Three fare brands in every booking class give one flight three times the prices

Sell three fare brands in each booking class and one flight carries three times as many prices. The brands do not need classes of their own, because the fare basis tells them apart. An economy cabin with 20 classes free for revenue then sells 60 prices; the full alphabet of 26 would give 78, but no airline has all 26 free.

The booking class controls the seats, and the fare basis names the fare

An airline controls what it sells through booking classes, each named by one letter. A reservation system and a GDS show which classes are open on a flight. The fare basis is a longer code on the filed fare. It usually starts with the booking class and then identifies the fare and its rules.

That allows several fares in one class. A published example for Frankfurt to Madrid shows the Lufthansa Group fares KEUCLSP8 (Classic) and KEUFLXP8 (Flex), both in booking class K at different prices. Delta's agency guidance says it uses the second character from the end of the fare basis to identify the branded product.

Not every booking class is free for revenue

IATA itself lists price points "limited to only ranges based on the 26 letters of the alphabet" among the limits of today's systems, and some of those letters are taken before pricing starts. Most airlines keep F, J, W and Y for first, business, premium economy and full-fare economy, because partners and GDS defaults read them that way. Awards, upgrades, groups, staff travel and partner bookings may hold classes as well. An airline with one cabin and no award programme has more classes free for its economy ladder than one with four cabins.

Dual inventory adds price points beyond the free classes: a fare can be made valid only while a second class is also open, so one class carries several prices that open and close at different moments. Our Pricing page describes how. The simulator on our Method page numbers its price points 1 to 26 for this reason; they are not 26 letters of one cabin.

Space the price points on a logarithmic scale

Many prices work best when each step is the same percentage, which means a logarithmic scale. On an invented long-haul return that runs from USD 500 net in promo to USD 3,500 in full economy, 26 price points sit about 8% apart. Six price points sit about 48% apart.

One-way fares need their own analysis. A one-way fare set without reference to the ladder can undercut it, for example when two one-ways cost less than the return. We run a one-way analysis tailored to each airline's routes to prevent this.

Brands in one booking class open and close together

Inventory control works on the booking class, so when class M closes, its Basic, Standard and Flex fares all close. If one brand has to close earlier, for example Basic on a peak flight, it needs a class of its own or a pricing system that can remove it from what is shown.

Brands also have to be filed so that agents can sell them. Travelport's help for agents describes a brand modifier that indicates the tier within a fare family. If the brand is not filed in a way the agent's system can show, the agent cannot offer it.

Analysts do not have to set a booking limit for every class

The usual objection to many price levels is the work, because a booking limit for every class on every flight is more than two analysts can manage. The answer is to control each flight with one number, the bid price: an estimate of what the next seat can still earn. Every fare above that number is open and every fare below it is closed. The number of price points then adds little work. The pricing simulator on our Method page works this way.

Count the free booking classes before you commit

• List every booking class in use today, including those used only by partners, groups or awards.
• Find the ones with no bookings in the past 12 months, and release them.
• Build one ladder of prices across the classes that remain, and add dual inventory where your system supports it.
• Decide which brands can share a class and which need one of their own.

What continuous pricing adds

Continuous pricing keeps the booking classes 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". It says the offer can be lower than or equal to the standard price and never higher. 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. An airline with a high share of GDS sales therefore starts with a full ladder of filed fares, which every channel can show. On the simulated flight on our Method page, where all figures are invented, 26 price points with three brands responding to bookings earn about 12% more than six price points with one fare set by date. Prices between the steps add less than half a point more, because at about 6% apart the steps are already small. With only six price points they add about 2.5%.