WASHINGTON -- The Transportation Department reminded IATA that its
fare construction rules for airlines, CRSs and agents are sometimes
meant to be broken -- especially if it means getting a lower fare
for the client.
Ruling on some technical changes in IATA's Pricing Unit Concept,
a fare construction scheme adopted in 1996, the DOT reiterated a
longstanding goal to "preserve agent and carrier flexibility in
constructing fares" for complex international itineraries, to
ensure the customer gets the best deal.
Under IATA's Pricing Unit Concept, airlines, agents and CRSs
have two basic choices when pricing a multisegment international
itinerary for normal fares. One method is to treat the entire
itinerary as a single pricing unit from origin to destination. The
second option is to construct a fare using a combination of the
local fares for the various segments. The passenger is entitled to
the lower of the two.
In response to concerns raised by the U.S. Travel Agent Registry
(Ustar), the DOT reminded IATA that airlines, CRSs and agents are
not locked into either of the two approaches.
IATA agreed and has said that its airline members are free to
deviate from its fare construction rules when necessary and to
issue different fare construction rules to agents and CRSs.
To underscore the point and "to make this understanding
absolutely clear," the DOT added a condition to IATA's underlying
agreement stating that "agents and carriers will retain the ability
to exercise maximum flexibility in constructing fares so that they
may continue to respond to competitive forces and seek the best
deal for their customers."