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  • What's in a Fare?

    What's in a fare?
    Airlines publish a variety of fares between each city pair, and each fare has the following components:
      a) whether the fare is one-way or round trip
      b) the dollar amount
      c) the class of service required for booking
      d) the fare basis code
      e) a set of fare rules

    a) one-way or round trip
    Some fares are published as one-way fares, which you may use to travel in one direction.  If you prefer, you can pay twice the one-way fare and travel round trip.

    Many fares are published as round trip fares.  Often a round trip fare costs less than twice a one-way fare, and indeed, often less than a single one-way fare.  Round trip fares generally have more restricted fare rules.

    If you are traveling one-way only, it may be less expensive to buy a round trip fare.  Remember that you may not get a refund for the unused portion of your ticket.

    In the new model, used by airlines such as Southwest and Air Canada, most if not all fares are one way. In these cases therefore, a round trip really does cost double a one way trip, rather than the other way around!

    b) The dollar amount (plus tax)
    The dollar amount of a published fare is what is known as the base fare.  This amount goes to the airline.  On top of the base fare, you must pay a variety of taxes and surcharges.  Most online travel products quote the fares including all taxes.  The standard domestic federal US tax is 7.5%.  Some airports charge what are called passenger facility charges (PFC) for all passengers going through those airports.  These funds are directed to airport improvements.  A segment tax of $3 per segment is also applicable on most tickets.  International travel results in additional taxes from other countries.

    c) the class of service required for booking
    To understand this very important point we must introduce the concept of inventory control.  In order to be profitable, the airline is not likely to allow all seats on the aircraft to be available at special fare rates, even if every passenger could meet the necessary restrictions.  In other words, the airline allocates only a certain number of seats at each fare level for each flight.  The number of seats allocated at each fare level depends on many factors, such as the route involved, the time of year, the usual business/leisure passenger breakdown on that route, the time of day, etc.  Airlines have inventory control departments to determine how many seats are allocated at each fare on each flight.  For example, in the case of the college student, if his flight of choice was already heavily booked, all of the special fares may be sold out at the time he makes a reservation, although the flight itself may still have some seats available at the full coach fare.  The student would then have to choose a different flight or elect to pay the full fare (or some fare in between).

    Different classes...same economy seats!
    In airline reservation computer systems, the allocation of seats at different fare categories is accomplished through the use of "class of service" codes.  Do not confuse these codes with the actual class of service (e.g. First Class, Business Class, Coach).  While First Class and Business Class do have their own class of service codes, many different class of service codes are used for the Coach cabin, even though all of the passengers sit in the same place.  For example, the business traveler and the college student may sit next to each other in the Coach cabin, even though their reservations were made with different class of service codes.

    Class Examples
    Generally speaking First Class is coded as F or P, Business Class as C or J, and Full- Fare Coach as Y.  Most special fares (referred to as subclasses, since they are subclasses of the Coach class) are coded using other letters, such as M, B, H, K, Q, L, V, etc.  Each airline generally has a hierarchical structure for the subclass codes - e.g. on one airline the order is generally MBHVQL, where M is usually close to a full Y fare and L is usually a deeply discounted fare.  The hierarchical structure varies however from airline to airline (e.g. on another airline M may be heavily discounted).

    When checking whether a particular flight is available, what you really want to know is what classes are available?  If you are looking for a low fare requiring booking in Q class, then you must find a flight for which Q class is available.  If Q class is sold out on that flight, then you will have to pay a higher fare to take that flight, or choose another flight.

    d) the fare basis code
    The fare basis code provides information about the specific fare in addition to the class of service required for booking.  Every published fare has a fare basis code, and this code appears on the ticket in the fare basis box.  More than one fare, and thus more than one fare basis code, may exist for each class of service for booking.  For example, two fares for H class may exist - one for midweek travel and one for weekend travel.

    Consider a return fare across the country with fare basis code HL7LNR.  The first letter H refer to the class of service for booking (H class).  The L refers to low season, the 7refers to the requirement for 7-day advance booking, the next L refers to long-haul, and the NR means non-refundable.    The fare would presumably be different if it were 14- days in advance or if it were high season.  In that case both the fare and the fare basis code would be different.  Often you will see the letters X or W, referring to midweek or weekend travel respectively.  You will never be required to make inferences about fare rules based on fare basis codes. The fare rules are specifically spelled out, and a whole section is dedicated to fare rules.  What you should understand is that every fare has a unique fare basis code, and that one class of service booking class can have more than one fare associated with it.

    e) the fare rules
    An entire section is dedicated to fare rules. In simple terms, every published fare also has a published set of fare rules.  These rules govern the conditions that must be met for a passenger to qualify for this fare.  These conditions may include, for example, advance purchase requirements, minimum and/or maximum stay requirements, day of week restrictions, time of day restrictions, routing restrictions, season restrictions, change penalties, cancellation penalties, etc.

    Back to business, or pleasure?
    In the case of the business traveler going from New York to Los Angeles, she travels at the full coach fare in seat 18A. She booked her reservation in Y class, with a fare basis code of either Y or something like Y26 or YUA.  If the fare basis code is Y alone, the ticket is transferable between airlines without any hassles.  Other fare basis codes beginning in Y are usually airline-specific, but may cost less than the full Y coach fare.  Our college friend on the other hand travels with a fare code of ME721NR, with booking in M class 21 days in advance, and sits in seat 18B.