This document discusses various aspects of fare calculations according to IATA rules, including: - The components of a basic fare calculation - An example fare calculation for a one-way ticket from AUH to JED - Rules for spacing and identifying alphas and numerics - Additional elements like equivalent fare paid, intermediate points, surface sectors, and use of the neutral unit of construction.

1. Building fare
Calculation
By Muhammad Fadil

2. Content
 Writing fare calculation according to IATA
rules
 Spacing in Fare calculation
 Equivalent Fare paid (EFP)
 Intermediate points
 Surface sectors

3. What is a fare calculation and what should it contain?

4. Origin
Destination
Carrier
Fare
Currency
Spacing in Fare calculation
Rate of exchange
Taxes
NUC

5. A one way ticket purchased to travel from
Abu Dhabi (AUH) to Jeddah (JED) on Etihad
airways (EY) at 100.00AED.
How to Write a fare calculation from the above?

6. All fare calculation should start with the city or
airport code the passenger starts his journey and
should end with the arrival point.

7.  Here the starting point is Abu Dhabi – AUH
 Arrival point here is Jeddah – JED
In between every city pairs (Departure point – arrival points) there should
be a carrier (airline on which the passenger is travelling).
 Here carrier is Etihad airways – EY

8. The fare calculation should also
contain the fare paid for the ticket
and the currency in which the ticket
was purchased.

9.  Here the fare is 100 and the currency is AED
 The currency is always written in 2 decimal places
(2 dp) in the fare calculation – 100.00AED
 The fare should be written in the fare both before the
currency and after the currency.
 Note: In the next session, it will be explained why the fare should be
written twice in the fare calculation
Here the currency and the fare would be written as:
100.00 AED 100.00

10. The journey and the fare should stop with an
‘END’
100.00 AED 100.00 END

11. After the ‘END’ comes the rate of exchange -ROE used to
sell the ticket.
 Here the ticket was purchased in AED and we will be using
a rate of exchange of 1.00000.
 Rate of exchange should be written in 5 decimal places(5
dp)
Thus, the rate of exchange here will be written as follows:
ROE 1.0000

12. After the rate of exchange comes the taxes which normally
starts with XT. It will be describe in other session

13. A one way ticket purchased to travel from Abu Dhabi (AUH) to Jeddah (JED)
on Etihad airways (EY) at 100.00AED.
From the above description, our fare calculation is:
AUH EY JED 100 AED 100 END ROE 1.00000

14. Spacing in fare calculation (Alpha-numeric rule).
The rule of spacing mentions that there should be a space
between each alpha(words) in a fare calculation and no
spacing between the numeric(digits).
Below the space is shown using a underscore ( _ )
AUH_EY_JED100.00AED100.00END_ROE1.0000

15. Below is a short list of what is considered as
Alpha and what is considered as numeric in a
fare calculation
WORDS in fare calculation Numbers in fare calculation
 City or airport codes
 Currency
 Rate of exchange(ROE)
 Mileage(M)
 Surcharges (Q)
 IT or BT
 END
 Tax codes
 Fare
 Value of rate of exchange
 Tax rates

16. Using the above description write the fare calculation of the followings:
One way ticket to travel from Abu Dhabi (AUH) to
Ahmedabad (AMD) on Etihad airways. Ticket was
purchased at 250AED in Abu Dhabi.

17. AUH_EY_AMD250.00AED250.00END_ROE1.00000

18. Return trip ticket to travel from Abu Dhabi to France (CDG) and return
back to Abu Dhabi.
The passenger will travel from Abu Dhabi to France by Etihad Airways
and return by Air France (AF).
The ticket was purchased at 521 AED in Abu Dhabi.

19. AUH_EY_CDG_AF_AUH521.00AED521.00END_ROE1.00000

20. Equivalent Fare paid (EFP)
An equivalent fare paid is money paid to purchase a ticket in
another currency other than that of currency of country
where the ticket is been purchased.
When an equivalent fare paid is used in a fare calculation, the
rate of exchange should be calculated before constructing a
fare calculation.

21. Why do we need to calculate the EFP?
The reason to calculate the EFP is because the
currency of account (listing currency) of Etihad
Airways is AED.
Thus for accounting and reporting purposes all
currency should be converted in AED.

