AIRLINES are introducing new
global date-change penalty
codes in line with industry
tax code definitions. Industry
leaders approve, saying
standardisation of penalty
codes will make the reissue
process easier for them.
Airlines that have
introduced this policy
including Emirates, BA
Comair, Kenya Airways and
Latam. For the airlines that
have adapted this policy,
date-change penalties will
now be collected under the
OD code.
Latam says the new
procedure comes in
response to the industry’s
need to comply with the new
format used to recognise
revenue at the time of flight,
as provided by accounting
standard IFRS-15. The
Emirates release explains
that the OB code, which the
airline had previously used,
generically refers to ticketing
fees including both credit
card and ticket fees, while
the OD code specifically
stands for penalty fee.
The OD form of collection
will be standardised in the
automatic reissue tools
in those GDSs where
they are still active, says
Latam. Otherwise, agents
must record the penalty
collection in the ticket tax
breakdown. In countries
where the penalty is taxable,
the amount of that tax must
be reflected separately in
the respective tax field. The
change in the reservation
and the ticket reissue must
be processed during the
same day and must be
associated with a single
ticket for each passenger.
An Iata spokesperson
told TNW that IFRS-15 is
the international accounting
standard with which South
Africa has decided to comply.
To enable compliance, Iata
is also making adjustments
to the billing and settlement
system.
David Pegg, md for Sure
Viva Travels said that he was
always for standardisation
in the industry as it made
things easier for everyone.
Sarah Mokua, air ops leader
for the Flight Centre Travel
group agreed saying that
one tax code for all airlines
would help to reduce the
number of incorrect tax code
reissue errors.
