IATA has announced that YY Fares will be rescinded effective 31OCT 2018. Not that you’ll likely notice, as today they represent just 0.03% of tickets sold. But the history is fascinating.
The Chicago Convention established the framework for international civil aviation in 1944. However, provisions for market access, fares or rates were not included in the Convention.
The frameworks for these were left for national governments to negotiate in bilateral air service agreements (ASAs). As a standard practice in ASAs, governments relied on IATA to submit coordinated international fares and rates for approval. These multilateral, interlineable fares became known as IATA YY fares. They successfully enabled consumers to purchase a single ticket in a single currency, giving worldwide travel options on different airlines and luggage checked through to final destination.
Until the 1980’s, IATA says, most consumers travelled on YY fares. But competition, deregulation, alliances, liberalized bilateral agreements and developments in anti-trust regulation saw the use of YY fares gradually replaced by fares established by airlines.
In 2006 the coordination of YY fares was converted from physical meetings to a web-based system known as e-Tariffs to generate Flex fares, where a premium was added to the average of the highest carrier fares for the complete flexibility that the YY Fares offered. Intense competition among airlines, however, accelerated the decline in use of YY fares.
The decision to retire the fares was taken with a vote at the recent IATA Passenger Tariffs Conference. IATA says the move reflects the dramatic transformation that continues to take place in the distribution of airline products.
While YY Fares will shortly disappear, IATA support for the multilateral interline system will continue with global standard setting for fare construction, mileage principles and currency standards. As well, airlines and industry partners are working through IATA to focus on the transformation of airline distribution with programs such as New Distribution Capability (NDC) and ONE Order.
"YY fares were the backbone of global airfares for much of the last 70 years. But their relevance has been overtaken by changing markets and consumer demands,” said Alexandre de Juniac, IATA’s Director General and CEO.
The airline association says its focus is on enabling airlines to bring these innovations to consumers using modern day marketing and distribution capabilities.
“Travellers are gradually experiencing the benefits of NDC with a richer and more transparent shopping experience when using travel agents. And behind the scenes, the ONE Order initiative is modernizing industry processes so that airlines sell their product in a single seamless transaction," added de Juniac.