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Airfare Calculation Components

The document discusses the different components that make up an airline ticket price. It explains that the price is comprised of: 1) The airline's base fare, which is the pre-tax price and what discounts usually apply to. 2) Government taxes, fees, and charges imposed to raise funds. 3) Additional service fees charged by airlines, like baggage or fuel surcharges, that are included in the base fare or tax sections. Overall airline ticket prices can vary based on airline, availability, demand, and competition between carriers.

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980 views10 pages

Airfare Calculation Components

The document discusses the different components that make up an airline ticket price. It explains that the price is comprised of: 1) The airline's base fare, which is the pre-tax price and what discounts usually apply to. 2) Government taxes, fees, and charges imposed to raise funds. 3) Additional service fees charged by airlines, like baggage or fuel surcharges, that are included in the base fare or tax sections. Overall airline ticket prices can vary based on airline, availability, demand, and competition between carriers.

Uploaded by

ara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction: Introduces the topic of airline fare calculation and presenter information.
  • Airfare Pricing: Explains how airlines price tickets to maximize profits and the importance of seasonal demand.
  • Components of Airfare: Outlines the main components that comprise the cost of an airline ticket, including base fare, taxes, and possible service fees.
  • Base Fares: Discusses the airline carrier's base fare and how discounts are typically applied to this component.
  • Government Taxes and Fees: Explains government-imposed taxes and fees that contribute to the overall cost of airline tickets.
  • Aviation Charges: Details specific aviation-related charges and their purposes, including examples like passenger facility charges.
  • Carrier's Service Fees: Outlines additional fees imposed by the carrier not typically included in the base fare.
  • Service Fees: Describes possible service fees levied by carriers, noting variations depending on revenue usage.
  • Ticket Pricing Factors: Covers factors contributing to airline ticket price variations, such as seat availability and airline competition.
  • Conclusion: Concludes the presentation and thanks the audience for their attention.

Components of Airline Far

e Calculation
Presented by:
Ara Mae Parinas (5906723)
AIRFARES

 All airlines price each and every ticket to maximize


profits. 
 One way to maximize profits is by gauging seasona
l demand and this happens in all businesses.
Different Components of the Air Fare

 The actual cost of an airline ticket comprise of these


components:

 The airline carrier’s base fare


 Government taxes, fees and charges
 The carrier’s imposed service fees (optional)
The Airline Carrier's Base Fares

A base fare is the price of airline ticket before fees, t


axes, and any surcharges are added.

When a discount is announced, it is usually on the base fare


. 
Government Taxes, Fees and Charges (TF
C)

Government taxes are imposed for raising revenue for t


he country's general treasury used for general public se
rvices.
 Examples:
 Arrival or Departure Taxes
 Value Added Tax
 Transportation Tax
 Passenger Tax
 Etc.
Government Taxes, Fees and Charges (TF
C)

Charges are imposed for raising revenue for specific avi


ation related facilities or services.

 Examples:
 Passenger Facility Charge
 Safety and Security Charge
 International Aeronautical Dev
elopment Charge 
 Etc.
Government Taxes, Fees and Charges (TF
C)

Fees can be used instead of either taxes or charges dep


ending on what the revenue is used for.

 Example/s:
 Passenger Service Fee
  User Development Fee (UDF)
(per departing  passenger, a charge levied b
y airport operator on passengers to recover
the investment made on the development o
f the airport)
 Etc.
The Carrier’s Imposed Service Fees

Some of these fees are not


as obvious as they are incl  Example/s:
uded in the base fare amo  Fuel Surcharge
unts. They are usually writt  Insurance Surcharge
en as a surcharge in the far  Security Surcharge
e calculation box of the tic  Miscellaneous Surcharge
ket while other Service Ch  baggage fees, meal fees, airlin
arges appear in the tax bo e lounges, early bird check in,
xes along with the Govern movies, seat selection and trav
ment taxes.  el insurance etc.
AIRFARES

 The cost of an airline ticket varies from airline to airl


ine.
 Prices change due to seat availability and demand.
 Airline competition is also an important factor contr
ibuting to the ticket price.
End of Presentation
Thank you for your attention.

Components of Airline Far e Calculation Presented by: Ara Mae Parinas (5906723)
All airlines price each and every ticket to maximize profits.  One way to maximize profits is by gauging seasona l demand
The actual cost of an airline ticket comprise of these components: The airline carrier’s base fare Government taxes, fees
The Airline Carrier's Base Fares A base fare is the price of airline ticket before fees, t axes, and any surcharges are added
Government Taxes, Fees and Charges (TF C) Government taxes are imposed for raising revenue for t he country's general treasur
Government Taxes, Fees and Charges (TF C) Charges are imposed for raising revenue for specific avi ation related facilities o
Government Taxes, Fees and Charges (TF C) Fees can be used instead of either taxes or charges dep ending on what the revenue
The Carrier’s Imposed Service Fees Some of these fees are not as obvious as they are incl uded in the base fare amo unts. Th
The cost of an airline ticket varies from airline to airl ine. Prices change due to seat availability and demand. Airline
Thank you for your attention. End of Presentation

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