Exchange/Reissue and Taxes in Galileo

In IATA markets serviced by the Galileo system the procedures which agents must follow when reissuing or exchange a ticket are laid down in Resolution 720a Attachment ‘B’ with further examples and explanation in the Ticketing Handbook.

It is important to remember that while most tickets issued by agents are in their own currency, there are circumstances where an agent may issue a ticket starting in a city that is not in their own country (e.g., a UK-based agency may issue a ticket between New York and Los Angeles). In such circumstances, the “Fare” on the ticket issued will be expressed in a “foreign” currency (USD) with the “Equivalent Fare Paid” in the currency of the agency (GBP). Should it become necessary to reissue such a ticket, the fare will continue to be expressed in the foreign currency.  

In the environment it is also possible for an agency to exchange/reissue a ticket issued by a different agency in a different currency.   Once again, the new fare will be expressed in the currency of the original issuing agency with any additional collection expressed initially in the original currency with an additional fare paid in the agency currency as well.

If the difference in fares results in a refund being due to the passenger, the agent must issue an EMD to carry the refund value. This often causes confusion but it is important to remember that the EMD has been issued. To refund the value carried on the EMD, it is then necessary to refund the EMD. You may ask why a two-stage process? Some countries restrict the export of their currencies. If it was possible to purchase an air ticket, take it out of such a country, and then obtain a refund on the unused parts of the ticket, this would contravene those exchange regulations.  Furthermore, only the original issuing agency actually holds the money from the original ticket. Therefore, the EMD for refund value must be returned to the agency that issued the original ticket who will then action that refund.  Of course, in many cases, the original issuing agent and the one undertaking the exchange reissue are the same, and, therefore, the EMD, having been issued, is immediately refunded by the same user.

A further area of confusion is often taxes.   When a ticket is reissued/exchanged the taxes shown on the original ticket are carried forward to the new one.

This MIR may help to explain.

 

T51G773392010530023316OCT061354 AF057AIR FRANCE              22JUN07CCCE40C79F3A UD4 UD499999992 ZZR1JO          C50GHNGHAG16OCT0600016OCT06012HRK0000004853002HRK00000000  00000000  00000000  00000000  00000000  000000000000               NYNYN7YNYAYA NNNX   HR                             000000001000001000000001001001001000000000000000

 

A02HARRISON/EMR                                6          00         AD    0101N

 

A0401AF057AIR FRANCE  2755Y AK22JUN0655 0900 2ZAGZAGREB       CDGPARIS/CHARLESINS   O030KER4         F TK:NJT:02.05

 

A0701EUR      654.00HRK     5083.10HRK     4853.00HRKT1:  111.30HRT2:  118.80YQ

 

A080101Y       00000000                    F:YA09010ZAG AF PAR M835.71Y NUC835.71END ROE0.782562 XT PD10.00GB PD6.80YR

 

A100101SEP069999942 ZAG                   CK                                   ATI:1253640100100P4   TI:1253640100101 1   HRK000000510.00   T1:   10.00GBT2:    6.80YRT3:          T4:          T5:          000000526.80000000000000

 

A11S      4573.10N                                     P:01

 

A12LONB /

 

The A07 line shows that the new fare for the ticket is EUR654.00 and that the equivalent of that is HRK4853.00.   There are 2 new taxes to be collected HRK111.30HR and HRK118.80YQ making the new total HRK5083.10.

Looking at the A11 section we find that the amount collected is only HRK4573.10.   This is the total amount less the value of the original ticket, in this case HRK510.00 found in the A10 section.   (HRK510.00+HRK4573.10 = HRK5083.10).   But, remember the HRK5083.10 includes the taxes.   Therefore the fare amount which has actually been collected is HRK4573.10 less HRK111.30 less HRK118.80 giving a result of HRK4343.00 (the commissionable fare collected).

You may also be wondering what the T1:   10.00GB item is in the A10 section.   Doesn’t that also need to be accounted for?   The answer is “no”.   This item has no accounting value.   It is a leftover from the time when some back office systems used the MIR to actually write airline tickets.   Where a tax is shown on the original ticket it must be carried forward to (and printed on) the new ticket but because it was paid for on the original ticket it doesn’t need to be paid for again so it can be safely ignored for accounting purposes.