Why are One-Way Fares So Expensive Internationally? (Ask Cranky)

It’s time for another Ask Cranky post, and this one focuses on my favorite topic: airline pricing. (Note: I’ve cleaned up the language in the email a bit for clarity.)

I have a question for your Ask Cranky section that I would love for you to take a look at. My question is specific to the price differences of one-way fares versus roundtrips on international itineraries. To help demonstrate, I’ll provide an example with some screenshots.

As you can see in the first screenshot, the roundtrip cost of London to Miami on Virgin Atlantic is $823. In the second screenshot, a one-way from London to Miami on the same outbound flight as the quoted roundtrip is $2,306. That’s a huge difference.

I do understand that it is likely that the one-way is a flex ticket and in a different fare bucket than what the roundtrip is based on. I just can’t understand why airlines are not offering the one-way as a normal fare. I have found similar results with international roundtrips vs. one-ways on more Google searches with several airlines (American, British Airways, United, Air Canada, Delta, Aer Lingus), including those originating in the US and those originating in European gateways other than London. Only a handful, like TAP, Aeroflot and Turkish, offered prices that could be deemed reasonable for the one-way. Comparably, on domestic flights, I find that 9 out of 10 times a one-way will price at or around half of the comparable roundtrip.

I am hoping that you can shed some light on why this is the case for international one-ways, and specifically why airlines fail to offer “appropriate” fares to those looking to make only a one-way booking. Thank you for all the interesting content you provide to us readers.

Sincerely,
Jeremy

You are not alone in wondering about this, Jeremy, but can I hazard a guess to say that you’re on the younger side? The reason I ask is because this used to be far more commonplace even in domestic markets, but it has started to fade away over time thanks to competitive pressure. But I suppose I should back up.

After deregulation, the airlines really poured gas on the fire in trying to improve revenue management. What they realized was that they liked all these full-fare-paying passengers that filled about half their airplanes, but they also knew that once that airplane pushed back from the gate, an empty seat was a permanent lost opportunity. How could they keep those business travelers paying full fare but then sprinkle in lower-paying leisure travelers to fill those empty seats? They created fences.

Or not. Of course, these aren’t real fences that keep the leisure travelers separate from the business travelers. Instead, these are artificial fences that force each category to buy their own respective fares. The primary fences that were used were somewhat intuitive. Business travelers tended to book at the last minute, fly during the week, make changes and get refunds as plans changed, and mix and match airlines to get the option with the best schedule. So, to get a low fare, the airlines instituted long advance-purchase requirements, required a roundtrip purchase with a Saturday-night stay, and made tickets non-refundable. Those rules would keep business travelers paying high fares while leisure travelers who didn’t mind the restrictions could fly for less.

The plan was a smashing success. Airlines filled a lot more empty seats, and they made a ton more money on each flight. This became the norm in the 1980s and 1990s, but business travelers were naturally grumpy about this. After all, they were now flying on airplanes that were more full (and not with respectable business travelers) yet they were still paying a ton of money. (The companies themselves grumbled about the latter.) Something was bound to give.

And “give” it did with the advent of low-cost carriers. Revenue management techniques could be used to thwart some of these upstarts (that killed People Express), but it wouldn’t work for all. Little Southwest stabilized and grew rapidly after its rocky start in the 1970s. With it, the airline brought low, one-way fares that travelers loved. For awhile, the legacy airlines tried to resist matching those fares, but eventually they realized (some far too late), that they couldn’t or they’d lose too much traffic. The floodgates opened, and now there is so much low-cost competition within the US (and elsewhere) that one-way pricing has become the norm. Now it’s rare to find a roundtrip fare that’s more than double the one-way domestically, but when you do, it’s not usually to the extreme you see on long-haul flights.

For long-haul, the same scenario is replaying a couple decade later. Low-cost carriers never successfully penetrated the long-haul world during this time. The dynamics were such that it was just too challenging, so the old fare structure stood. It’s only in recent years that we’ve seen more airlines try to make the low-fare, long-haul project work. That’s why you now see low one-way pricing on airlines like Norwegian. Newly-converted TAP Air Portugal is now using the same model as a way to make people consider accepting a Lisbon stop. Airlines like Aer Lingus and Aeroflot aren’t really low-cost airlines, but they are trying to exploit an opportunity the same way as TAP. Nobody wants to add a connection in Dublin or, even worse, Moscow, when flying between the US and Europe. Offering low one-way fares is a way to steal that traffic when a price-sensitive consumer is interested.

So, what you’ve seen, Jeremy, is a dinosaur. If someone wants to fly one way to Florida, then Virgin Atlantic (with Delta) is betting that it’s a less price-sensitive business traveler. Eventually, however, that meteor is going to hit the Earth and those dinosaurs will disappear. On shorter routes, airlines have already adapted, and they’ve been able to use more sophisticated revenue management techniques to allow them to still get premiums without having those fixed, artificial fences in place. They’re going to have to do the same on the Atlantic, but until that time, they’ll keep extracting everything they can until it’s no longer an option.

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45 Comments on "Why are One-Way Fares So Expensive Internationally? (Ask Cranky)"

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Miss Informed
Guest

If the one-way fare is so high, why not buy a roundtrip and then cancel the return? Seems an obvious solution. Or do the airlines have gnomes who track you down and pummel you with soft pillows if you do that?

anli
Member

because the ticket is non-refundable and you can’t cancel much. Or the refund pricing works by only by using the price at the time of the refund (which is even higher) and you end up owning them. Remember, they have an army of bean counters or genies (depending on your point of view) thinking these details.

In theory they might refund you half the taxes though.

grichard
Guest

I don’t think the original comment was implying that a refund was expected. If the one way is more expensive than the round trip, s/he is suggesting just buying the round trip and ignoring the return leg.

