New Standard Clarifies Airline Ancillary Charges
by Michele McDonald /Back in 2010, Cyndi Hunter, United Airlines’ director of global accounts, predicted that it would take years to fully address the issue of identifying charges for airlines’ ancillary products on credit card statements.
She was right.
This week, Visa introduced a new set of global payment standards for ancillary transactions such as baggage fees, inflight meals and premium seats.
It took “a multi-year collaboration with the airline industry,” Ramon Martin, head of global merchant sales and solutions at Visa, said in his blog.
Cause for frustration
Since the airline industry adopted ancillary revenues as a pathway to profitability in 2008, ancillary purchases have increased by nearly 400%, said Martin. They now account for nearly half of all airline transactions.
But the way the charges appear on statements has frustrated travelers, travel managers and travel management companies for years.
A charge for Wi-Fi, for example, might appear as “AirlineName0014567891014.”
There were times when United passengers who had never flown JetBlue would see a JetBlue charge on their statements. That’s because until last year, JetBlue owned LiveTV, provider of satellite television on some United aircraft.
Making it clear
Visa said its new standard will allow airlines to process these transactions so that they are distinctly identified and categorized from ticket purchases. That charge for Wi-Fi will now appear as AirlineName Wi-Fi.
Developing a standard required airlines to align their descriptors and codes and populate the fields of a transaction correctly and uniformly.
Other entities that touch a transaction – the acquiring bank, for example – also have to be on board.
MasterCard is expected to adopt the new standard shortly. American Express has been identifying ancillary charges for two years.