Journey Types
one-way fares.
Fare Component - A portion of an itinerary between two
consecutive fare construction points.
Direct Route - The shortest all year route operated by a
carrier in both directions between ticketed points at which
it exercises traffic rights.
Direct Fare - For fare construction purposes, a fare
between two points without the application of fare
construction calculations.
Fare Construction Points - The terminal points of a fare
component (also termed as fare break points).
Origin - Initial starting point and the first ticketed point in
the routing. It is also a fare construction point.
Destination - Ultimate stopping place of the journey and
as a terminal point, it is considered as a fare construction
point.
Sectors - A portion of the journey comprised of legs or
segments, mostly used in reference to fare construction. A
single sector involves a pair of points.
Ticketed Point - Point shown in the' good for passage'
section of a passenger ticket.
Intermediate Points - Ticketed points in between
consecutive fare construction points and may also be
called transfer points.
Intermediate stopover point - a point where the
passenger breaks his journey and is not scheduled to
depart within 24hours of arrival. A stopover is specified in
the passenger ticket.
Intermediate NO-stopover point (aka Connecting Point
or Transfer Point) - a point where the passenger arrives
and departs within 24 hrs. It is also known as transfer or a
connecting point.
Note: Transfer points are not the same as transit points.
Unlike transfer points, transit points do not always involve
a change of planes.
Country of Unit Origin - The country in which the unit
origin is situated.
Journey - Origin to destination of the entire ticket.
Pricing Unit - A journey or part of a journey which is
priced as a separate entity.
Unit Destination - The ultimate stopping place of a pricing
unit.
Unit Origin - The ultimate starting point of a pricing unit.
One Way Sub journey - Part of a journey wherein travel
from one country does not return to such country and for
which the fare is assessed as a single pricing unit using
Return Sub journey - Part of a journey wherein travel is
from a point/country and return thereto and for which the
fare is assessed as a single pricing unit using half round
trip fares such as Round Trip (RT) and Circle Trip (CT).
JOURNEY CONCEPT - method of pricing a ticket
In fare computation, the Journey Concept is a method of
pricing a ticket by taking the entire journey a single unit
and apply the fare construction rules to the entire routing.
Journey Concept Example:
In the Pricing Unit Concept, the journey fare is calculated
by breaking it into the lowest combination of stand-alone
Pricing units.
The Pricing Unit Concept Example:
Here two ticketed points SIN-HKG and HKG-SYD are priced
separately, but the cheapest total price will still be applied
for the whole journey. The country of origin is applied as
basis for the final local currency fare.
The lowest fare is based on a single pricing unit for the
whole journey, or by breaking the itinerary into stand
along pricing units - units which can be priced separately,
while applying the fare construction rules to the entire
routing.
Let us study the following journey:
KUL/X/BWN/TPE/JKT/SIN
KUL is the origin of the entire journey.
Origin - is the very first city where the route starts. Aside
from being the initial ticketed point is also a fare
construction point (FCP).
SIN is the Destination city, the last city of the entire
route, it is also the other end of the fare construction point
(FCP).
Fare Construction Points (FCP), also known as the terminal
points of a fare component (also termed as fare break
points).
So, in this journey, to calculate the single unit price fare, we
initially check the direct fare (NUC Value) of the journey –
KUL/SIN, regardless of the stops in between these two
terminal points.
Intermediate Points are BWN, TPE and JKT
BWN, which has an X/ before the City code implies
connection. BWN is a connecting point, it is an
intermediate ticketed point where a passenger transfer
flights within 24hours of arrival.
TPE and JKT are both Stopover Points - passenger
arrives and will not depart within 24hours of arrival.
Under the Pricing Concept, the passenger may cut and dice
the journey into standalone fare construction points, each
unit is a Pricing Unit, it can be issued separately or
combined in one ticket on end-on pricings. The pricing
units may also be called sub-journeys.
The two concepts are to be integrated as the Pricing Unit
Concept, to be able to arrive at the lowest fare for the
entire journey.
If we are to price separately the three possible sub-
journeys, or three ticketed points are the following:
KUL/XBWN/TPE [KUL-TPE] is Pricing Unit 1 (PU1), TPE-
JKT is Pricing Unit 2 (PU2), and JKT-SIN is Pricing Unit 3
(PU3).
Since the final destination is not from the same country of
the origin city, this will be assessed as One Way (OW)
journey.
One-Way Sub journey
One Way sub journey or OW is the part of a journey
wherein travel from one country does not return to the
same country, and for which the fare is assessed as a single
