1. Why fare construction still matters
Automated pricing returns a number in a second. Your value as an agent is knowing whether that number is correct, why it changed after a reroute, and what the passenger is actually paying for. Every rule below is published in the IATA fare construction framework and in each airline's filed tariff.
2. The building blocks
• Published fare: a fare filed by the airline between two points, with a fare basis code.
• Fare basis: the code that carries the conditions — cabin, season, advance purchase, minimum stay, penalties.
• RBD: the booking class actually inventoried on the flight. A fare is only valid when it is sold in the booking class its rule requires.
• NUC (Neutral Unit of Construction): the neutral unit used to add fares of different currencies into one construction.
• ROE (IATA Rate of Exchange): the rate that converts local currency to NUC and back. It is published quarterly by IATA.
3. From local currency to NUC and back
1. Take the local currency fare of each pricing unit.
2. Convert to NUC using the ROE of the country of commencement.
3. Add the NUC amounts of the pricing units.
4. Convert the total back to the currency of the country of commencement.
5. Round according to the published rounding rule for that currency.
4. Mileage principles
• MPM (Maximum Permitted Mileage) is the maximum distance allowed between origin and destination for a given fare.
• TPM (Ticketed Point Mileage) is the actual distance flown through the ticketed points.
• If the sum of TPM exceeds the MPM, an excess mileage surcharge (5M, 10M, 15M, 20M, 25M) applies.
• Higher Intermediate Point (HIP) checks make sure no intermediate sector is priced below its own published fare.
5. Worked example (training data)
Journey: CAI–IST–BKK, one way, published economy fare.
• Fare CAI–BKK: NUC 480.00
• TPM total: 5,320 · MPM: 5,150 → excess 3.3 percent → 5M surcharge → NUC 504.00
• HIP check CAI–IST: no higher intermediate fare found → no adjustment
• Convert NUC 504.00 back at the ROE of the country of commencement, then add taxes, fees and carrier-imposed charges.
The numbers above are training values. Always price from the live filed fare.
6. Taxes, fees and charges
Taxes are collected on behalf of governments and airports; carrier-imposed surcharges are the airline's own. Both appear separately in the tax box of the ticket with their own codes. A refund calculation treats them differently: many government taxes are refundable even on a non-refundable fare, because they are only due when the passenger actually travels.
7. Pricing checklist before you quote
• Is the booking class the one the fare rule requires?
• Advance purchase and minimum or maximum stay respected?
• Is the journey within MPM, or is a surcharge correctly applied?
• Any HIP or backhaul condition triggered by the routing?
• Are change and refund penalties quoted from the rule, not from memory?
• Is the currency of payment and the rounding correct?
• Have you saved the pricing before end of transaction so the fare is protected?
8. Questions and answers
Q: The system priced the itinerary lower after I removed a stopover. Why?
A: Removing an intermediate point can cancel a HIP check or bring the journey inside MPM.
Q: The passenger cancelled a non-refundable ticket. Is everything lost?
A: Usually the fare is lost but unused government taxes remain refundable. Check the rule and the tax codes one by one.
Q: Why does the same route price differently on two days?
A: Seasonality in the fare basis, availability in the required booking class, and any change in the filed fare or the ROE.
9. How to study this
Reprice the same journey in the terminal three ways: direct, with a stopover, and after a reroute. Compare fare basis, surcharges and the tax box each time. That comparison teaches more than any table.