Electronic Miscellaneous Document Ticketing Method

2.1.1 Electronic Miscellaneous Document The EMD is intended to be a complete replacement for the current paper version of the Miscellaneous Charges Order, the Automated Miscellaneous Document and the Multi-Purpose Document. It is designed as an electronic (i.e. paperless) document which can be used to sell miscellaneous services which are either related to a specific flight (for example excess baggage charges), or standalone (for example a car rental voucher). A standalone EMD can be issued in connection with a ticket (this is NOT the same as association). As with all electronic ticket information, the ticketing data is controlled and managed by the Validating Carrier of the EMD (the carrier issuing the EMD and therefore holding the customer payment for the service). The EMD is controlled by a Reason for Issuance Code (RFI Code) – this is a one-byte field and has values defined within IATA Resolution 722c Attachment C. Each EMD can only be issued for one RFI Code. Within the EMD, there may be different Optional Services described by the Reason for Issuance Sub Code (3 alphanumeric) which references the Service Fee Sub Code as filed by the operating carrier of the fee (or the marketing carrier in the case of a concurrent fee, or the fare owner in the case of a Fare Related Optional Service) in the Record S5. These will be reported at coupon level, and as for a ticket, there can be four coupons per EMD, and up to four conjunctive EMDs issued for the same transaction (equivalent to 16 coupons). The EMD includes but is not limited to the following data categories defined within the EDIFACT message, and also to be reported via sales data feeds: Good for Passage Area, which contains a carrier code, reason for issuance sub code, coupon board point, and coupon off point Fare Calculation Area as required Sales location details such as the agency number Financial amounts such as fare (actually the fee total), tax, total amount as well as coupon values where applicable Carrier Fees (e.g. Credit Card fees) applicable to the EMD Fee Owner, Reason for Issuance Code and Reason for Issuance sub-code In connection with document and coupon numbers (associated EMD only) Fare Calculation Pricing Indicator to show whether the EMD has been autopriced from the records S5-S7 Space for structured fare calculation data when this has been developed by Service Providers



2.1.2 Issuance and Association The key difference between a paper MCO and an EMD is that the EMD coupon can be associated to a flight. This process works by linking the document and coupon number issued (i.e. the EMD number) to the ticket number and the associated flight coupon. However before the EMD can be issued, the following agreements must be in place: The Validating Carrier of the ET is required to have ET agreements with all marketing and operating carriers on the ticket The Validating Carrier of the EMD is required to have ET agreements with the associated ET Validating Carrier, as well as all

marketing and operating carriers on the EMD Consider the following example: Carrier BB issues a ticket: Coupon 1 LHR-CDG XX Coupon 2 CDG-HKG ZZ The next day, the passenger wishes to buy a meal service for both coupons, and requests a display of offered services for the two flights purchased, and to do this the passenger logs onto Carrier XX website. The selling system returns the following choices which match to the itinerary details: XX 840 Chicken Marsala meal XX 841 Scrambled Eggs XX 842 Hot Dog XX 843 Traditional English breakfast ZZ 150 Light snack ZZ 151 Full dinner The passenger decides to purchase a Traditional English Breakfast (XX843) on the XX flight, and a full dinner (ZZ151) on the ZZ flight.



The following steps will now occur to associate the ticket: XX issues an EMD with the two services XX843 and ZZ151 XX sends a System Update message to the Validating Carrier of the ticket (BB) which will include the EMD number and the

coupon number XX sends a System Update message to the Operating Carriers of the individual coupons (in this case only for coupon 2 ZZ) in

case the coupon is already being held in Airport Control by ZZ The EMD value coupon and the ticket flight coupon are now effectively joined for the purposes of usage, in other words the

service will be determined to have been “used” with the associated flight



The process described above is illustrated here:

If the passenger requires another service, a second EMD will be purchased (and so on up to a maximum of 99 EMD’s issued for one passenger).

The EMD can also be disassociated from the ticket using the same System Update message to initiate disassociation. This will be required where an action needs to be taken on the service which is not applicable to the flight to which it is associated.