pricing unit using one-way (OW) fares.
A one way is a trip in a continuous direction from the
origin to the final destination without a return to the
origin.
Ex. MNL/KUL/SIN where the Origin is MNL, Philippines,
and final Destination is SIN, Singapore. The Fare
constructed points (FCP) is MNL/SIN, it did not return to
the same country and pricing unit to be used is MNL/SIN
OW fare.
Return Sub journeys
Return Sub journey Part of a journey wherein travel from
point/country and return thereto and for which the fare is
assessed as a single pricing unit using half round tip fares
such as Round Trip (RT) and Circle Trip (CT).
- Round Trip
Round Trip - A pricing unit entirely traveled by air from a
point to another point and return to the original point. It
has two fare components of equal normal fares.
 Typically have two fare components, the outbound and
inbound component
 The outbound normal fare is equal with inbound
normal fare
 The origin and destination points are the same
For fare calculation, use the actual direction of travel
except for the fare component that ends in the pricing unit
origin(inbound), where you assess fares from such country
in the reverse direction of travel.
The fare breakpoint used is the point of turnaround, which
is the farthest geographical fare break.
Example:
MNL/HKG/LON/HKG/MNL
- Circle Trip
A circle trip is a travel from a point and return thereto by
a continuous, circuitous air route, including travel
comprising two fare components but which do not meet
the conditions of the round-trip definition. The origin and
final destination of a CT are the same but the outbound and
the inbound fares are not equal.
 CT may have two or more fare components unless
used for special fares
 Fare components that end in the country of pricing
unit origin, use the fares in the reverse direction of
travel
 For those fare components between Canada/USA and
components within Scandinavia, assess fares in the
direction of travel.
 the CTM applies to a circle trip pricing unit
Example itinerary:
MNL / DEL/ LON/ HKG/ MNL
Farthest point or Point of Turn Around is LON
Outbound route - MNL/DEL/LON
Fare Direction MNL-LON Fare is 1/2 roundtrip of MNLLON
Inbound route - LON/HKG/MNL
Fare Direction MNL-LON Fare is 1/2 roundtrip of MNLLON
(inbound follows reverse Fare)
This route goes back to MNL but outbound and inbound
stops at different cities, the Outbound fare plus Inbound
will give total circle trip fare.
Open Jaw
An open jaw journey may have only two international
fare components and may contain domestic surface
sectors. Such journeys use 1/2RT fares.
An open jaw is a trip of a round-trip or circle-trip nature
except it is “interrupted” by a surface or non- air segment
in the itinerary. In reservations, a surface segment is
inserted in an itinerary and means Arrival Unknown or
ARunk or ARNK.
An open jaw occurs when any of the following happens:
1. The passenger’s outward destination is different from
the departure city for the return trip (the trip is “open-
ended” on the outbound portion of the trip).
2. The passenger departs from the origin city and returns
to a different city (the trip is “open-ended” at the
return portion of the trip).
The following are the types of Open Jaw journey:
1. SINGLE OPEN JAW -contains one surface sector
a) Turnaround Open Jaw - the outward point of arrival
and the Inward or inbound point of departure are different
Example: MNL/PER//SYD/MNL
Origin is from MNL, Destination PER, upon arrival in
Australia passenger decides to go by land going to Sydney,
and returns back to MNL from Sydney. There is an open
jaw, an Arunk from Perth to Sydney, Australia, this is the
open segment at the point of turnaround.
b) Origin Open Jaw - the outward or outbound point of
departure and the inward or inbound point of arrival are
different.
Example:
LAX/LON/NYC
Passenger origin is LAX destination is LON, but upon
return, the passenger does not go back to Los Angeles, but
arrives in New York instead. As we know, LAX and NYC are
both in USA, but there is an Arunk segment or no flight
coupon from New York to Los Angeles in his return, thus
we say that there is a gap in the Origin.
2. DOUBLE OPEN JAW
- contains two surface sectors, one at the origin point and
the other at the turnaround point.
Example:
MNL/JKT/-SUB/CEB
The Origin city is MNL, Destination is JKT, Indonesia, but
passenger does not have a flight from Jakarta to Surabaya,
passenger goes by land to Surabaya-there is a gap in the
Destination country, and going back to the Philippines,
instead of going back to the Origin- MNL, passenger arrives
at CEB instead and there is no link flight from Cebu to
Manila, so there is also a gap in the country of Origin.
There is gap at both ends - in the Origin and at the point of
turnaround-this is an example of a Double Open Jaw.
Exception:
One COC (country of commencement) rule applies:
 Scandinavia shall be considered as one country. In
IATA division, Scandinavia is composed of Denmark,
Norway, and Sweden. (Finland is not part of IATA
Scandinavia)
 Canada and USA, is considered as one country.
This means that if the gap is from any of the Scandinavian