22. For example:
A one way ticket purchased to travel from Abu Dhabi
(AUH) to Jeddah (JED) on Etihad airways (EY) at
100.00USD.
First we need to get our rate of exchange using the Bank
selling rate (BSR) in the master.
1 USD = 3.67 AED
Fare calculation:
AUH EY JED100.00USD100.00END ROE3.67000

23. How to calculate the EFP:
A one way ticket purchased to travel from Abu Dhabi (AUH) to
Jeddah (JED) on Etihad airways (EY).
The listing price of the ticket in Abu Dhabi is 200AED but the
ticket was purchased in America using USD.
The bank selling rate is 1AED = 0.27USD

24. A one way ticket purchased to travel from Abu Dhabi (AUH) to Jeddah (JED) on Etihad airways (EY).
The listing price of the ticket in Abu Dhabi is 200AED but the ticket was purchased using USD.
The bank selling rate is 1AED = 0.27USD
Local currency fare(LCF) = 200AED
Bank Selling rate (BSR) = 0.27USD
Equivalent fare Paid = 200 x 0.27
= 54 USD
Fare calculation:
AUH EY JED54.00USD54.00END ROE0.27000

25. Neutral Unit of construction (NUC)
What is the NUC? And is it used in Fare
calculation?

26. Definition of NUC
The neutral unit of construction is a standard
unit (currency) used in the aviation industry to
construct fare calculation.
1.00 NUC is equivalent to 1.00 USD

27. Why using the NUC?
When constructing fare calculation where two or
more local currencies have to be used it is
easier to convert the currency into the Neutral
unit of construction

28. Example
A return trip (RT) ticket bought in Abu Dhabi to travel
from Abu Dhabi (AUH) to London (LON) having a
stop point in Paris (PAR).
Since the local currency of Abu Dhabi is AED and
the local currency of London is GBP it will be
impossible to add the two fares to get the gross
fare for constructing the Fare calculation. Thus the
NUC is used as an standard currency.

29. How to construct a fare calculation using
NUC:
 Convert all currencies to be used for
constructing the fare calculation into NUC
using the rates published by IATA RATE OF
EXCHANGE(IROE) or the local currency can
be converted into USD since 1.00 NUC=
1.00USD.
 Then use the local currency rate for NUC as
ROE.

30. For Example
A one way ticket purchased in AUH at 150AED
to from AUH to JED on Etihad Airways. Using
the rate 1 AED = 0.27 NUC

31. Fare calculation in AED:
AUH EY JED150.00AED150.00END ROE1.00000
Fare calculation in NUC
Currency in NUC = 150 x 0.27
= 40.50NUC
Fare calculation:
AUH EY JED40.50NUC40.50END ROE0.27000

32. Intermediate points

33. An intermediate point is any stop point
where the passenger will stop during
his journey.
An intermediate point can be voluntary
or involuntary

34. For example:
A just married couple wants to have there honeymoon in London but they also
want to see Paris before going to London and return back Abu Dhabi.
They purchase a return trip (RT) ticket in Abu Dhabi at 600 AED to travel from
Abu Dhabi (AUH) to London (LON) with a stop point of 2 days in Paris. The
journey will completely be done on Etihad Airways.
In this example, our intermediate or stop over point is Paris(PAR)
Therefore our fare calculation will be represented as:
AUH-EY-PAR-EY-LON-EY-AUH600.00AED600.00END ROE1.00000

35. Types of intermediate points:
 Intermediate point with stop over
 Intermediate no stop over point

36. Intermediate point with stop over
An intermediate point where the passenger will stop more
that 24 hours is considered as a Stop over point or a
transfer point.

37. Intermediate no stop over point
An intermediate point where the passenger will
stop less than 24 hours is considered as no
stop over point, also known as a transit point.
A no stop over point is shown in a fare
calculation as X/.

38. Example of a no stop over point
A ticket purchased to travel from Abu Dhabi (AUH) to
London (LON) on Etihad Airways at 500AED.
The plane will make stop of 2 hours in Paris (PAR) before
continuing the journey to London
Fare calculation:
AUH_EY_X/PAR_EY_LON500.00AED500.00END_ROE1.00000

39. Surface sectors
A surface sector is when a passenger uses other means
to travel other than airlines.
The surface sector is shown in fare calculation as /- or //
/- is used for unpaid surface
// is used for paid surface

40. Example of Surface sector
A ticket purchased to travel from Abu Dhabi (AUH) to
LONDON (LON) but the passenger will stop in Paris (PAR)
and travel by train to London and return back to Abu Dhabi
by plane.
The ticket was bought at 1000AED in Abu Dhabi and the
journey will done completely by Etihad Airways.
Fare Calculation:
AUH EY PAR /- LON EY AUH1000.00AED1000.00END ROE1.00000