Validating CarrierEMD(XX)

Validating CarrierET

(BB)

Coupon 1 BA Status ACoupon 2 AF Status A

Operating Carrier Coupon 1XX

Coupon Status O

Operating Carrier Coupon 2ZZ

Coupon Status O

System Update

System Update

Request Airport Control of EMD Request Airport Control of ET

RequestAirport Control

of ETRequest

Airport Controlof EMD



The following rules apply for initiating association and disassociation of EMDs using the System Update message: System Update message for association shall only be initiated by the Validating Carrier of the EMD-A. System Update message for disassociation may be initiated only by:

o the Validating Carrier of the EMD o the Validating Carrier of the ET o a Marketing/ Operating Carrier of the EMD or by a Ticket Handler acting on their behalf.

As a result, the Validating Carrier of the EMD-A may be required to forward the System Update message to the Validating Carrier of the ET and/or to a Marketing/Operating Carrier. Note that the status of the Electronic Ticket flight coupon and the associated EMD coupon are linked through the lifecycle of the transaction, unless that linkage is broken by a process called ‘disassociation’. The process of delinking or ‘disassociating’ the EMD from the flight coupon would be invoked if, for example, a change to the flight occurs (reissue) but the service is not changing. In this case, the service on the EMD coupon can be disassociated, and then re-associated to the reissued ticket.



2.1.3 Travel Agency Processes For carriers wishing to sell services within the travel agency environment, processes are slightly more complex, simply because the Validating Carrier still retains control of the association process. The issuance of standalone services are simply governed by existing MCO Resolutions governing issuance and honoring financial limits to guard against fraud. Consider a similar example to the above, but in this case the passenger is buying both the Ticket and the EMD from the same travel agency location. Validating Carrier Coupon Operating Carrier Board/Off Validating Carrier RFI Sub Code Service BB 1 BB IADJFK NO SERVICE BB 2 CC JFKLHR CC 0C4 Prepay XSB In this case, the passenger purchases the ticket at the travel agency validated on carrier code BB. Then the passenger decides to purchase pre-paid excess baggage on the long haul segment of the journey, which is flown by CC, and so the service (EMD) is validated on carrier code CC. The following steps will then take place: Travel agency generates Issuance message to the EMD validating carrier (CC) Validating Carrier of the EMD (CC) generates Display message to the Validating Carrier of the ET (BB) to check coupon

status Validating Carrier of the ET (BB) responds with a display of the flight coupons Validating Carrier of the EMD (CC) responds to the Travel Agency with a positive Issuance response message

FLIGHT COUPON DATA EMD (Service) COUPON DATA CONNECTING DATA



Validating Carrier of the EMD (CC) sends a System Update message to the Validating Carrier of the ET (BB) and to any flight coupon operating carriers to which the service will be associated.

The above process is illustrated in the diagram: This process mapped above is a very likely scenario for initial rollout, as the operating carriers of the services have indicated that they will need to be the validating carrier of the EMD in order to avoid an interline transaction (which currently has no billing standard).

Travel Agency Issues ET

VALIDATED BBET Validating Carrier BB

Same Travel Agency Issues EMD

VALIDATED CC

Operating Carrier CC

EMD Validating Carrier CC

(1) IssuanceRequest

(3) IssuanceRequest

(4)DisplayRequest

(7)SystemUpdate

(7)SystemUpdate

(5)Display

Response

(6)IssuanceResponse

(8)AirportControlRequest

(2)IssuanceResponse

(9)AirportControl

Response

(8)Airport Control Request

(9)Airport Control Response

Ticket Validated by BB

IADJFK BB 20JUN06JFKLHR CC 21JUN06

EMD Validated by CC

Prepaid BaggageJFKLHR CC OC456



The following scenarios are possible using the above combinations:

(1) Travel agency sells ET, Airline sells EMD-A associated to the ticket/ flight coupons (2) Travel agency sells ET and EMD on the same Validating Carrier and all travel is online (3) Travel agency sells ET on one Validating Carrier and the EMD on another Validating Carrier and EMD is online (4) Travel agency sells ET and EMD on the same Validating Carrier and travel is interline (5) Travel agency sells ET on one Validating Carrier and the EMD on another Validating Carrier and EMD is interline

