Exchange Rates Services
International air transport depends on the ability to establish tariffs, use the service of interline partners and to settle amounts due for interlining traffic in the agreed settlement currency. In order to establish selling fares and to perform interline invoicing and settlement, airlines must have rates of exchange between world currencies. Rules have been developed and maintained so that exchange rates are monitored against base currencies such as USD, GBP, EURO.
There are six sets of rates that are produced for airlines.
Call Day Rates (CDR)
Call Day Rates are the rates for one day each period, seven days after the "advice day" that the IATA Clearing House accepts or makes payments. CDR's are calculated by taking an average of the buying and selling rates on the day of payment. These rates are used to ensure that ICH customers are not exposed to any currency exchange risk on miscellaneous interline billings that may occur between the time an invoice is billed through the ICH and the time that it is settled.
Five Day Rates (FDR)
Five day rates are the average of the exchange rates for the five banking days ending on the 25th of each month. This calculation is based on the average between the buying and selling rates and the rates are expressed in USD, EUR, and GBP. FDR's are used by ICH members to convert interline billing into the billing currency. The previous month's FDR's are used for the current month's interline billing. The process developed to calculate the FDR's also contains a function to identify differentials of over 10% between one month and the next.
Monthly Mean Rates (MMR)
If the calculation of a Five Day Rate (FDR) demonstrates a differential of over 10%, the ICH also produces an alternative rate by calculating the average of that currency's exchange rate for the entire month. This alternative rate is called the Monthly Mean Rate and is used by ICH members to adjust their cargo and passenger invoices.
IATA Rates of Exchange (IROE)
IATA Rates of Exchange provides monthly updates of IATA currency rates of exchange used by the industry for fare/rate construction. They are built based on the average of the five banking days ending on the 10th of each month. The IROE is available for purchase in two formats: a PDF document issued quarterly with monthly e-mail updates of significant changes and an Electronic Data File version delivered monthly.
Special Drawing Rights (SDR)
The SDR rates are synthetic rates derived to provide a neutral means of monitoring currency fluctuations in order to revise, if necessary, local currency fares and charges. Every currency in the ICH database is expressed as an SDR base rate. Every new rate expressed in SDR is compared to the base rate and if there is a variation exceeding 3% during 20 consecutive days, the system will calculate a new base rate. SDR rates are reviewed on the 15th and the last day of every month.
The EURO Rates are derived and published every Tuesday and apply from Wednesday to Tuesday of the following week. The EURO Rates are the exchange rates for the EURO against non-EMU currencies to be used in the Eurozone for the purpose of processing tickets, taxes, charges and refunds. Purchase Euro Rates
Access to the ICH suite of Exchange Rates can be purchased securely.