All Change in Categories 16, 31 & 33 at BA
It is encouraging to see airlines return to old-school pricing methods
ATPCO fare category 16 is not an ideal ice breaker at a party. It sounds like it should be one of the dullest things in the whole of aviation. But for your favourite airline revenue economist, it is one of the most interesting.
ATPCO is the Airline Tariff Publishing Company. Way back in the 60s or the 70s some clever people got together and defined a list of 33 types of rule which together determine whether or not a particular fare is valid for ticketing a prospective passenger’s itinerary. Think of it as revenue management by rule rather than algorithm.
Confusingly there is no Category 24 or 34, so the first 33 are numbered 1 to 35. There is also a Category 50 for “other conditions”. Presumably they left space in between to add more.
Some of the categories are simple. Category 2 tells us the days when travel is permitted, such as Mondays in February. Category 3 covers seasonality, like whether or not the fare is valid in the summer holidays.
Others are a bit more technical. Category 5 states how far in advance of travel a fare must be booked by (the Advance Purchase) and Category 6 tells travellers how long they must stay for (the Minimum Stay).
Some go a bit crazy. Category 25, the highly technical “fare by rule”, allows airlines to combine all sorts of other categories and even different fares to calculate a completely new fare when specific criteria are met.
Category 16and it’s more modern associates 31 and 33, the subject of this article, cover how much it costs for passengers to change or cancel their ticket when changes are made. In the context of a passenger ticket as a contract (see article), this is the penalties section. Categories 31 and 33 (CAT31/33) handle the charges for automated changes, which is how the bulk of things are done now. CAT16 is for manual changes.
The default position is that unless CAT31/33 says otherwise, every ticket may be refunded or changed free of charge. Which is all well and good in a world of small aircraft and passengers walking up to a counter to buy their ticket. It is much less suitable to mass market, revenue managed travel.
Unsurprisingly, airlines are not keen on free changes and refunds. Some passengers may speculatively book up tickets and hold many seats before deciding which, if any, to use.
We had this problem at Qatar Airways. Wealthy Qatari travellers had no issue putting money down for business class tickets on three or four different flights the next weekend and cancelling for free at the last minute when they decided where they actually wanted to go.
In the mean time, other passengers are unable to buy seats and when the original bookers cancel they go empty, or spoiled as we say in the trade (see article).
In the 25 or so years that I have been following London-based British Airways (BA) I have been interested to see how their approach to CAT31/33 on flights ex-London has evolved. It is summarised in the table below.
In reality things were a bit more complex and much more complicated if you took a global rather than an ex-UK view. But the table makes the key points for the UK market. From 2000 to 2020 BA introduced the following changes:
1. Element of flexibility introduced to all First fares
2. New fare class R introduced in Club World (original flat bed seat pictured at the top of this article)
3. £300 penalty across all mid-tier Club World fares
4. Flexibility introduced to entry level Club World fares post-COVID
5. Fare levels at the top end increased dramatically in real terms, while fares at the bottom end remained stable in nominal terms and fell in real terms
6. BA introduced dual-inventory validation for First, charging whatever the prevailing Club World fare was plus £1,000-ish.
The particularly harsh I class conditions (no changes, no refunds) were specific to the UK market. Prosperous London-based travellers buying Club World tickets for their holidays or advance booked business trips accepted them.
BA also used the I class fares and associated CAT31/33 conditions as a corporate sales negotiation mechanic.
Their entry point in negotiations with the corporates was that they could have an I class level fare that would book in a high class like J or C, but once purchased it would also be no changes, no refunds. Of course negotiations moved from there, but it was a good starting point.
Alongside the changes to CAT31/33, fare levels also adjusted roughly as shown in the right hand part of the table.
In the 2000 generation fares it was plausible that if a passenger was considering paying £2,000 for a ticket with no changes and no refunds, they might pay an extra £1,000 for some flexibility or an extra £2,000 for full flexibility.