The marketing carrier is used as a conduit for messaging between the Validating Carrier of the EMD and the carrier delivering the service (Operating Carrier). In an interline billing situation, the marketing carrier does not become involved, as the funds are collected by the Validating Carrier, and billed by the Operating Carrier to the Validating Carrier. Note that in the above context; An online transaction is one in which the EMD coupons are wholly operated (delivered) by the Validating Carrier. An interline transaction is one in which at least one EMD coupon is operated (delivered) by a carrier other than the Validating Carrier. There are very few restrictions documented on what a Travel Agency can do with regards to the sale of an EMD within Resolution 725g (neutral), notwithstanding existing Resolutions which by nature make these sales more restrictive than airline direct reservations (for example point of sale limitation on refunds and reissues, value limits on issuing and honoring these documents). A Recommended Practice (1790) is currently being drafted which will cover the Validating Carrier rules for Electronic Miscellaneous Documents. Validating Carrier rules for Passenger Tickets are covered by Passenger Agency Conference (PACONF) Resolution 852. At time of writing, there is no specific Resolution covering the selection of Validating Carrier for an EMD, although it is expected that some reference to selection from “any operating or any marketing carrier” will be agreed at some later date.



2.1.4 Consumption of the Service Consumption of the service relates to “usage” of the EMD coupon – effectively when the coupon has been logged in the Validating Carrier system as one of a number of Final statuses. These statuses are listed in Resolution 725f (airline) as: Exchanged/Reissued - the EMD coupon has been exchanged or reissued for another ticket or another EMD Closed – the EMD coupon has been closed for a reason deemed necessary by the validating carrier Flown/Used – the service has been consumed as intended Refund – the EMD coupon has been refunded Void – the EMD has been cancelled

All of these status codes ensure that the service represented by the EMD coupon cannot be used more than once (duplicate usage). Typically final status coupons are reported to revenue accounting systems in order to ‘close off’ the coupons as they were reported when the EMD was issued (sold). The setting of final status by the carrier operating the flight and the EMD-S coupon (note because EMD-A are always set with the usage of the associated flight coupon) can be determined by that carrier. Some flexibility is required because different carriers may require different time lapses for setting and reporting final status of the service. For example, in the case of a meal, some carriers may consider the service ‘consumed’ at the time the flight coupon is set to ‘flown’; other carriers may require a timed delay to expire before final status is set. For this reason, the following guidelines are given on how final status of the EMD may be set (bearing in mind that these are internal system settings and so are to be programmed at the discretion of the carrier). EMD Standalone final status may be set:

1. At time of EMD-S issuance 2. Check-in for EMD-S issued in connection with a ticket 3. Departure of the first flight of the ticket to which the EMD-S is connected 4. Departure of the last flight of the ticket to which the EMD-S is connected 5. Arrival of the last flight of the ticket to which the EMD-S is connected 6. Manually set 7. Set when the service has been delivered



In the case of an interline EMD, there must be some bilateral agreement between the Validating Carrier and the Operating Carrier of the service to ensure that the two systems are not in conflict. The Marketing Carrier is also involved in the transaction as the conduit for messaging between the Operating Carrier and the Validating Carrier, but otherwise is not concerned with the point at which usage of the service is to be set to final.

2.1.5 Taxation It should be noted that tax may be applicable to services, and indeed may not have an IATA-assigned 2-alpha code to support it (for example Value Added Tax on services). Typically IATA-assigned ticket tax codes apply to transportation, with very few exceptions which tend to be included because they apply to transportation and services. IATA has agreed that they will not manage and maintain the collection and distribution of taxes on Services. These taxes will need to be reported on the EMD and correctly accounted for and remitted to the taxing authority. The assumption is also that each service on the EMD may be taxed at different rates as the delivery of the service may be in different countries. Further information can be found in the ATPCO Record X1 (Tax Rules) which is currently in design. The Itinerary Receipt should serve as a valid VAT Invoice when printed, and as such must display clearly that such VAT has been charged, at which rate, and on what base amount it has been charged. Local legislation related to wording requirements for the correct display of Value Added Tax amounts or related charges should be factored into the display and print routine of the ticketing system, and is expected to vary by country. As of August 2008, taxation levied on services is an unresolved issue and will be further documented when requirements have been fully specified. This is being actively discussed between ATPCO, IATA, and experts from several airlines and pricing systems as the ATPCO Tax Rules Record X1 is designed throughout 2008. The current assumption is that only transportation tax (i.e. a tax which has an assigned IATA 2-alpha code) can apply to the EMD value.



