Fare Construction Explained: How the Pieces Come Together

An airfare isn’t just a price. It’s a formula with rules, ingredients, and logic.

Introduction

When you see a price for an airline ticket, you might assume it’s just a flat amount for the flight. But behind every fare is a complex combination of components that follow strict construction logic. This process—called fare construction—is used globally to create valid ticket prices that comply with airline rules, taxes, and routing systems.

This article breaks down how fare construction works, why it matters, and how it underpins everything from competitive pricing to route planning. Understanding this foundation helps make sense of why prices differ by market, time, and even booking platform.

What Is Fare Construction?

Fare construction is the process of combining one or more individual fare components to build a valid fare for a passenger’s full journey. This process must comply with airline fare rules, routing restrictions, regional taxation, and international pricing agreements.

It’s used by:

• Airlines (for fare filing and validation)
• Travel agencies (when pricing and issuing tickets)
• GDS platforms (to auto-price itineraries)
• Systems like ATPCO (to validate and distribute fare data)

The Core Components of a Fare

A fare is constructed from several moving parts:

• Base Fare – The core price for a segment or journey, usually published by the airline
• Fare Basis Code – A code that defines the fare’s rules, cabin, and restrictions
• Routing – Specific allowable paths between origin and destination
• Fare Rules – Conditions like refundability, advance purchase, or stay requirements
• Surcharges – Often fuel-related (YQ/YR) or security-related
• Taxes – Country- and airport-specific taxes (e.g., US September 11 Fee, UK APD)

The final amount the passenger sees is the total ticket price, which combines all of the above.

One-Way vs. Round-Trip Fares

Fares can be constructed as:

• One-way – A fare that covers travel in one direction
• Half-round-trip – Half of a round-trip fare, often used to construct complex itineraries
• Round-trip – A bundled fare covering outbound and return travel under the same fare rules

In international pricing, round-trip construction is common, especially when using published fares governed by IATA rules.

Constructing a Fare: A Simplified Example

Let’s say a traveler flies from New York (JFK) to London (LHR), then returns a week later. A simplified fare construction might look like this:

  JFK-LON 300.00 USD AA Q R30APR 
  LON-JFK 310.00 USD AA Q R07MAY 
  Fare Construction: JFK AA LON 300.00AA LON AA JFK 310.00NUC610.00
  Equivalent Fare: USD 610.00
  Taxes: US 9/UK 120/YQ 80/etc.
  Total: USD 819.00

Each segment has a base fare with a corresponding rule. Taxes are added based on the itinerary and stopovers. The “NUC” (Neutral Unit of Construction) is used to standardize fare calculations globally.

Fare Construction Rules

Fares can only be combined if certain conditions are met:

• The carrier must permit the combination
• Fare rules must allow half-round-trip combinations
• Routing and stopover conditions must be respected
• Fare breakpoints must match allowable combinations (e.g., end-on-end or side trips)

Violating these rules means the itinerary cannot be priced—or results in a higher, restructured fare.

Types of Fare Combinations

• End-on-End – Two fare components joined at a connecting point (e.g., JFK–LHR–CDG)
• Circle Trip – A journey that returns to origin using different routing or fares
• Open Jaw – A trip where the return flight departs from a different city (e.g., JFK–LHR outbound, CDG–JFK inbound)
• Back-to-Back – Often used to circumvent fare restrictions (frequently monitored by airlines)

The Role of ATPCO

ATPCO hosts fare rules and routing data used by pricing engines. When a GDS prices a ticket, it pulls fare construction logic from ATPCO’s database, which includes:

• Fare rule categories (e.g., advance purchase, penalties)
• Routing maps and mileage validations
• Carrier filing permissions and combinations

Fare construction wouldn’t function globally without this centralized standard.

Why Fare Construction Matters

Even in the age of dynamic pricing and retailing, fare construction still underpins:

• How prices are validated and ticketed
• How agents and systems check for fare rule compliance
• How airline pricing and RM teams structure their competitive strategies
• How errors are detected in pricing audits

Fare Construction and PriceEye

Tools like PriceEye monitor fares across competitors, including fare basis codes and construction logic. Understanding how fares are built allows analysts to spot misfiles, inconsistencies, or strategic shifts like:

• A carrier introducing a short-validity fare to undercut competitors
• Competitors shifting fare ladders by removing mid-tier options
• Routing changes to accommodate more flexible pricing

Conclusion

Fare construction is a hidden but vital part of airline pricing. It governs how prices are built, what combinations are valid, and how tickets are sold and enforced. Whether you’re in pricing, revenue management, or tech, understanding fare construction gives you insight into the building blocks of every ticket—and why two travelers flying the same route might pay very different fares.

Next, we’ll look at Fare Rules 101—how restrictions shape what a fare can (and can’t) do, and how they help airlines create pricing products tailored to different traveler segments.