BA made a big deal of their “fully flexible” tickets that would allow business travellers to come home early or late depending on what time their meeting finished.
In today’s world of £2,000 entry fares and £9,000 fully flexible fares for most travel buyers that choice no longer seems realistic. The increase in top level fares is wayward because they reflect higher base levels for corporate discounts rather than prices that are actually attractive to the market.
Even an upsell within the 2020 generation fares from £2,000 to £6,000 for ticket flexibility does not seem likely. Unsurprisingly, BA no longer speaks much about “fully flexible” tickets in it’s advertising.
At my first employer after my Masters degree, the telecoms consultancy Analysys Mason, back in 2005-7 the Principal Consultants loved buying “fully flexible” J class tickets to whizz around the globe and the Clients were happy to pay. I would be surprised if this is true to the same extent today.
Just in the last couple of months BA have changed things around. They copied Virgin Atlantic, who have had a new model in place for a few years. Here is what BA has now on a flight to New York leaving on Mon-3-Mar-2025. These fares are for the outbound portion of the journey only, so the total return price will be higher.
Notice how even though this is a clearly a relatively high fare level at £4,178+, different levels of flexibility are offered in CAT31/33-type fare conditions, probably filed through NDC (see article), the multi-billion Dollar initiative that eats cash, moves forward at glacial speed and confuses everybody.
£4,178: £300 for changes, no refunds
£4,278: £300 for changes, £300 for refunds
£4,378: no change fee (plus fare difference), no refund fee
£6,134: fully flexible
Note that although The £4,378 fare has no charges for changes or refunds, it is not truly fully flexible in the sense that a fare difference applies if and when a change is made.
Passengers buying the J class fully flexible fare can genuinely change their ticket for free because J is the highest fare. Or at least they can change it for free until BA does one of their periodic increases in the J class fare and for most people buying a fully flexible fare a long time in advance is not good value for money.
What BA and Virgin Atlantic have done is move the concept of “fare families” from being between the fare classes to being within a fare class. In the 2000 generation of fares, J was fully flexible, C was a “semi-flexible saver” and both D and I were “fixed saver”. In the 2025 generation, fully flexible, semi-flexible and fixed exist in each booking class.
I think that these changes are sensible and exciting.
Essentially airlines like BA and Virgin Atlantic are moving into the insurance market by selling fares like this. Many passengers will like the idea of paying an extra £100 or £200 for the flexibility offered, which will be a nice little earner for the airline even when the spoilage costs of a few cancellations are taken into account.
Not many will spend thousands more.
All in all, this model is sensible and I would recommend it to most airlines operating long-haul flights.
Although I have written mostly about long-haul products in this article, CAT31/33-type product design is important in the short-haul market too.
Vibrant easyJet allows members of it’s easyJet Plus programme to make a free of charge same-day change to any flight leaving earlier than a passenger’s original itinerary.
BA has a similar offer in Club Europe, their short-haul business class. I have used this successfully several times when the most convenient flights were a lot more expensive.
Conclusion
In a world where the airline revenue ecosystem has been talking mainly about either doing revenue management through ever more advanced inventory optimisation or nebulous NDC, it is encouraging to see airlines like BA and Virgin Atlantic thinking more about old-school pricing. I think they are on the right track.
Book review – a British Airways-themed cookery book!
Back when I was at Qatar Airways I used to fly home for the holidays on BA. Staff travel was not for me as I value firm reservations and my niggardly employer refused to allow me to fly in business class.
Instead I used BA Miles, the loyalty currency given out by BA before Avios, to buy World Traveller Plus (Premium Economy) tickets and upgrade to Club World (Business Class). Despite buying many such tickets, to this day I have still never actually flown in Premium Economy on any airline…
For a few hundred Pounds more than a standby rebate ticket, I got firm travel in business class. The best bit was that each time I earned back enough BA Miles on the base World Traveller Plus ticket to upgrade again next time. Sadly that loophole is now closed.