2.1.6 Fare Calculation Area The fare calculation area for the EMD is only required in the case that the service has been priced over a portion of travel which is greater than one coupon. In the case of a single segment, the EMD holds the origin and destination, as well as a specific coupon value assigned to that service. For portion of travel, there will be no coupon value (because the fee has been assessed over multiple segments). Consider the following example: Ticket issued by carrier BB for itinerary: IAD (BB) CDG (XX) NCE (no codeshare, marketing carrier = operating carrier) The passenger requests a meal service, and the S7 pricing record for carrier BB matches to a portion of travel (concurrence is also confirmed with carrier code XX within the S6 pricing record), and the passenger purchases the meal on an EMD-Associated for IAD-NCE for USD100.00. The fare calculation area would show the following: IAD BB CDG XX NCE100.00NUC100.00END However in the case that services are issued on the same EMD, involve a portion of travel, but are not contiguous, a void segment will need to be placed in the fare calculation area to denote that there are no chargeable services between the two indicated points. Consider the following more complex scenario: Ticket issued by carrier BB for itinerary: IAD (BB) CDG (XX) NCE (XX) ROM (ZZ) SIN (ZZ) SYD (VV) AKL The passenger requests a meal service, and selects meals for:

(1) portion of travel IAD-NCE (USD50.00) (2) segment SYD-AKL (USD25.00)

The fare calculation area would show the following: IAD BB CDG XX NCE50.00 /- SYD VV AKL25.00NUC75.00 END



2.1.7 Credit Card Form of Payment At the time of purchase of the EMD, there should also be consideration of the credit card swipe. For example, if the passenger is purchasing one ticket with three associated EMDs, a carrier needs to ensure that requirements for the passenger transaction are met. In this case, the passenger may swipe the card four times (four separate accountable documents), or once (aggregated authorization check and payment for the four documents, which will then be reported separately). At the current time, these will be charged to the Credit Card as four separate items, and therefore will appear on the statement separately. This is because the EMD is considered to be one accountable document (with a commensurate accountable stock number for each document issued). Some airlines have indicated that separate charges would be preferable, due to the possibility of Credit Card Chargebacks. If the ticket and the services are included in one charge, then the entire amount could be set as a Chargeback by the customer even if only one service was being disputed. Indications to date from airlines are that this is a carrier decision and will be dealt with upon implementation by each carrier depending upon business needs.



2.1.8 Reconciliation of the Ticket to the Delivery of the Service Once the EMD has been issued for the service, it provides proof positive that the service has been paid for. The data is then ready to be finally recorded within Revenue Accounting as a service sale. As long as the EMD has been issued prior to delivery of the service, then the liability is with the operating carrier of the EMD to provide the service as sold. Booking details of the service will be added to the PNR using an SSR message format (which in the case of EMD-A and EMD-S with connection to a flight itinerary) will also be sent to Departure Control Systems to ensure that the service provision is correctly handled), to ensure that the service is recorded for the passenger. The data can be reconciled in the following ways:

(1) Service Fee Sub Code (and provisionally, the Fee Owner) in the SSR message will match to the Reason for Issuance Sub Code at coupon level on the EMD

(2) As of July 2007, it is expected that the industry will develop a new standard for Reason For Issuance Codes, and the expectation is that ATPCO priced optional services will have one dedicated letter. The service to be provided will be determined by decoding the fee owning carrier and the 3 alphanumeric Reason for Issuance Sub Code.