countries or between Canada /USA, 1/2 roundtrip shall be
applied as per Open Jaw fare calculation principle.
Example:
1. CPH-LON-OSL
Origin - Copenhagen, Denmark
1st Destination - London, UK
Final Destination - Oslo, Norway
Since the Origin and the final destination are from
Scandinavia, they are treated as One country, so therefore
instead of treating the journey as One Way
we are looking at an Origin Open jaw, and the point of
turnaround is LON. We can apply the 1/2 round trip fare
for the Outbound and the Inbound
we take the 1/2 roundtrip fare of CPH/LON and add the
1/2 round trip fare of OSL/LON (Inbound fare at the
reverse as it is treated as a return sub journey). This
effectively lowers the fare for the whole journey.
BASIC FARE CONSTRUCTION STEPS
1. Fare Construction Terms
Neutral units of construction (NUCs) A common unit of
fare and are a fictitious currency They are used to compare
fares of different countries and add together fares from
different countries. You can convert NUCS into local
currency by applying NUC conversion factors, which you
will know better as IATA rate of exchange (ROE).
Pricing unit concept. A pricing unit is a journey or part of
a journey, which may be priced as a separate entity, i.e. is
capable of being ticketed separately. Most fares are
calculated as a through fare using the mileage system, or
lowest combination of fares. However, for itineraries
where a city or country is visited more than once, an
alternative method of calculating a fare exists; this is called
the pricing unit concept. The concept permits a journey to
be broken up into subsections (standalone prices, which
could be ticketed separately). If there is a possibility of
collecting a lower fare using pricing units, then this must
be charged.
Rate of exchange (ROE). The rate based on the IATA
clearing house rate which will be revised at least four
times yearly and is to be used for conversion of local
currency fares to NUCs and vice versa.
Round trip. This is an air journey that begins and ends at
the same point. It consists of two fare components (there
and back), which are at the same level, or if they are at
different levels this is only due to the class of travel, season
or midweek/weekend differences. Routing ends at the
same place as the starting point. Note: For calculation
purposes split the table into two sections: one for
outbound, one for return.
Stopover. A deliberate interruption of a journey by the
passenger, agreed to in advance by as, at a point between
the place of departure and the place of destination.
Furthermore, a stopover will be deemed to occur at an
intermediate point from which the passenger is not
scheduled to depart on the date of arrival. If there is no
connecting departure scheduled on the date arrival,
departure on the next day within 24 hours of arrival shall
not constitute a stopover. If a portion of the routing is
travelled by surface transportation, one stopover shall be
deemed to have been taken for such portion.
Surface sector. When a journey contains a surface sector
there are two possible constructions (1) the total through
fare, including the surface sector mileage and (2) the sum
of the fares for ↑ the actual sectors flown, missing out the
surface sector.
Surface sector returns (open jaws). Normal fares that
contain a domestic surface sector, either at the origin of
the journey or at the destination, are called normal open
jaw (NOJ) itineraries.
Break point or turnaround point. The place furthest
away from the starting point. If it is not immediately
obvious, either check the map or identify which city on the
routing has the highest MPM from the point of origin.
Endorsements If a change of carrier is required and the
ticket is to be reissued or revalidated, then an
endorsement of the appropriate coupon(s) is normally
required on the original ticket. This endorsement proves
that the airline is assigning part of the routing - and
therefore some of its revenue - to another carrier.
Higher intermediate point (HIP). A HIP fare is a fare in
the same class of service between any two ticketed points
in a fare component that is higher than the origin to
destination fare.
IATA rate of exchange. The ROE notified by IATA
quarterly to convert local currency fares to a neutral unit
of construction (NUC) and to convert total NUC amounts to
the currency of the country of commencement of
transportation.
Linear format. Where the through fare is charged, the
linear format would be constructed like this. The surface
sector is shown as '//' between the two cities (replacing
the carrier code).
Maximum permitted mileage (MPM). Reflects the
distance limit between two specified international points
within which passengers can travel at the direct fare,
provided that the sum of ticketed point mileage distance is
not exceeded. Mileage surcharging When the TPM exceeds
the MPM, then we have to check how much we have to
surcharge to bring it back within the MPM.
Reissues. A reissue is required for any situation that
cannot be covered by a revalidation. It any change in the
routing is involved, then the fare must be reassessed