Over five years I spent 190k BA Miles and “saved” £10,438 ($13,147), an impressive return of 5.49p per mile.
The flight back to the sand pit was perfectly timed for a nice long lunch, departing between 10am and 11am with the service delivered two hours later.
Many BA flights are also perfectly timed for a nice long, late lunch. According to OAG schedule data (see article), 15.1% of daily Club World seats (668 seats) leaving London Heathrow are scheduled in the 10am to 11.29am departures bank that see the service delivered slap bang in the middle of lunch time.
A further 2,961 (67.2%) of daily Club World seats depart Heathrow between 11.30am and 9pm. These flights last between six and thirteen hours, and are either too early to sleep or too long not to eat.
So no wonder food is important to British Airways. Which is why Captain Al Bridger wrote “Flavour of Flight: The Food and Drink of British Airways”.
This glorious little book takes us readers through the airline’s menus from 1919 to the present day. And even better, Captain Al shows us his recipes for some of the best grub on offer.
As well as the recipes there are plenty of entertaining pictures, although I have seen many before. The famous image of the Boeing 747 and all the catering that goes into is on page 84. I particularly liked the picture of a lady being served breakfast in bed on a flying boat in the 1930s (page 24).
Captain Al’s text is a bit too saccharine (BOOM! BOOM!!) for my taste. British Airways may well intend that their catering gives “a truly fantastic experience with the feel of a modern hotel and restaurant” (page 94).
The reality is that airline catering when done well can be quite good. To suggest that it is restaurant quality seems a bit over the top.
Captain Al is pleased to mention how BA introduced pre-order meals in 2014 and Marks & Spencer buy-on-board (M&S BOB) in 2017. These were indeed solid achievements.
But in a book published in 2024 he does not mention that pre-order meals were removed thanks to Covid and four years later had still not come back. Meanwhile I am looking forward to pre-ordering my main course on my Virgin Atlantic flight to San Francisco in a few weeks.
The M&S BOB was botched as in practice BA under-catered to save money in cost account while losing the chance to earn money in ancillary revenue account. Daft.
However BA is paying the piper so it seems fair that BA calls the tune. I took the text with a pinch of salt (BOOM! BOOM!!) and enjoyed the rest of the book, especially the pictures and the recipes.
What I really found incredible was how my own flight experiences on the middle east routes now form part of BA’s history.
Captain Al says he has fond memories of the warm cookies on BA’s sleeper services. I do too!
The “Height Cuisine” concept from 2012 is shown on page 102. It was all about choosing ingredients that are high in umami, which apparently enhances the taste well at altitude.
I was pleased to see the old cut-apple menu insert pictured on page 102. I had this in several menus. I was also interested to see a portion of a Club World menu shown right on page 1 that was like the one on my first ever flight in this cabin, back in 1996.
Liam Tomlin’s roast crown of chicken from around 2008 and 2009 was in my view the best Club World main course I ever experienced. It had thick brown gravy, crispy skin and a decent potato rosti on the side. Sadly it’s recipe is not included.
However I did have the chance to eat on-board two recipes featured near the end.
When I flew from Tokyo to London (paid with Avios with a free airport upgrade to First for the win!) I enjoyed the steak with café de paris butter featured on page 110.
And when I flew from Heathrow to Philadelphia (also paid for with Avios) I loved the crepe suzette on page 120.
Both are pictured below.
When I fly with Virgin Atlantic in a few weeks I will probably eat the curry. Heathrow is close to the vibrant ex-subcontinent community of Southall so the catering factories have access to many talented Indian chefs. They know how to make a good curry and spicy flavours work well at altitude.
As Virgin Atlantic themselves would say, nom nom nom!
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Read more about the wonderful world of fares on Airline Revenue Economics
Dynamic Pricing Made Simple – Part 1
Dynamic Pricing Made Simple – Part 2
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