Germany pushes for ‘pay as you fly’ model

Germany pushes for ‘pay as you fly’ model

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 Handelsblatt.

“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 Handelsblatt, 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VDR President Christoph Carnier said, “Advance payment for air travel is an outdated standard that should be replaced by timely electronic payment.”

“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.”

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