When an EMD-S is issued with no connection at all to an itinerary e.g. prepaid Excess Baggage, the booking may be created using a PNR, but no linkage to DCS is expected as there will be no known flights at that point. DCS systems will be updated at a later time when the Excess Baggage is associated to a flight, normally via the issuance of an EMD-A or by the association of the existing EMD to the flight coupons on the Passenger Ticket.



2.1.9 EMD Exchange/ Reissue and Refunds EMD exchanges and reissues are subject to the same governing resolutions as MCOs and MPDs today. There are three likely scenarios which will cause an exchange of an EMD:

(1) The associated ticket is reissued, forcing the EMD coupons to also be reissued (or alternatively disassociated) (2) A change occurs to the service prompted by the carrier or by the passenger which causes a reissue to an alternate service (3) The EMD is issued for a miscellaneous charge (standalone) which cannot be used for the actual service, and must be

exchanged in order to be used (for example prepayment for unspecified excess baggage would be exchanged for an associated EMD detailing the excess baggage service).

The need to reissue an associated EMD is minimized, because the coupon on the EMD only includes the marketing carrier code, the board point, and the off point of the service. This means that in the case of, for example, a flight number change, a reissue is not necessary. If there are any changes to the marketing carrier, the board point, or the off point of the coupon, then the EMD coupon must be reissued (or disassociated). The occurrence of a reissue or an exchange to an EMD does not cause any complication in sales reporting, other than the reporting of an EX Exchange form of payment on the reissued document, and details being presented in the Original Issue Information on the reissued EMD. The pitfall is that there is no automated reissue procedure for the EMD developed at the current time and so this must be performed manually. The EMD can also be refunded with the same ease of process, with the refunded amount being reported through the various sales data sources so that the accounting reversal can be recorded. As at August 2008, the application of Category 31 rules for automated reissue of Optional Services is in discussion, and will be documented as these rules are developed in the pricing application.



2.1.10 EMD Data Element Matrix The data element matrix for EMD reporting can be found in the IATA Passenger Services Conference Manual Resolutions 725f, 725g, and 725h, and also in ATA Resolutions 20.63, 20.64, and 20.65.



2.2 Carrier Fee Ticketing Method There is an option within the pricing record to use an alternative ticketing method to the more conventional EMD (described in Section 2.1). The one other method allowed for within the ticketing resolution is to charge the Optional Service to a non-interlineable validating carrier fee (as for the ticketing data application of Ticketing Fees). The type of fee that this is currently targeted for is the Fare Related Optional Service. The Fare Related Optional Service (also known as the Rule Buster) will be sold to the passenger as an entitlement to reference a different rule set when, for example, making a change to the itinerary which breaks the fare rules of the fare purchased. In business terms, the passenger will be buying in advance an insurance against changes and/or refunds to a restrictive fare which has been purchased. The implementation of Ticketing Fees has taken the form of a number of elements adopted in Resolution under the title of CARRIER FEE DATA. This allows for a fee to be collected and retained by the validating carrier – for example, the collection of a fee from the passenger to cover credit card processing. This methodology is an ideal business fit for the Fare Related Optional Service Fee. The relevant data elements for messaging with the Electronic Ticket can be found in IATA PSC Resolution 722f Glossary and ATA Resolution 20.60 Glossary. The Fare Related Optional Service will be priced in the Carrier Fees section of the Electronic Ticket as an ‘OC’, which is listed in the IATA Coding Directory as a Validating Carrier Fee. In other words, the value cannot be shared with marketing and/or operating carriers in the itinerary in a multilateral environment. Any arrangements involving disbursement of funds to interline partners will be on a strictly bilateral basis.



