Lufthansa has responded to a call from the German Business
Travel Association (VDR) to move away from the airline credit model by opening up its Pay As You Fly (PAF) scheme to more corporates and on more routes.
The airline is restructuring its PAF tariff for German, Austrian and Swiss points of sale so that payment for flights
will not be triggered until the time of departure. In addition, customers will
only be charged for flights actually used.
PAF was introduced in 1997 with Siemens as the
pilot customer and was only available to companies who exceeded a certain purchase volume. With the new PAF scheme, a minimum purchase
volume is no longer required.
PAF fares will now be available on domestic and EU-EU point-to-point and transfer flights of Austrian Airlines, Brussels Airlines, Lufthansa and Swiss.
The change means that companies will no longer have to
submit refund claims in the event of a flight cancellation, thus saving
administrative costs. There will also be no rebooking and cancellation fees.
“Lufthansa’s new additional fare option marks an important
step towards more flexibility and cost savings for companies and their business
travellers. We welcome the fact that Lufthansa was receptive to our proposals
in constructive talks and is now taking a pioneering position on this issue.
This marks a major achievement in our long-standing campaign for better
consumer protection. We expect more airlines will start rethinking their fare
structures now," said VDR president Christoph Carnier.
A Lufthansa spokesperson told
BTN Europe, “We have been offering Pay As You Fly to a limited group of our corporate customers for many years. Now, access to the product will
be easier and more convenient for additional companies.”
Responding to VDR's call to move away from airline credit, the spokesperson said, “In general, Lufthansa
continues to consider the current regulations on payment practice to be
sufficient and targeted when it comes to product differentiation and supply
management. A fundamental short-term payment practice would lead, among other
things, to a situation in which the utilisation of flights would be much less
“As a consequence, flying
with half-empty aircraft would not make sense ecologically or economically. It
should also be taken into account that advance payment is a global practice in
international air traffic. A national change would not only be associated with
competitive disadvantages for Lufthansa, but would also present the airline
with considerable booking and billing problems.”