New Ticket Agreement Is in Effect

Airlines and travel agents alike are getting used to a new worldwide currency and ticketing system launched by the International Air Transport Assn. (IATA).

But the new method of calculating international air tickets was not begun without controversy, and critics are giving the U.S. Department of Transportation, which has taken its share of knocks in the past, high marks for killing a much-contested directional fare rule that was part of the new system.

This provision in the new program, which went into effect July 1, called for travelers to pay the highest one-way fare for travel between two foreign points if the ticket was sold and issued outside the country where the flight would begin, regardless of which direction the flight was going.

Flights in the Western Hemisphere were excluded, and the rule also did not cover flights that were part of an itinerary to or from the United States.

The reason for this policy was to protect the country with a stronger currency from having its fares undercut by one using a weaker currency.

A travel agent in the United States selling you a flight from Hong Kong to Tokyo would not have been able to give you the same fare you could have gotten if you had bought the ticket in Hong Kong. You would have been charged as if the flight originated in Tokyo, which would be more costly.

Travel agents, understandably, were not overjoyed at this development, which could have induced some travelers to wait until they were overseas to buy their tickets.

The Department of Transportation, which at first approved the new IATA system that included this provision, reviewed the matter and nullified this aspect of the rule, saying it would impose unfair penalties on American consumers on the basis of where they bought their tickets.

Meanwhile, look at your international air tickets and you should find a new code to show whether or not the ticket was sold and issued inside or outside the United States.

The new IATA rules use a different currency conversion system for international tickets; ticket prices are based on the currency of the country where the ticket is bought. The airlines had based fares around two basic currencies, the U.S. dollar for fares in the Western Hemisphere and sterling for Eastern Hemisphere tariffs.

The system worked as long as currency fluctuations between nations were relatively minimal. But monetary upheavals grew and the system became increasingly complex and subject to fraudulent currency manipulations. IATA devised this new method, which is expected to simplify the system and help prevent abuses.

A Los Angeles-Rome-Sardinia-Rome-Los Angeles flight itinerary would call for the Los Angeles-Rome legs to be in dollars, but the Rome-Sardinia-Rome legs in Italian lira (converted to a dollar rate at the current rate of exchange).

Another possible wrinkle in this new system comes from the fact that the bankers’ rate of exchange is set quarterly, because of currency fluctuations.

For example, a flight beginning in the United States with the ticket both sold and issued here would be coded “SITI”--which stands for Sold Inside and Ticketed Inside the country of origin.

A “SOTO” notation on a ticket issued in the United States would mean a ticket sold outside the country where the flight would originate (like a Paris-Athens routing).

Coding of this type is expected to hamper the practice of cross-border ticketing when tickets are bought outside the country in which a flight originates.

In this type of ticketing, considered fraudulent by the IATA, travelers have multi-destination tickets written as if they originated in a country with a weak currency to get a lower fare. However, the passenger only uses intermediate flights. The first and last coupons might be sold, turned in for refunds or simply thrown away.

An example would be Warsaw-Frankfurt-Los Angeles-Frankfurt-Warsaw, where the passenger has the ticket written from the Polish capital but really means to fly from Frankfurt.

If travelers at Frankfurt--or any other airport--check in when they should be only in transit, the airline could ask for proof that they flew from Warsaw or London (or the supposed airport of origin) to Frankfurt.

Such proof could be a visa stamp, baggage receipt or baggage entry on the ticket. If a passenger shows up with luggage, it’s a tip-off that he or she is not on a connecting flight.

Passengers lacking such proof might then be asked to pay the difference in the fare.

The new IATA system still permits you to buy two one-way fares. Using a business-class fare on a Los Angeles-Frankfurt-Athens routing costs $3,822 round trip.

If you bought the westbound flight one way, it would cost $1,911. But if you bought the return Athens-Frankfurt-LAX flight in the United States, based on the value of the Greek drachma versus the dollar, this flight would cost $1,729, a saving of $182.

The new rules might also permit passengers to save money when a ticket is issued in the United States but prepaid for pickup at an overseas destination.

These code changes, as well as other symbols and data, have been put into the computerized reservation systems used by travel agents.

The impact of the new system on prices is expected to be felt primarily by people traveling on regular tickets as opposed to discount fares. Regular fares allow more latitude in creating the ticket, while promotional rates are usually more restricted.

The new rules could also mean more tie-ins between U.S. travel agents and foreign travel agencies to facilitate the purchase of less expensive air tickets overseas.

“Most travel agencies still don’t fully understand these changes, but they’re working closely with airlines to find the best ways to ticket their clients,” said Martha Scott of Glendale Travel.

Another aspect of the new fare system is printing the rate of exchange used on the day the ticket is issued. Thus, if you ask for a refund, you’ll get back precisely what you paid, not the rate of exchange at the time your refund is made.