What Net fare means
Net fares turn the agency into a reseller. Instead of selling a fixed published fare and receiving commission, the agency buys at a wholesale level and decides what to charge. Net fares are almost always a kind of private fare, because only contracted sellers may access them.
In ATPCO filing, net fares are usually handled through Category 35 Negotiated Fare Restrictions. Travelport's documentation describes three possible levels for a negotiated fare: the net amount remitted to the carrier, the selling fare the passenger pays the agency, and the gross or ticketed fare shown in the base fare box. The airline may file a net amount only, or set selling amounts or ranges that the agency must respect.
Because the figure printed on the ticket and the amount remitted can differ, net fares need careful ticketing. Airlines specify how the fare box should appear (for example a bulk or IT display that hides the amount), what tour code or commercial agreement reference to use, and how the sale is reported through BSP or ARC. Getting this wrong is a common cause of ADMs.
How Net fare works
A net fare moves from a negotiated wholesale amount to a marked-up selling price and a correctly reported ticket.
- AgreementThe airline agrees net fare levels with a consolidator or agency for defined routes, dates and conditions.
- Filing and securityThe airline files the fares with Category 35 data, naming which agency locations can view, sell and ticket them.
- MarkupThe seller applies its markup, either within limits set by the airline or freely if no selling amount is filed.
- TicketingThe ticket is issued with the airline's required fare box treatment, tour code and commission settings.
- SettlementThe agency remits the net amount, plus taxes and charges, to the airline and keeps the markup as its margin.
Net fare in practice
Illustrative. A consolidator in Dubai holds a net fare of AED 1,500 for an economy return to Karachi. It adds AED 120 for its sub-agents, who see a selling fare of AED 1,620 plus taxes and surcharges. A sub-agent then adds its own AED 80 service charge before quoting the traveller. The airline receives the AED 1,500 net amount, while each intermediary keeps its share. The ticket may show an IT or BT indicator in the fare box instead of the amount, as the agreement requires.
Who uses it
Advantages and limitations
Advantages
- Sellers control their own margin instead of depending on airline commission.
- Airlines can sell into price-sensitive markets without lowering public fares.
- Markup can be adjusted by channel, customer or season to stay competitive.
Limitations
- Ticketing and reporting rules are stricter, and mistakes can lead to ADMs.
- Net fares are usually restricted to contracted sellers and may carry tight conditions.
- Different filing and display methods across systems complicate automated markup and reissue.
Frequently asked questions about Net fare
Is a net fare commissionable?
Usually not. The agency's income comes from the markup it adds above the net amount. Some agreements still set a commission field for reporting purposes, so agencies should follow the ticketing instructions given with each net fare contract.
What is the difference between a net fare and a selling fare?
The net fare is what the airline accepts from the seller. The selling fare is what the passenger pays the seller. The gap between the two is the markup, and some airlines file a fixed selling amount or a permitted range.
How do travel agents add a markup to a net fare?
In a GDS or booking platform, markup rules are applied to the net amount by percentage or fixed value, often by airline, route or customer type. The system then shows the selling fare and stores the net amount for ticketing and settlement.
Why does a net fare ticket show IT or BT instead of a price?
Airlines often require the fare amount to be hidden on net fare tickets, so the traveller does not see the wholesale price. IT (inclusive tour) and BT (bulk ticket) are common fare box indicators used for this.
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