thetravelguy

Svellman

Yes, I think you get my point. You start an LONE4 from London rather than the Euro zone as it is approx 20% less for economy. Currently, if you try to purchase this UK originated RTW in Germany, will you be charged the Euro fare or the Pound Sterling fare? I believe that if you purchase it in Germany, the Euro fare (which in this rare case a Euro fare is higher than a pound sterling fare) will be charged and converted to GBP.

Yes it is true it is difficult (but not impossible) to determine the location of an on-line booking. Most websites track the I.P. address which gives a good idea of where the user is at time of booking. In January 05, IATA passed a mandate which relaxed the sales indicator rule and that should have solved this issue so it should not have mattered where you were a the time of booking, and someone in the U.S. should have been able to purchase localized fares from any country in the world in any country, and fares were no longer to be raised if they were higher in the country of sale

The problem is the most of the big time international carriers realized that this could cost them millions in lost revenue, so they began to put up their own fences to guard against this. Take BA and Qantas for example. New Zealand is almost always a less expensive country to start a First or Biz class ticket from between the South Pacific and Europe. Both BA and QF have First Class fares of approx US$10,000 for Auckland Sydney London but to get these fares you have to be in New Zealand. They do not appear on the QF or BA website though they are published fares and any agent in NZ can sell them to you. The reason they don't appear on-line is that both carriers have added rules to the fare stating that they can only be sold in New Zealand....

Back to my original point, what I believe will happen with this new software is that when you start the booking process, you will likely be asked your country of residence (much like the current BA website), and then you will be charged the fare of that country. If you try and be cute and lie about your country of residence on-line, the booking will not work as the system will prompt you to enter a credit card that is billed in whatever country you reside. As is the case in my New Zealand example, if I am in New York and specify I live in New Zealand to get the lower fare, the system will show the price but unless I have an NZ based credit card the order will be rejected.....

Despite what anyone from OneWorld may say, based on the current condition of the airline industry I do not see any way they launch a booking tool which assists high yield passengers (biz/first RTW) in cicrumventing the fares of their home country. As was also posted in this thread, I believe FT'ers are the minority in their knowledge of jumping borders for lower fares. Again, there is no way that One World builds a system that would 'enlighten' the less savy but big spending customer and further distort their yields

christep

But if I understand a previous post correctly, Star Alliance has done exactly that. Why should OneWorld be any different?

svellmann

What do you think will haven to the RTW phone desks? Might they all (or most) be closed so that you can only book online and no longer by phone?

henkybaby

First of all: since when does the country of purchase have anything to do with where I live?? Two totally unrelated things. So in order for BA to make their pricing dependent on where I live (or where my credit card is registered) they would have to change the rules. Won't happen.

Second of all: when the ticket is bought 'online' the country of purchase would always be the country where the website is registered. In this case the UK for BA, Australia for Qantas etc. Not really expecting OW to make the tickets differ per airline now are we?

So my guess is they will drop the country of purchase rule all together and will go with the country where you start for online sales. Far, far easier to do it like that.

zoombee

It's certainly true that basing the price purely on the country of origin is easier than basing on that plus some other complicated attempt at whether or not you can/should pay more due to lack of affiliation with cheap origin countries.

But it's also true that it's easier still to have one price worldwide for the "same" product. How about oneworld just pick the lowest or average or median price and use that? Much easier to code and enforce.

In addition to ease of implementation and conception for customers, sales agents and airlines - there's also an implied fairness and/or sanity criteria hinting from behind some responses. A* do something, so surely... it only makes sense for X so surely...

All of that is somewhat irrelevant. Change in a large organisation is hard. Very hard. Businesses make changes to improve profits. If they aren't convinced a change has a good chance of avoiding significant pain or driving significant costs savings and/or additional revenues - they won't even consider how worthy the change is. However, Oneworld *have* indicated an upcoming change

The provision of an online tool for reserving and presumably then booking a valid xONEx itin is clearly beneficial to the airlines. It's a product both agents and the public struggle to get right and can be coded. It's clear there are benefits to having such a tool that should result in both savings in agent time, and in more sales.

Yet, Oneworld clearly don't seem to think that changing the way point of origin & method of payment pricing works is *in itself* a strong potential to drive additional profits. They've long since either kept the issue as is or buttressed the status quo. However, it is interesting that the status quo has, as many have indicated, new issues if you allow on-line payment. So there is hope.