before the ticket is reissued.
Return journeys. Similar to one-way journeys. There are
just a few important differences. Carry out a mileage check
separately for both the outward and return journeys. If
there is a return fare published, always use half to
calculate the outward and half for the return calculation - if
no return fare is published, use one-way fares. Check for
HIPS in the direction of travel for the outbound
component, but for the inbound component fares must be
looked up in the opposite direction.
Revalidations. If the change customers wish to make is for
the flight/class/date/time or status only then travel agents
may be able to alter customers' manual or automated
ticket. They do this by making the permitted change to the
booking and then completing a sticker and sticking it onto
the changed flight coupon over the original details.
Ticketed point mileage (TPM). The distance between
pairs of points published in the TPM manual, using non-
stop sector mileage
Turnaround point or break point. The place furthest
away from the starting point. If it is not immediately
Minimum fares check. For One Way Journeys, the
minimum fare check is the one-way back haul check (BHC).
The minimum fare = highest Origin to Stopover city fare
from the origin to any stopover point, excluding mileage
surcharges. The fare for a One-Way trip must not be less
than the HIP fare from the origin to the highest-rated
stopover point, taking into consideration that mileage
surcharges are not applied to the minimum fares.
2. Fare Construction Points (FCP)
We know that in point to point systems of fare calculations
for Domestic one-way trips, fare to each stopover point on
the routing is charged and all fares per sector are added to
arrive at the total fare. In international air fare
calculations, the origin (O) and final destination (D) or O-D
cities are the fare construction points or fare break points
of the journey. These are called fare construction points
(FCP) because a single unit pricing journey will take the
direct fare of these two points regardless of the
intermediate points or stopover points before arrival at
the final destination point. This is because Mileage system
will allow ticket to have intermediate points, stopovers or
connections, between the two FCP points.
For example:
MNL-SIN-KUL-JKT, we will not just add the sectoral fares:
MNL-SIN, SIN-KUL, KUL-JKT fares to arrive at the ticket
airfare. This route will take the through fare of MNL-JKT.
We are talking about normal fare calculations, but for
special fares/ discounted fares such as excursion fares,
restrictions on number of stopovers will be found.
3. Neutral Unit of Construction (NUCs)
International air fares are typically given in the currency of
the country of origin or commencement (COC) or in
standard counting units. As you may have noticed during
your Airline Reservations course, Fare Displays are given
in the currency of the country of origin or commencement
(COC), but will also be displayed in the standard counting
units called neutral units of construction or NUCs. Again,
NUC value is not a real currency, it is neutral and as such is
used to calculate the international air fares regardless of
COC. NUCs are only counting units and not equivalent to
any currency, although interestingly you may note that
IATA selected the US Dollar USD to serve as the basis of the
rates of exchange for NUCs. Typically, 1 NUC = 1 USD.
of this module. Exercises for this course will be provided
with NUC Fares under 'given’ to facilitate training
purposes only.
Rounding Rules
NUCs are NOT rounded off, it is quoted and expressed to 2-
decimal places only.
If calculation arrives at NUC1234.5789, you will only retain
the 2 decimal places after the whole number, no rounding,
simply drop the other decimal numbers
Thus, the final amount is NUC1234.57.
4. IATA Rate of Exchange (ROE)
Since NUC values are not currency, we need to convert the
NUC value into the currency of the country of ticket
issuance or country of commencement (COC). To do this,
we need to multiply the value to a number factor or what is
called the IATA Rate of Exchange (ROE). ROE is notified
by IATA, and it is not a constant number, it is adjusted four
times a year typically every 3 months, unless a major
variation in currency value by more than 10% within the
period occurs. (PTAA-Tariff Course Handbook,2011).
Since the ROE factor is not constant, there is no need to
memorize the factor. For our training, download the iROE
pdf file under the Resources Folder in this module. ROE
values from the Tariff page excepts were accurate at the
time of publication and are to be used for illustration and
training purposes only.
To change NUC amount to a specific local currency,
multiply the NUC by the ROE for that country.
Example: The one-way fare from Paris to New York TC2 -
TC1, we take the AT NUC Through Fare for PAR-NYC as
NUC976.28. To change the NUC value to the currency of
country of origin (COC), get the ROE of the COC, for this
route we get the ROE of France: 0.742833 Rounding Unit
(RU) of LCF= 1, Decimal units (DU) = 2 the heading other
charges is the rounding unit for surcharges.

