Fares & Pricing

Dynamic pricing engine built on Continuous Pricing principles. We generate offers, we don't file fares.

Core Philosophy

"We Don't File Fares; We Generate Offers"

┌─────────────────────────────────────────────────────────────────┐
│                                                                 │
│  Legacy Fare Ladders (ATPCO)        Continuous Pricing          │
│                                                                 │
│  Price                              Price                       │
│    │    ┌──┐                          │     ╭─────────────╮    │
│    │   ┌┘  │                          │   ╭─╯             │    │
│    │  ┌┘   └─┐                        │ ╭─╯               │    │
│    │ ┌┘      │                        │╭╯                 │    │
│    │┌┘       └─┐                      ╭╯                  │    │
│    └┴──────────┴──── Time/Demand     ╰───────────────────│    │
│                                                                 │
│  26 discrete price points      →     Infinite price points     │
│  Static fare basis codes       →     Dynamic calculation       │
│  Filed with ATPCO              →     Generated in real-time    │
│                                                                 │
└─────────────────────────────────────────────────────────────────┘

Bypassing ATPCO

Pricing lives in the engine, replacing archaic rules with real-time logic:

Legacy Rule	Replaced By
Saturday Night Stay	Demand signal
14-day Advance Purchase	Lead time factor
Round-trip Required	One-way pricing default
Fare Basis Codes	Dynamic tier (P1-P5)

Continuous Dynamic Pricing

The Pricing Formula

Price = f(demand, lead_time, competitor_price, inventory_position, customer_value)

Real-Time Inputs

Signal	Source	Weight	Latency
Demand	Booking velocity, search volume	High	Real-time
Lead Time	Days to departure	High	Static
Competitor Price	Scraper/API	Medium	15-min cache
Inventory Position	OMS/Inventory	High	Real-time
Customer Value	Loyalty tier, history	Medium	Real-time
Day of Week	Calendar	Low	Static
Seasonality	Historical patterns	Medium	Daily refresh

Dynamic Pricing Flow

Shopping Request (/AirShopping)
         ↓
┌────────────────────────┐
│     Offer Engine       │
│  ┌──────────────────┐  │
│  │    Inventory     │  │
│  │    (P1-P5)       │◄─┼── Availability by tier
│  └────────┬─────────┘  │
│           │            │
│  ┌────────▼─────────┐  │
│  │  Merchandising   │  │
│  │     Rules        │◄─┼── Bundles, upsells
│  └────────┬─────────┘  │
│           │            │
│  ┌────────▼─────────┐  │
│  │  Pricing Engine  │  │
│  │                  │◄─┼── Price = f(demand, lead_time, ...)
│  └────────┬─────────┘  │
│           │            │
│  ┌────────▼─────────┐  │
│  │   Tax Engine     │◄─┼── GST/VAT by O&D
│  └────────┬─────────┘  │
└───────────┼────────────┘
            ↓
      Priced Offer
      (valid 15 min)

Price Validity Windows

Stage	Validity	Rationale
Shopping response	15 minutes	Allow comparison shopping
Priced offer (OfferPrice)	10 minutes	Match inventory hold
Order created	Price locked	Confirmed transaction

Ancillary Pricing

SKU-Based Model

Every ancillary is a priced SKU that can be added to the order:

SKU Type	Pricing Logic	Example
Seat Selection	Seat map position, cabin class	Window +$15, Exit +$50
Baggage	Route, weight tier	20kg CCS-MAR $25
Meals	Route length, meal type	VGML $12
Priority Boarding	Flat fee	$15
Lounge Access	Airport, tier	CCS $35

Dynamic Bundling

┌─────────────────────────────────────────────────────────────────┐
│                   "The Commuter Bundle"                         │
│                                                                 │
│  ┌──────────┐  ┌──────────┐  ┌──────────┐                      │
│  │  Flight  │  │  Coffee  │  │ Carry-on │                      │
│  │          │  │          │  │          │                      │
│  └──────────┘  └──────────┘  └──────────┘                      │
│                                                                 │
│  Bundle Price: $89  (vs. à la carte $105)                       │
│  Savings displayed: 15%                                         │
│                                                                 │
└─────────────────────────────────────────────────────────────────┘

Data Model

Offer (Not Fare)

Offer
├── OfferID (UUID)
├── ValidUntil ─────────────── 15 min from creation
├── Segments[]
│   ├── FlightRef
│   ├── PriceTier (P1-P5)
│   └── CabinClass
├── Pricing
│   ├── BaseAmount ─────────── Dynamically calculated
│   ├── Taxes[]
│   │   ├── TaxCode
│   │   ├── Amount
│   │   └── Description
│   ├── Fees[]
│   └── TotalAmount
├── Ancillaries[] ───────────── Available add-ons
│   ├── SKU
│   ├── Price
│   └── Included (boolean)
└── PricingInputs ───────────── Audit trail
    ├── DemandScore
    ├── LeadTimeDays
    └── InventoryPosition

Performance Requirements

Metric	Target
Pricing calculation	<100ms
Full offer response	<500ms
Concurrent price requests	500+
Price cache TTL	60 seconds

Integration Points

System	Direction	Data
Inventory	Inbound	Tier availability (P1-P5)
Revenue Management	Inbound	Demand signals, price floors
Tax Engine	Inbound	Tax rates by O&D
OMS	Outbound	Priced offers
NDC Gateway	Bidirectional	AirShopping, OfferPrice
Competitor Monitor	Inbound	Market prices

Research Topics

ML model for demand forecasting
Competitor price scraping architecture
Price elasticity modeling
A/B testing framework for pricing
Ancillary attach rate optimization
Bundle effectiveness metrics

Legacy / Interline Considerations

ATPCO (When Required)

For interline agreements or legacy system compatibility:

Public fare filing for codeshare partners
ATPCO Tax Box for complex international routing
Fare construction for through fares
NUC/ROE for currency neutrality

Note: These are fallback mechanisms. Primary pricing is continuous and dynamic.

Fare Data Model (Legacy Reference)

Fare (Legacy)
├── FareID, CarrierCode
├── Origin, Destination
├── FareBasis, FareClass ───── Mapped to P1-P5
├── OneWayRoundTrip
├── Amount, Currency
├── Rules
│   ├── ValidityDates
│   ├── AdvancePurchase ────── Replaced by lead_time
│   ├── MinMaxStay ─────────── Deprecated
│   └── Combinability
└── Taxes[]