Following the cancellation of thousands of flights this summer, the
German state of Lower Saxony, in the country’s north west, has called to
abolish advance payment for flight bookings.
Instead the state’s transport minister Bernd Althusmann, earlier this
month, renewed calls to introduce a ‘pay as you fly’ (PAYF) model,
where payment for plane tickets is processed upon check-in.
The Federal Ministry for the Environment and Consumer Protection
welcomed the initiative, which could be on the agenda at the next
Federal Council meeting set for 16 September, according to a report by
German business newspaper Handelblatt.
"The implementation of our initiative would only result in minor
additional costs for the airlines. On the other hand, travellers would
be spared a lot of hassle,” Althusmann told Handelblatt, referring to
lengthy delays experienced by travellers when seeking refunds.
The German Business Travel Association (VDR), which has been advocating for a PAYF model since 2021, also praised the move.
VDR President Christoph Carnier said, "Advance payment for air travel
is an outdated standard that should be replaced by timely electronic
"This would not only correspond to legitimate consumer interests, but
the airlines could also make current processes more efficient or even
eliminate them,” he added. “The subsequent bureaucracy of cancelling
ticket bookings and transferring the money back would be over with.”
The advantages of a PAYF model for corporate travel managers, as BTN
Europe previously reported, include not having to chase refunds or pay a
TMC to manage this process. There’s also a reduced risk of losing money
to airline bankruptcies.
Lufthansa launched a ‘Pay as you fly’ programme for corporate
customers in Europe in March 2021, where fares are typically more
expensive and the booking process slightly different, according to a TMC
BTN Europe spoke to previously.
Nevertheless, VDR recommends other airlines follow Lufthansa’s
example by offering travellers an additional PAYF option first, allowing
providers to gain experience, before a wider roll-out.
“The booking systems would have to be programmed and supplemented
accordingly in order to enable the ‘pay as you check-in’ solution and
make it the standard,” Carnier said.
He also warned that “care must be taken” to ensure a PAYF model can be implemented on a global scale.
"Going it alone in Germany could be an important step, but it should
be carefully worked out, taking into account all the consequences, in
order to rule out possible negative consequences," he said.
“Everyone must be aware that at the time of booking you are entering
into a contract of carriage that is subject to certain conditions, such
as no-show and/or rebooking fees.”