An example of a Fare Related Optional Service would be as follows: Passenger purchases itinerary FRA AF LON AF PAR validated by carrier 057 (AF). The fare allows no changes and no refunds, for EUR100.00. UB tax of EUR15.00 applies. Passenger purchases at the same time as ticketing a Fare Related Optional Service for a flat fee of EUR25.00 (OC AF 0CF) which allows one change to the itinerary. The Fare Related Optional Service is shown as CARRIER FEE DATA – OC – Fee Related to Service Fare EUR 100.00 Tax EUR15.00UB Total EUR 115.00 OC Carrier Fee EUR 25.00 OC0CF Passenger Pays EUR 140.00 Carrier AF would retain the EUR25.00 regardless of where in the itinerary the change or refund occurs. By selling this Optional Service up-front with the ticket, automated reissues and refunds through Categories 31 and 33 are facilitated. It is much easier for system processing to account for the Fare Related Optional Service when it is reported with the ticket (i.e. one transaction) rather than on a Miscellaneous Document, which would necessitate the processing and linking of multiple documents into the pricing of one output reissue transaction.



2.3 ‘Other’ Ticketing Method The current pricing instructions allow for the selection of an alternative ticketing method (other). This is expected to be applied as an exception process, and will be defined by each carrier as an individual implementation issue. There are no multilateral industry standards to support this method at the current time.



3.0 SALES DATA REPORTING Once the Optional Service has been ticketed, the document must be reported to the airline in order to revenue account for the amount sold. At this point, the accountable document – the EMD or the Electronic Ticket (the method henceforward referred to as ‘Carrier Fee’) – provides proof that the service has been paid for. The various sources which need to be considered are as follows:

(1) All US Travel Agency sales will be reported through Airlines Reporting Corporation (ARC) (2) All non-US Travel Agency sales will be reported through IATA Billing Settlement Plan (BSP) (3) All direct reservations will be reported in the airline’s own (or host system) proprietary format (4) Online and interline sales from airlines and from travel agencies are sent to over 110 customers through ATPCO Industry Sales

Record (ISR/TCN) output (5) ARC and BSP outputs are sourced from Reporting Tape Files (RET) and System Provider Reporting Files (SPRF) supplied by

Ticketing Systems The fundamental requirements of reporting this document through to revenue accounting systems is that:

(1) there is enough information to accurately account for the service fee from the sales record (2) there is enough information about the specific service to accurately partition the coupon or Carrier Fee values from the sales

record (3) there is enough information to support any billing requirements when the Optional Service is interlineable (4) the ‘in connection with’ ticket and coupon number are sent to be able to attribute the service to a route and a fare sold where

the Optional Service is sold on an EMD-Associated



3.1 IATA BSP Sales Reporting Reporting of Optional Services as a Carrier Fee was incorporated into DISH20.1 which is will be fully implemented by December 2007 (and is also required to support agency sales of OB Ticketing Fees). The value of the Optional Service is simply reported as a tax value subject to the following rules:

(1) The value is reported in the TMFT (Tax Miscellaneous Fee Type) and related TMFA (Tax Miscellaneous Fee Amount) fields. (2) The TMFT field is structured as follows:

a. Bytes 1&2 = OC b. Bytes 3-5 = Reason for Issuance Sub Code/ Service Fee Sub Code c. Bytes 6-8 = Reserved for future use

(3) The OC Service Fee will be reported in order after all ticket taxes have been reported. (4) Any tax applicable to the OC will be reported in the subsequent TMFT/TMFA set. (5) The OC Service Fee value is included in the Form of Payment Amount (FPAM) and Ticket Document Amount (TDAM), but

not in the facsimile element of the ticket total (TOTL). This is because Carrier Fees are considered to be ‘off ticket’ (see example in Section 2.2).

The Electronic Miscellaneous Document will be introduced into the existing Data Interchange Standards Handbook (DISH), probably as release 20.2. Similarly to the release of the MD50 (automated Miscellaneous Document), once the standard is in place, Ticketing Systems can opt to issue the EMD when they and the Validating Carrier are ready to do so.



3.1.1 DISH Reporting Standards The final specification for non-US travel agency reporting of EMDs can be found in the IATA BSP Data Interchange Specifications Handbook Version 20.2. This has been agreed and was published in January 2008, which serves as the earliest implementation date. A latest implementation date has not yet been agreed, pending the development by one carrier and one GDS of an agency EMD solution. The current standard (which already includes the reporting standard for Carrier Fees) is Revision 20.1.

