How airlines can charge you different prices for the same seats

FREQUENT FLYER 101 | Everybody understands that airfares change from day to day, but many travellers are surprised to learn that passengers on any given flight will pay a range of different prices for exactly the same experience.

Those different fares include special sales versus last-minute pricing, but they also come with varying degrees of flexibility in the cost of changing booking details (or cancelling your flight), the number of frequent flyer points and status credits you'll earn, and even if you qualify for a points-based upgrade (from economy to business class, for example).

Australian Business Traveller takes a look at just how wildly airfares can vary and how different choices can affect your travel plans.

Introduction to fares and fare letters

With so many different fares and prices available for each flight, airlines keep track of them all by assigning a different letter of the alphabet to each one – also known as a 'fare bucket' or 'fare bracket'.

Sometimes, airlines will even use the same letter to represent more than one fare price, such as when the tickets are similar or are programmed to increase in price closer to a flight's departure time.

For instance, Qantas uses the letter 'F' to represent full-price first class fares (First Flex), 'A' for lower-cost first class tickets (both First Saver, First Sale) and 'P' for first class flights booked using frequent flyer points: yet all of these fares still get you a seat in first class.

The way letters are used varies between airlines and even between destinations, but as an example, here's how Qantas applies them on international Airbus A380 flights between Australia and the USA:

• First class Flex: F
• First class Saver/Sale: A
• First class reward flight: P
• Business class Flex: J, C
• Business class Saver: D
• Business class Sale: I
• Business class reward flight: U
• Premium economy Flex: W
• Premium economy Saver: R
• Premium economy Sale: T
• Premium economy reward flight: Z
• Economy Flex: Y, B, H
• Economy Saver: K, M, L, S + G (group bookings)
• Economy Sale: N, Q, O
• Economy reward flight: X

Those letters won't mean much on their own, but take a look at just how many fares those letters represent and how widely they can vary in cost, based on real-world Qantas Airbus A380 ticket prices currently available between Sydney and Los Angeles, sourced from travel website ExpertFlyer.

You'll spot the fare letter in the 'booking class' column, the fare price (excluding taxes and other surcharges) in the 'fare' column and the class of service in the 'cabin' column.

We've coloured economy fares in grey, premium economy fares in lilac, business class tickets in red and first class in gold, as follows:

Even though there are only four classes of service on the plane, we can see that Qantas is actually selling fares at 31 different prices on exactly the same flight, with 12 different fare costs in economy, four levels of premium economy pricing, 10 different business class fares and five tiers of first class.

On top of that: unlisted group (G) fares and Qantas frequent flyer reward bookings (P, U, Z, X), taking the number of fares to a staggering 36 on every A380 flight.

With those 36 booking types shared between up to 484 passengers, there's every chance that only 12 other people on board will have paid the same price as you, while the remaining 471 passengers all paid a different amount in either cash or frequent flyer points.

Interestingly, paying more for your ticket also doesn't necessarily get you a better seat, with some premium economy 'T' tickets less-expensive than several economy fares and even six business class tickets lower in cost than a full-fare economy booking!

On these flights, two business class fares are also more expensive than the lowest-cost return journey in first class, so it pays to check all of your options before you book.

That's where a skilled travel agent can really come in handy, as you might not realise on your own that a seat in a higher cabin is selling for less than what you'd pay for one further back.

What else can I learn from fare letters?

Along with determining how much you'll pay for your ticket and how flexible that ticket will be, fare letters also determine how many frequent flyer points you can earn – and in some cases, how many points you'd need for an upgrade.

For instance, book a 'T' class premium economy flight from Sydney to Los Angeles for $2,750 return (+ tax) and you'd earn at least 18,000 Qantas Points plus 180 status credits on the return trip, as 'T' class is a Premium Economy Sale fare, which aligns to the 'flexible economy' earning rate in the Qantas Frequent Flyer program.

Stump up $4,810 (+ tax) for a higher-cost 'R' class fare and you'd pocket a greater 22,500 Qantas Points – but the same 180 status credits – being under the more generous 'premium economy' Qantas earning category as a Premium Economy Saver fare.

Or, make that a 'W' class Premium Economy Flex fare for $6,310 (+ tax) and earn 24,800 Qantas Points plus 230 status credits on the return trip under Qantas' 'flexible premium economy' rate.

Confused? You can use the chart above to find any fare letter at the bottom, and see how it corresponds to the various Qantas Frequent Flyer earning categories at the top.

Armed with that information, you can then call up Qantas' frequent flyer earning calculator to see how many points that same ticket would earn: choosing 'flexible premium economy' for Premium Economy Flex fares in 'W' class, for example:

As a result, you may decide to purchase a slightly higher-priced fare to earn more frequent flyer points and status credits, or you could choose to purchase the lowest available ticket, knowing that you'll fly in exactly the same seat as the passenger next to you, who probably won't have paid the same fare as you.

Chris C.

Chris is a a former contributor to Executive Traveller.