Proration

The Problem Proration Solves

When a passenger buys a single through-fare covering flights on more than one airline — for example, Airline A to a hub and Airline B onward — the ticketing airline collects one combined payment, but two or more airlines actually performed the transportation. Proration is the method used to split that revenue fairly between the carriers involved, based on each airline's share of the total distance, service level, or negotiated value of the journey.

Multilateral Proration

Most interline proration follows IATA's multilateral framework, documented in the Prorate Manual – Passenger (PMP) and governed by the Multilateral Prorate Agreement – Passenger (MPA-P). This system applies standardized, mileage- and distance-based (or, for some markets, value-based) formulas to calculate each carrier's share of a through-fare, so that any two IATA-member airlines with an interline agreement can settle revenue without negotiating bespoke terms for every route combination. IATA maintains an equivalent framework for cargo, the Prorate Manual – Cargo (PMC).

Special Prorate Agreements (SPA)

Airlines with significant interline or codeshare traffic on a particular route pair often replace the standard multilateral formula with a bilateral Special Prorate Agreement (SPA). An SPA lets two carriers negotiate custom revenue splits — sometimes more favorable to one partner than the standard IATA rate — to reflect the actual commercial value each airline brings, such as a carrier controlling scarce capacity on a constrained route. SPAs are common between codeshare and alliance partners and are typically implemented using fare-distribution tools such as ATPCO's rate, mileage, and prorate data.

Relationship to Interline and Codeshare

Proration only matters where a passenger's journey crosses more than one operating carrier under a single fare — the arrangements that make this possible (interline agreements, codeshares, alliance partnerships) are the precondition; proration is the mechanism that settles the money once that journey is flown. Disputes over prorated amounts are a common source of friction in interline relationships, which is part of why standardized multilateral formulas and negotiated SPAs both exist — to reduce ambiguity before a dispute arises.

Currency and Settlement

Prorated interline amounts are typically calculated and billed through the same clearing mechanisms used for other interline settlement, such as the IATA Clearing House, with defined currency-conversion rules applied so multi-currency itineraries are handled consistently between carriers.