Three fare brands at four price levels use 12 of your 26 booking letters
An airline controls what it sells through booking classes, each named by one letter of the alphabet. A reservation system and a GDS show which letters are open on a flight, and a filed fare points to a letter. That leaves 26 at most, before anything else claims one.
Fare brands use them quickly. Three brands, such as a basic, a standard and a flexible fare, each sold at four price levels, take 12 letters in one cabin. Award seats, upgrades and partner codes need letters as well.
| Brand | Level 1 | Level 2 | Level 3 | Level 4 |
|---|---|---|---|---|
| Basic | O | Q | V | L |
| Standard | T | K | H | M |
| Flexible | S | B | W | Y |
12 letters used. 14 remain for awards, upgrades, partner codes, groups and future products.
A regional airline has more room, but not as much as it looks
A one-cabin regional carrier has no premium letters to set aside, so 26 looks generous. The practical limit is lower, because every letter that is open needs a seat limit, and a forecast to set it. Two analysts cannot manage twelve price points well across thirty daily flights if the demand behind each one is too thin to read.
Our working rule is to decide the number of price levels your data can support first, then multiply by the number of brands, and only then design the products. This is our judgement from practice, and no standard exists.
Count the letters before you commit
- List every letter in use today, including those used only by partners or for awards.
- Remove the ones with no bookings in the past 12 months.
- Check how many price levels your flights can tell apart, using booking history by letter.
- Multiply by your brands and keep a reserve for what you have not thought of yet.
What continuous pricing changes
Continuous pricing keeps the letters and attaches more prices to them. Lufthansa Group's public guideline describes its price offers as "not filed, but currently derived from the standard filed fares". The offer "can be lower or equal compared to standard pricing, but never higher", and the fare basis stays the same, so the fare rules do not change.
It has a limit. The same guideline says travel agents using a GDS do not have access to these price offers. For a regional airline with a high share of GDS sales, a better-designed ladder of filed fares is the first step, and it has to be right before continuous pricing can add anything.
Sources
- Lufthansa Group, Continuous Pricing Logic, public guideline, November 2023.
- The count of 12 letters is arithmetic. The advice on price levels and analysts is our judgement.