NUC values from different points are listed under

Worldwide Fares, Passenger Air Tariff and published by
IATA. NUCs are also available for retrieval in the
Computer reservation systems (CRS) and Global
distribution systems (GDS) such as Amadeus, Abacus,
Galileo, and Sabre, under Fare Display entries. 5. Check for Rules/Specified Routings
For our training, download pdf training extract of NUC If the specified routings apply, meaning we check the
samples from Tariff book under Resources and Tools Topic itinerary and if it fits the conditions in any of the specified
routing table, i.e., check the from (origin point) - To
(Destination point) - Via points under the TC Area
applicable, if condition applies then we charge the
published through fare of the FCP. Which means we do not
calculate the TPM and compare to MPM and we do not
apply any checks, we straight away quote the FCP
published fare to the whole journey.
Remember to: - check if the routings apply only in
connection with fares between points specified and via the
points listed and that routings are described in one
direction only, but applies in either direction. (PAT General
Rules,2008).4
Below are sample pages, Passenger Tariff (PAT) Training
Extract (2012) for Specified Routings. If a journey satisfies
any of the condition, check traffic conference (TC) Areas
covered, there is no need to apply for any mileage
processing, it is allowed to charge the Origin-Destination
NUC value without any surcharges.
In fare calculation, prior to applying mileage system the
Specified Routing or rule number has to be checked.
Some identified routings- itinerary included in this ruling
may enjoy application of the published of the Point-to-
point fare, the origin-destination fare without the
application of the mileage system principle. This means if
the particular itinerary is described in one of the specified
routings, we do not apply maximum mileage limit, even if it
exceeds the MPM.
But in our course here, we will not focus on these
routings. Example the route: KHI/BKK/MNL/TYO
conforms to the Specified Routing Rule 2.4.5.3 - Area 3, as
such no further calculation is required, we straight away
apply the published NUC KHI-TYO.
6. Mileage system- Basic Elements
There are three basic elements involved in the application
of the mileage system, namely:
BASIC ELEMENTS
1. MAXIMUM PERMITTED MILEAGE (MPM)
MPM represents the maximum distance (in miles) a
passenger is allowed to travel enroute between origin and
the destination of the published fare. MPM varies
depending on the global indicator, the direction of travel.
2. TICKED POINT MILEAGE (TPM)
a) General - ‘Ticketed point' means points shown in the
Good for passage section of the passenger ticket and other
points for fare construction as shown in the Fare
construction box of the passenger ticket.
b) Calculation - Add up the TPM for each sector between
ticketed points. Compare total TPM with the MPM. When
the total TPM is less than or equal to the MPM apply the
direct published fare.
3. EXCESS MILEAGE SURCHARGES (EMS)
If the Actual TPM (the total after deductions) is still higher,
compared to the MPM of the FCP of the journey, the NUC
amount - the fare will be surcharged accordingly, refer to
the EMS Table.
EMA (TPM Deduction Check before EMS)
When total TPM of the whole journey exceeds the MPM of
the origin- destination or FCP, it may be reduced if an extra
mileage allowance or a special mileage bonus applies to
the routing (check from the EMA Routing Table from the
Tariff handbook). More discussions on EMA on succeeding
pages.
6.1. EXTRA MILEAGE ALLOWANCE -EMA (TPM
DEDUCTIONS)
EXTRA MILEAGE ALLOWANCE -EMA (TPM DEDUCTIONS)
The Ticketed Point Mileage (TPM) for a journey may
exceed the MPM for certain routings. The total TPM maybe
reduced by applying deductions known as Extra Mileage
Allowance or simply TPM deductions.
We refer to the EMA Table which may be seen in the PAT
guide, we have sample pages shown in our Resources.