3.1.2 Other Considerations for DISH Reporting

There are other considerations related to reporting, but these are to be considered from a business rather than from a technical perspective. Items to consider may be:

(1) Whether these items will be commissionable, and whether the BSP should perform any validation on this basis. (2) Filing of commission rates with the BSP (3) Reporting of VAT and other taxes on Optional Services (4) Reporting of commission and tax on commission on the Optional Service (5) Timing of the release by country will determine the first issuance dates for services for each country. These are liable to be by

Data Processing Center (8 implementations) rather than at the individual country level (70+ implementations).



3.2 ARC CAT Reporting Work has not yet begun for specifying either Carrier Fee or EMD for the ARC CAT US Agency Reporting format. This is expected to mirror the work completed by the BSP Data Interchange Standards Group (BDISG1, 2 and 3) in reviewing the relevant data elements for reporting, and in ensuring that data standards correctly meet the business requirements for revenue accounting. ARC participates in this group and so information will be shared in design to ensure that the two standards are consistent.



3.3 Direct Reservations Reporting Direct reservations are governed by proprietary airline owned or System Provider hosting systems. Reporting will be defined and developed by each customer carrier to fit the business need for reporting EMDs and Carrier Fees sold through direct reservations channels.



3.4 Industry Sales Record The ISR/TCN format is already equipped to handle Carrier Fee reporting in the existing Tax Miscellaneous Fee Type and Amount fields (TMFT/TMFA). The Industry Sales Record for the EMD will be developed in accordance with the standards specified above for BSP/ARC reporting. A separate meeting will be held with System Providers when the EMD reporting standard has been finalized in a mail vote of the Joint Passenger Services Conference (JPSC) in December 2007. Records specific to the EMD will be designed as prioritized by data recipient customers to enable consistent provision of the data through ISR/TCN channels. Provision of BSP-sourced EMDs on the ISR will require an ATPCO development and the need for this will be monitored at the Sales Data Exchange General Meeting which is held annually in the 4th Quarter of each year.



4.0 REVENUE ACCOUNTING

4.1 Revenue Accounting for EMDs The EMD allows revenue accounting systems to set up the forward sale liability for the transaction at the route and point of sale level, which for the first time allows for optional services to go through a comprehensive and automated revenue management process in terms of filing the ‘correct’ fee levels for the marketplace. The data also allows for a link to the original ticket, which in turn at the coupon level can show the airline on which fare basis ticket designator codes over which geographies these Optional Services are being associated. In exactly the same way as the ticket is accounted for, the forward sale liability is set at coupon level for the EMD, awaiting final status to be reported to revenue accounting systems in order to close out the liability and bring the revenue forward into Profit and Loss. As described above, when final status is set within the Electronic Ticketing system, the carrier will receive a file (internally developed) of used coupons, which in this case can be: Exchanged/Reissued - the EMD coupon has been exchanged or reissued for another ticket or another EMD Closed – the EMD coupon has been closed for a reason deemed necessary by the validating carrier Flown/Used – the service has been consumed as sold Refund – the EMD coupon has been refunded Void – the EMD has been cancelled

These can be matched at the coupon level to previously reported sales information, and revenue information can be fed back into the Optional Service filing process to ensure that appropriate fee distribution action is taken at the market and point of sale level.



4.2 Revenue Accounting for Carrier Fees Carrier fees are reported at ticket level, and so the fee will be setup using:

(1) Optional Service Fee code ‘OC’ (2) Reason for Issuance Sub Code/ Service Fee Sub Code (3 A/N) (3) Value and currency (4) Other ticket details depending upon granularity required

Closure of usage cannot be performed by the usual coupon match process (as the Carrier Fee is not attributed to a coupon), and so will need to be automatically closed down either when the ticket is originally sold, exchanged/ reissued, or refunded (by definition using the Optional Service), or alternatively by a process of outdating after a certain period to be defined by the carrier has passed (e.g. after last flight in the itinerary, after 3 months, after 1 year). Carrier Fees are also known as Optional Services - Fare Rule Override.