To attempt to retain the price discrimination (*) that the current methods provide, may be more painful than before. But that in itself is at best half the equation. Fairness, ease of comprehension or ease of implementation only matter if the lead to concrete financial benefits. The existing pricing model makes it clear oneworld aren't convinced by that - but it's *possible* that the consider the introduction of an online booking tool to change the situation.

The key point is this: all that matters is an assessment of what the impact on profits will be, and that if in doubt - retain the status quo (approving, let alone making, change is hard). A lot of effort goes into the current price discrimination methods. This includes trying to ensure that it's *not* just about point of origin but also about more proof that you are affiliated with the point of origin. We can always hope, as the online tool does mix things up. But any argument not grounded in a sense of how it impacts profits is pretty much just noise.

Given the visible efforts oneworld undertake to defend this price discrimination, I for one am not confident. Try booking with the AA rtw helpdesk as the current closest exemplar to an online tool. It's a global service, supporting easy well informed itin reservation, pricing and booking starting from any location. You can pay from anywhere in the world using a credit card. But if you do so, they will try hard to base the price on where you are paying from - usually as defined by the stripe of your credit card.

Fortunately you can also use the AA RTW helpdesk to set up an itin that you can then get an agent on the ground (with point of origin pricing) to ticket. To have that in an online tool would be a boon, especially if the itin validation and pricing is speedy. I'd take that outcome in a heartbeat.

whmere

So, for example, if one of my sales guys (who lives in Scotland) wants to book online using his corporate Amex (address in Maryland, US) it will give him the ex-US price even if originating in Glasgow from a UK resident?

BA website used to have this problem when booking ex-Europe discounted tickets. It was always resolvable with a call to the relevant country reservations to sort out the credit card. In fact, as I recall that wasn't even necessary as the booking would set up but they would insist on a card swipe at checkin (ie whoever was paying had to be at the airport).

Also, at least in EU, practising discriminatory pricing based on the country of a person's intra-EU residence is illegal. You can charge different fares based on origination (after all, it is a different product), but you cannot charge different fares for the same origination based on the purchaser's residence. You'll probably find this also works bilaterally with many countries outside the EU.

christep

Eh? I have never heard of a single example where AA (or anyone else) tried to base the price of a ticket on the billing address of the credit card used to pay. You have to buy from a defined AA entity and you pay the higher of the price from the starting location and the price at the location of the AA entity you buy from. The price is currently NEVER dependant on the (billing address of the) credit card you use to pay.

thetravelguy

svellman-- Phone desk's will not disappear..There will be several manipulations that will still require the human touch (i.e. waitlists, open segments etc). Also, for a high yield product I would bet that the majority of RTW's will still be purchased by non tech savy travelers . For 1st time RTW travelers, there would be lots of issues regarding trip arrangement such as the order of the trip, back tracking understaning the Middle East is part of Europe in RTW terminology, etc that will still require the old fashioned phone service.

Henkybaby- If the fare for an Around the World ticket with One World is higher than from the country where you want to originate, it absolutely matters. This is not a new thing, and I am somewhat surprised at the reaction's I am getting for bringing the point up. If you don't believe me, I encourage you to call the AA RTW Desk in the U.S. at 1-800-247-3247,,,tell them you want start an RTW ticket in Bangkok or JBurg but buy it here...The price they give you will be the USA origination fare...The only way they can seel the Bangkok or JBurg fare is if the ticket is issued in that country. They may give you the contact for the GSA, but then you have to get in contact with the local office and they are not always friendly about taking high dollar credit card charges when the cardholder is not present...In short, it is not an easy process


whmere- Here are the different scenarios

A) If your corporate guy in Scotland is starting the trip in Scotland , he will be charged the Scotland fare regardless of the billing address of the card
B) If your corporate guy in Scotland is starting the trip in the U.S but purchasing from Scotland he will likely be charged the U.S. fare as long as he has a U.S/Canandian card to tie him to the U.S.
C) If your corporate guy in Scotland is starting the trip in the U.S but purchasing with a Scotland based card in Scotland then the U.S. fare is compared with the Scotland fare and the higher of the two are charged.

Christep-I think you have answered your own question and we are on the same page. Your state is correct that 'you pay the higher of the price from the starting location and the price at the location of the AA entity you buy from' But if you are cross border (say in Europe wanting to buy a U.S. originated RTW) the AA RTW desk will only accept a U.S/Canadian credit card via phone. Otherwise, you have to wait until you get to the U.S. to pay in person so they can do a swipe of the card. With the 7 day advance purchase, it could be problematic if you are flying in from Europe to start an RTW out of the U.S. and having to wait around a week, but for some there schedule may allow it.

