People have long complained about the complexity involved in airline fares, but you ain’t seen nothing yet. ATPCO — the industry’s fare clearinghouse and owner of Routehappy — had its annual Elevate event recently, and I found myself enjoying many of the panels. But it was one discussion with British Airways that I thought would translate well into a post. We’re going to dive into the weeds of Dual RBD. This is not for the faint of heart, but I’ll try to make it as clear as possible for those who really want to geek out in the details.
I suppose we should start with the basic concept of the RBD, or Reservation Booking Designator. That is more commonly known as a “bucket” in airline land. Airlines can traditionally have one selling fare per bucket for any particular origin and destination. (There can be many fares, but only the lowest that meets all rules will sell.) Each bucket has a letter assigned to it with F traditionally being full fare first class, J or C being full fare business class, and Y being full fare coach. In theory an airline can have up to 26 RBDs since there are 26 letters in the alphabet, but in reality that’s rarely the case.
Here is what a good example looks like in practice. This is the RBD line-up for United 2618 from Phoenix to Denver on May 10.
The first five buckets are first class, J/C/D/Z/P. I know I just said full first is usually in F, but awhile ago, United and others began coding their domestic first class with the same codes as international business class for consistency. That’s why it’s J. The rest in this line-up are coach with a special exception for the last one, N, which I’ll explain later.
The buckets are “nested” which means that the smaller buckets are a subset of the larger ones. This flight is operated by a 16-seat 737-800, and if we assume United isn’t going to overbook first class for this exercise, that means there are 16 seats available to sell in J. United’s plan could (very simply) look something like this.
It thinks it can only sell 2 seats in J, so that’s why it makes all but 2 seats available in C at a lower fare, holding two back for those high dollar, last minute travelers. Meanwhile, it thinks that out of the entire cabin, it can sell most at a higher fare, but 2 of the seats will not sell unless there’s an even lower fare, so those are put in the discount P bucket. If someone walks up tomorrow and inexplicably decides he wants 16 seats at the full J fare, he can buy that even though cheaper fares will be available. If seats are available, J is always available. It sounds somewhat simple, but it’s not. The fares that sell in each bucket can change regularly, and the allocations of number of seats available change as bookings build, but that’s not important for this exercise.
The point here is that airlines will file a variety of fares that are tied to each bucket, but there has historically only been one fare that can sell per bucket at any given time.
This has changed with the invention of fare families. Now you can have a basic fare, a regular fare, and a flexible fare, for example, that all sell in the same bucket. The hard part for the airlines is in figuring out exactly how to achieve this within the confines of an ancient system. The answer for Basic Economy was the use of Dual RBDs.
If this isn’t technical enough for you, feel free to peruse this ATPCO document from 2017 talking about the details of Dual RBD. The basic idea is that instead of having one bucket, fares need two buckets to determine if they can be sold.
For United, the official Basic Economy bucket is N. I told you we’d come back to this. That means that if N isn’t available, you can’t buy Basic Economy. If N is available, you can buy Basic Economy if a fare is offered, but that fare will vary depending upon the other bucket involved.
Here is a semi-real example that I’ve built out further. Let’s just say that United wants the Basic Economy fare to be $40 less than the regular fare.
Historically, to do this you’d need double the number of buckets. United has 14 fares for regular economy but it would then also need 14 for basic. That’s not feasible, nor does it make sense, because in this case, United wants the fares to move together and not act independently.
The way this has generally worked is that United leaves the N bucket open at all times if there are any seats available. Then, the system looks to see what the lowest regular coach bucket is available for sale. In the example up at the top, there are 2 seats in L left but nothing in K or G. In this case, that means basic will be $44 and regular will be $84. Once those two seats sell, the price will rise by a dollar into the T bucket and so on. Of course, if N has no availability, then basic will never sell regardless of what other buckets are open but that’s not common.
This is also a very popular plan when it comes to first class fares, but it uses a hybrid system. Most domestic airlines for short-haul flying will just base their first class fare on the selling coach fare, an upsell just as basic is a downsell. The difference is that to get that upsell fare, you have to find availability in Z or P, both buckets which are used regularly for fares that are filed directly in those buckets. That’s different than Basic Economy where there isn’t any fare filed exclusively for the N bucket.
All of this exists today, but what does it mean for the future? Well, if you take this further out, the airlines can use it to offer an incredible number of additional fares for sale, adding complexity to the purchase process in an unending quest to sell every ticket at each person’s max willingness to pay. The idea is that instead of tying an upgrade or basic fare to the regular coach fare, you can just tie buckets together within the same cabin to get many more options.
United has 14 coach buckets today. In the most basic sense, that means it can sell 14 fares on any given flight, and when you include that extra Basic bucket, that adds another 14. But let’s say United were to drop the number of coach buckets down to 8 and then has another 8 it uses as secondary buckets. That means United could go from having 14 fares for sale today (or 28 with basic) up to 8*8 = 64 + the original 14, or 78 total. That’s quite the change, and it doesn’t even use the full complement of buckets.
For airlines, this could be an interesting tool. The holy grail has always been trying to get pricing very personalized to cater to each individual traveler. That’s nearly impossible to do, but that won’t stop them from trying to get closer. This will allow more pricepoints in the market. For travelers, well, airline pricing is already opaque, and that’s always been a point of frustration. This would just make it more complicated if it were to happen, but whether travelers could be confused anymore than they already are is questionable anyway.