IATA Proposes Flexible Fares for International Travel

IATA is seeking approval for a new fare-setting method that would continue to give U.S. and Canadian consumers the option to buy international interline tickets with the flexibility to change itineraries or switch flights to a different airline.

IATA needs Transportation Department approval for the product it calls Flex Fares because the DOT decided airlines no longer should have antitrust immunity to use the method in place for the past half-century, in which they were allowed to negotiate the level of certain types of fares at IATA tariff conferences.

The DOT decided to withdraw its antitrust immunity for those conferences as of June 30, after deciding that the rate-setting forums, while restricted to certain types of international fares such as the flexible multilateral interline fares, provided too much of an opportunity for airlines to stray into anticompetitive and anticonsumer abuse on all types of international fares.

Australia has taken similar steps and European Union competition authorities have already ended their exemption of the tariff conferences from E.U. competition laws. In fact, the new Flex Fares product already is being offered within the E.U.

The Flex Fares product lets customers change airlines after ticketing; develop and change complex itineraries within a single ticketed price, even during the course of travel; and include an unlimited number of stopovers.

Under the new fare-setting method, IATA each year would calculate an average fare in each market in each class of service and then add a 10 percent premium. The one-way fare would be 75 percent of the roundtrip price.

Fewer than 7 percent of all transatlantic trips involve nonalliance interlining, according to the most recently provided DOT statistics. But Steve Lott, IATA’s spokesman in Washington, said 7 percent is still a significant number.