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Fact Sheet: Flex Fares

  • A large proportion of trips require the services of two or more airlines in order for the passenger to complete a single journey 
  • The interline system is the global network of international air transport services linking most cities with scheduled air services
  • It provides a travel option that enables:
    • Fully flexible fares
    • Last minute changes/routings on other airlines
    • A single ticket (fare) for a journey using two or more carriers
    • Baggage transfer at connecting points
  • Common fares and rules for multilateral interlining are required for such a common system and have been in place for over 50 years 
  • Governments typically have understood the benefits of the interline system and provided immunity from competition laws
  • However, immunities have been scaled back. The block exemption for tariff agreements:
    • Within the EU ended at the end of 2006
    • Between the EU-USA and between the EU-Australia ended at the end of June 2007
    • Between the EU and the rest of the world ended at the end of October 2007
    • The Australian Competition and Consumer Commission (ACCC) ended immunity in June 2008 for markets to/from Australia
  • IATA has developed a mechanism to address competition concerns while maintaining the benefits of interlining for consumers

IATA Flex Fares

  • Face-to-face airline meetings have been replaced by an e-tariffs online voting platform
  • Flex Fares are produced by a mechanism that automatically calculates interlineable fares based on average carrier fares in the pertinent markets 
  • An interlining premium is added to account for the added flexibility of these interline fares 
  • Flex Fares have been adopted and used for all of the IATA routes worldwide except where government approvals are still pending

December 2014


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