A TPM deduction is permitted in a routing subject to the
following conditions:
1. The route or journey must be ticketed via the points
shown in the tables.
2. Extra Mileage Allowance apply only to through fares
between the points or areas specified in the tables
attached.
3. The Extra Mileage Allowance should be deducted from
the sum total of TPM before making the comparison
between this total and the applicable MPM.
4. The allowances do not apply in connection with a fare
from or to a point beyond the points or areas specified in
the tables.
Note: In the EMA Table, "-" means "and/or”, "/" means
"or".
In EMA Rule 2.4.3.3 for flights within Area 3 to Area 3, the
key cities to keep in mind, are Delhi, Mumbai, Karachi, and
Islamabad, if is between any city in Area 3 to this point,
there may be bonus mileage given represented by the
deductions on the right column. Example, if the route is
JKT/SIN/KUL/ISB/KHI then this route follows one of the
conditions, travel between AREA 3 and Karachi transit in
Islamabad, there is 700 miles deduction to the total TPM,
before comparing with the MPM.
6.2. Application of Mileage (without surcharge)
6.3. EXCESS MILEAGE SURCHARGE (EMS)
EXCESS MILEAGE SURCHARGE
When the TPM exceeds the MPM, it can be reduced if an
extra mileage allowance or a special mileage provision
applies to the routing. (Important note, before
establishing applicable mileage surcharge, check if EMA
applicable for TPM deductions.)
However, if the journey TPM still exceeds the MPM, the
airfare must be increased by a certain percentage. The
percentage increase is due to mileage an excess mileage
surcharge (EMS), percentage varying from 5 to 25 %.
NOTES:
 When a higher intermediate fare has been determined,
the percentage surcharge will be applied to such
higher intermediate fare rather than the direct fare.
 When the TPM exceeds 25% surcharge level, the
applicable fare will be the combination of two or more
fares along the routing which produces the lowest
fare. The itinerary has to be sliced and diced.
7. Fare Calculation Check - Higher Intermediate Point
HIP checks
HIP rule:
A higher intermediate point (HIP fare) is a fare in the same
class of service between any two ticketed points in a fare
component that is higher than the origin to destination
fare.
If a HIP exists, it must be charged.
(Note: HIPS are sometimes referred to as HIFS (higher
intermediate fares). Both are correct, but HIP is now more
generally used.)
Imagine we had a routing LON/ATH/IST, as shown in the
map. The LON-IST Fare (which we would normally charge
as the origin-destination fare) is NUC506.63
However, the LON to ATH Fare is NUC686.30. This is
because Athens is further forming the point of origin than
IST and so the fare is higher. ATH is therefore the HIP, so
we must charge the higher fare so as not to undercut the
fare to the intermediate point.
Additional notes:

 There may be more than one HIP-charge the highest.

 Any mileage surcharge that applies to a routing must
be applied to the HIP.
 For journeys ticketed inside the country of origin
(which, for the purpose of this course, you should
assume they all are) the HIP check is applicable to
stopover points only - do not check transit points.

Remember: The fare construction rules dictate that when

checking for HIPS you check:

 between the origin and stopover points

 between stopover points and the destination
 between any two intermediate stopover points.

You should therefore check all likely cities for HIPS.

Example:

A routing LON-PAR-BEY.

We must look at possible permutations:

 LON-BEY (this is the origin/destination fare we are

comparing against)
 LON-PAR (not worth checking, see note below)
 PAR-BEY (worth checking).

Note:

It is unlikely that a London to Paris fare (two cities that are

quite close together) would be higher than a London to
Beirut fare. However, it would be worth checking to see if
the PAR-BEY fare was more.

If in doubt, always check.