What is the difference between booking class and service class?

Passengers often confuse booking class and service class and are genuinely puzzled why their neighbor paid much less for a ticket, even though you're flying next to each other? The fact is, on an airplane there are service classes and booking classes. Service classes include:

• first class (on intercontinental flights)
• business class
• economy class (some airlines have introduced another booking class "economy+", "enhanced economy", which is something in between economy and business class.)

They differ in comfort, service, and price. Booking booking classes are designated by letters of the Latin alphabet: O Q N T V H K M B Y. Each letter denotes specific fare conditions. As a rule, they are distributed as follows: First Class:

• R - supersonic class (suite) - exists only on Airbus A380 aircraft
• P - premium (enhanced) first class
• F - first class
• A - discounted first class

Business Class:

• J - premium business class
• C - business class
• D - discounted business class
• Z - discounted business class
• I - discounted business class

Economy Class:

• W - premium economy class
• S - economy class
• Y - economy class
• B - discounted economy class
• H - discounted economy class
• K - discounted economy class
• L - discounted economy class
• M - discounted tourist class
• N - discounted economy class
• Q - discounted economy class
• T - discounted economy class
• V - discounted economy class (youth fare)
• X - economy class, group fare - reservation under specific conditions
• E - economy class, shuttle fare (used only on charters) - reservation not allowed, seats confirmed upon check-in
• U - economy class, shuttle fare - no reservation required, seats guaranteed
• G - economy class, group fare - reservation under specific conditions
• O - discounted economy class

The booking class determines the ticket usage conditions (fare rules). There are no strict distinctions or clear definitions of what each class includes. Each airline develops individual fares and booking classes. For one, class Y might mean the most expensive economy class ticket, with the possibility to change or refund without penalties, while for another, it will be a ticket with restrictions. The lower the airfare, the lower the booking class, and the stricter the fare rules. This is why your neighbor's ticket might be twice as cheap, but they won't be able to refund or change it, as it's most likely a "non-refundable" ticket.