Prepare for Descent

Something big has happened to international air travel. It just got cheaper.

The rules for international airfares have changed -- in your favor. Knowing about the changes and taking advantage of them will save your business money.

The travel industry isn't talking about this much. But it’s something every international traveler should be aware of. The International Air Transportation Association (IATA) is the international Switzerland-based body that sets regulations, standards, processes, and guidelines for the world's airlines. IATA sets the standard fare construction rules used when putting together multi-leg fares. Many rules have developed over the decades, the purpose of most being to organize and protect airline revenue. Now IATA has started simplifying those rules and has launched a "Simplifying The Business" initiative late last year.

What happened?

The big change came January 15 with the elimination of the IISI codes -- the rules that stopped you from buying the same air travel cheaper from another country. Say you were flying from Dallas to Singapore and booking in United States. The same ticket might cost less if you bought it in Singapore or elsewhere. But the rules stopped you. Booking in the US meant you had to pay prices set for the US. Not anymore. You're now free to find the cheapest one-way fares wherever sold and put them together.

What it means for you

In principle, from now on, any time you book an international fare, your in-house travel agent (or whoever books your transportation) could look for and buy the cheapest price for each segment offered anywhere. A broad search across many markets often won't be practicable, though. And there might be an issue with ticket delivery. But, in many cases, a quick search of fare levels -- especially in destination countries -- could yield good results.

Why it happened

The airline industry sees a future of cheaper direct distribution via the Internet. Till recently, travel agents had become the distribution channel for regulated airlines. However, the commissions paid to agents made it an expensive means of distribution. Now, fare deregulation and the Internet have given airlines a strong incentive to sell direct to the traveler. But the complicated fare rules applied to international airfares have limited the possibilities there. Someone, such as an agent trained in those fare rules, has been needed to put together multi-leg international fares (which explains why your online booking tools don't do complicated international travel).

Are We There Yet?

Difficulties still remain. There are still hurdles to cross-border fare shopping, such as e-tickets across all international routes. And you don't yet quite have online booking tools that search for the lowest international fares sold anywhere. But hopefully someday. Meanwhile, you now have the opportunity to access lower prices available in other countries for the same air travel -- as long as you or your travel agent go looking for them.

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