5.0 INTERLINE BILLING AND SETTLEMENT

5.1 Interlining EMDs At time of writing, the most likely scenario for day 1 sale of Optional Services is to treat EMDs as non-interlineable, or to treat interline settlement as a bilaterally agreed concept. The following two scenarios depict how a service would be sold online, and how a service would be sold interline: Scenario 1: Online Sale of Optional Services Agency issues a ticket validated on carrier BB for itinerary AKL (BB) LAX (ZZ) NYC (ZZ) FRA (XX) SIN (XX) AKL Passenger requests one drink service on each flight. Agency issues an associated EMD validated on carrier BB for service BB130 (AKL-LAX) Passenger purchases an associated EMD from Validating Carrier ZZ website for services ZZ524 (LAX-NYC) and ZZ829 (NYC-FRA) Passenger purchases an associated EMD from Validating Carrier XX website for services XX624 (FRA-SIN) and XX929 (SIN-AKL) Thus one ticket is issued with three associated EMDs. All of the EMDs are issued respectively by the operator of the service on that EMD and service. Therefore there are no interline scenarios encountered.



Scenario 2: Interline Sale of Services Agency issues a ticket validated on carrier BB for itinerary AKL (BB) LAX (ZZ) NYC (ZZ) FRA (XX) SIN (XX) AKL Passenger requests one drink service on each flight. Agency issues an associated EMD for the complete through itinerary (5 coupons = 2 conjunctive EMDs) Validated on carrier BB. In this case service providers ZZ and XX must bill carrier BB for the service coupon values sold. At the current time, there is no industry standard for interline billing of EMDs, but the following guiding principles should be considered when a standard is being formulated: (1) Resolution 727a (Sundry Charges), which states that “Sundry Charges shall not be prorated and shall accrue to the Member issuing

the MCO”. The question is whether the EMD represents a Sundry Charge, or in fact whether it is covered at all under the blanket provisions for an MCO.

(2) First and final settlement of Optional Services should also be considered, which will require a standard automated process for proration and assessment of value of Electronic Miscellaneous Documents.

(3) A defined method for reporting these items through the IDEC file should also be considered. (4) IATA RAM Chapter 2 Section 1.5 states:

i. Unspecified MCOs will be billed based on the ‘Coupon Value’ field on the MCO ii. Specified MCOs will be billed for the “amount in the currency of the country of payment”

(5) ACH Manual Section K Rule 29 states: i. PRORATION OF SPECIAL SERVICE COUPONS

1. One Coupon Tickets – Bill amount collected (excluding tax) 2. Multiple Coupon Tickets – Straight Rate Prorate



5.2 Coupon Prorate Calculation The pricing functionality for Optional Services allows for two distinct ways to sell a fee:

(1) at a coupon level i.e. one point-to-point value (2) over multiple coupons i.e. portion of travel, itinerary

EMD reporting also allows for this, containing an element called “coupon value” for point to point services, and containing a fare calculation area for multi-coupon services. An example of a point to point sold service is as follows: Passenger purchases two meals on itinerary IAD-LHR-NCE. EMD is issued with two coupons: 1 IAD LHR 2CF 10.00 USD 2 LHR NCE 2FE 15.00 USD There would be no fare calculation area in this case, and the prorated values for revenue accounting and interlining (if the Validating and Operating Carriers are not the same) is simply based on the coupon value.



An example of a portion of travel sold service is as follows: Passenger purchases a meal package on itinerary IAD-LHR-NCE. EMD is again issued with two coupons: 1 IAD LHR 3DC 2 LHR NCE 3DC IAD BB LHR CC NCE 20.00NUC20.00END In this case, the itinerary must be prorated IAD-LHR-NCE to establish the relative values of the IAD-LHR and the LHR-NCE sectors respectively. IAD – LHR Prorate Factor = 4,507 Prorated Coupon Value = USD 15.35 LHR – NCE Prorate Factor = 1,366 Prorated Coupon Value = USD 4.65



5.3 Interlining Carrier Fees If the fee has been ticketed using the Carrier Fee method, then the fee is retained by the Validating Carrier and is not interlineable through multilateral agreements. Any such sharing of funds would need to be agreed bilaterally as required by interline partners.