Collection of funds for big ticket items will be a big concern, and payment for big ticket items to off shore billing addresses where the card is not present also poses some problems in terms of risk and risky transactions.

All things considered, this tool will be another option but just like current on-line booking it will have limitations. I could be wrong, but offshore pricing will be a limitation

serfty

Biggest issue for me is that one particular oneworld carrier will only charge Fuel Levies on their own flights, not on those of other carriers when you ticket through them. However there are other oneworld carriers that will charge Fuel Levies on ALL segments of an itinerary ticketed through them, whether on their flights or not.

Biggles68

This thread is a really fascinating read - cutting through much of the back and forth wrangles it looks as though defining what actually represents "point of sale" for a ticket issued over the internet may prove to be a central issue. I am sure some legal scholar must know what is the country of sale for a ticket currently issued online - is it simply defined by the issuing airline as a condition of sale?

I suppose it's also possible that the Oneworld airlines may hold (or be coming to) the view that pricing from the start point of a RTW ticket may not in practice cost them very much. As has been pointed out earlier in this thread, savvy travellers (who are probably very much in the minority) already do what is necessary to secure low priced RTW tickets. So an online booking engine may just make life a bit easier for them - and cost some business for TAs in cheap locations. The less savvy travellers are likely still to start their RTW itineraries from their home countries - as they probably do now, even if an online booking tool is available to them.

daniellam

Some things to keep in mind:

Point of Sale

When booking online, most airline websites (CX, BA, EK[even though it is not part of Oneworld] etc.) price tickets using the currency/fare rules for the country of origin no matter where you reside.

Take the BA website for example, I live in Canada and use the BA Canadian website. I search for a fare from ATH-JFK in Club World and get the following message:

However, on the website for AA, you either choose Canada, US, or UK as your country of residence and the fare (and fare rules that are applied) you would pay (and currency you get charged in) would be determined by your credit card billing details.

OT Note: It is common for expatriates to keep the credit cards of their home country (eg. U.S. employee of a multinational going on assignment in Europe) as it can be difficult for them to get one in their host country (due to factors such as lack of credit in their host country), or the credit card in their home country has a higher credit limit. Therefore, it is unfair to base residency . point of sale on credit card billing address.

Airline Computer Systems are "Dumb"

- Fares such as XONEX fares cannot be Auto-Priced by any of the GDSs or airline reservations systems due to the complexity of the fares. For simultaneous online booking and ticket issuance to occur, there must be capability for the fare being ticketed to be auto-priced.

- While it may be possible for an XONEX itinerary to be booked online, my guess is that the user would be asked to provide contact details so that someone from the ticketing airline can call them back with the fare. (As the fare rules will have to be interpreted by a human being and calculated manually.

- Online booking of an XONEX itinerary will not operatly smoothly unless all carriers participating in Oneworld migrate to a common GDS system (eg. All carriers use Amadeus as their in-house reservations system). This is because when multiple carriers are involved in an itinerary, they only see the segments of their operating flights (and INFO segments immediately before/after their operating flights) in the PNRs of their in-house systems (with the exception of BA, LA, QF, AY being able to see each other's live segments as they are all hosted by Amadeus).

- Given the previous point, carriers such as CX will have to create "passive segments" for flights on other carriers (besides KA) when issuing XONEX tickets created by the online booking site.

Kiwi Flyer

The *A RTW tool provides the standard fare for the origin, having already determined which mileage level applies and that the draft itinerary meets the rules.

You can send the draft itinerary to an airline for a booking to be made, or copy it to a TA.

zoombee

The price isn't. But you're ability to pay can be. I've not found it too hard to convince the RTW helpdesk to price it based on the point or origin, but it's always been based on committing to ticket it in a manner they are happy with for that point of origin. E.g. using a local agent, or using a UK credit card over the phone.

christep

Really? I've never had a credit card declined by an airline or TA for a OneWorld ticket on the basis of where the billing address is. Either they take credit cards remotely or they don't (and you need to be physically present to pay with one). The billing address of the card has never been a factor for me in whether they will take the payment remotely - do you have a specific example where it is?

(Yes, I know that some online booking engines such as AA online accept cards from a very small group of countries, but that's a rare exception, and frankly I doubt that it will ever be possible for OW to issue OWEs for all originations without some manual intervention.)

jerry a. laska

I've never had the AA rtw desk even question how I was going to pay for an xonex originating in another country let alone try to make me commit to purchasing it in a certain manner or with a certain credit card.