Bgriff
Member

Which does happen occasionally and can be a smart thing to do. Though airlines have also figured that out, so often the one-way is like 80% of the cost of the roundtrip — just low enough that throwing away the return leg doesn’t make sense.

Oliver
Guest

But the round trip, while cheaper than the inflated one-way, is still twice of what the one way “should” cost.

Dan
Guest

But what “should” a flight cost? This isn’t pedantic. The airline business is one of high fixed costs and very low marginal costs. What can be profitable at the margin may not contribute much to the fixed costs.

It may be fair to say that “nobody” pays their fair share… people either pay more than they should, or less than they should. One may say that the more expensive fares subsidize the lower fares, but if the lower fares weren’t there, the higher fares would have to be even higher.

Airline pricing is complicated.

Kilroy
Guest
I look forward to the day when most international one-way fares are half the round trip fares. I had a leisure trip in the fall (booked & monitored by Cranky Concierge) from the US Midwest to Naples, Italy, which is a great example. I was trying to squeeze in a layover of a day or two in a different city on the way home, figuring I might as well take advantage of being abroad. After looking at a lot of options, I just couldn’t make a layover in a place like Istanbul or Marrakech work with my budget and flight… Read more »
Doug Swalen
Guest

And you didn’t even mention the “fence” where flying US to foreign country X roundtrip costs more than flying from X to the US roundtrip. I don’t see that one ever going away…

Kilroy
Guest

Another, perhaps related, issue is when prices vary based on the pax’ nationality or whether they use the US-targeted web site to book a trip with a foreign airline or use the foreign airline’s home web site (i.e., the one intended for the residents of that foreign country) to book a trip.

Even after making allowances for the different currencies involved, etc, the pricing differences can be substantial.

Jason H
Guest

That’s a much simpler problem of just supply and demand – more people want to fly round trip London-Miami-London in the winter than the other way around so prices are more expensive.

southbay flier
Guest

I had had a trip to a city in Europe and one in the Middle East and could not make a series of one way tickets work (I was on my own dime), so I had to buy two separate round trips and I had to leave myself enough time in my original European city to account for any possible delay.

Bgriff
Member
It’s probably worth specifying that, contrary to the first sentence of your last paragraph, the airlines aren’t necessarily assuming a one-way ticket purchaser is a business traveler — indeed, someone going somewhere and not coming back, or going the other direction using miles, is almost certainly *not* a business traveler. But rather, if you could buy one-way tickets on the same cheap basis as you can for “leisure” roundtrip tickets, then you could easily circumvent Saturday night stay requirements by buying separate one ways. So because the airline can’t tell if a one-way ticket buyer is going to otherwise play… Read more »
Nick
Guest

Some of the reason this may also be sticking around in the international market, is If I buy a OW ticket to Europe from the US, before entering the EU they are will within their rights to ask me for proof of onward travel. If someone has not yet purchased their return flight, it is possible that they could be denied entry, and sent back on the carrier that brought them to Europe without the necessary proof to be in that country at the carriers expense.

Jason H
Guest

If you don’t have proof of return or onward travel, then they generally won’t let you get on the plane regardless of how much your ticket cost. As well as being sent back, the country will fine the airline far more than any ticket costs so that really isn’t a good excuse.

DTB
Guest

Both my wife and I routinely fly to Europe from LAX or SNA using miles one way, returning to LAX with Norwegian. The reasons for this are the high taxes imposed by European countries for the return flight using miles. United, Delta or American have NEVER asked us for proof of return, even though, obviously, we have the Norwegian tickets in our bags. The statement that “they generally won’t let you on the plane” doesn’t ring true, at least in the last 10-20 years or so.

Jason H
Guest

Huh. Delta, United, and foreign carriers have always asked for flying to Asia. Maybe the EU doesn’t really care (although they still have the right to ask ofc)?
Regardless, this isn’t a reason to charge more for one way flights.

Josh R.
Guest

Huh to the huh? There’s no ‘Maybe the EU…’ it’s ‘maybe’ you don’t know the facts. It’s getting old people online making factual statements that are wrong, then using some gibberish opinionated remark to defend themselves without ever actually listening and learning.

Kinsley
Guest

No need to be bitchy there Josh.

partim
Member

This does indeed differ by country. Visa-free entry to the Schengen Area does not require a return or onward ticket. The US Visa Waiver Program, meanwhile, does.

Jeremy
Member

Nice guess Cranky, I’m only 21. Thank you for the response. With the transatlantic market disruption beginning to show itself, I can’t imagine that we are too far away from the meteor hitting those prices. In the mean time, I’ll enjoy my cheap domestic flights.

JayB
Guest

This, dear “Ask Cranky”, is the airline industry! Airlines have “buckets” and they have “fences.” They invented fare rules and anytime customers try to circumvent such rules, offenders are sentenced to read every airline contract of carriage a million times over, and over, and over. Be careful, they monitor blogs! There’s always hope and with luck and health, you may someday see things change!

Nick Barnard
Member
Sometimes even the business travelers found ways around those old fences. When we lived in Binghamton, NY, my dad would spend Monday through Friday in Dayton, Ohio. His travel agent booked the flights as round trips departing DAY on Friday for BGM, then returning on Monday morning, satisfying the Saturday stay restriction at home in Binghamton. I’m sure there was a cost on that initial one way ticket from BGM to DAY, but if you’re going to be in another city week in week out for a long time, there were ways to adjust to the rules. I would’ve expected… Read more »
mark
Member

Any travel agent that does that nowadays risks losing their license to issue tickets. It’s known as back to back ticketing and the bean counters will catch it!

Kilroy
Guest
Back when CVG was a significant and legit hub for Delta, prices out of DAY were much cheaper than prices from CVG, even though many Delta flights from DAY involved a connection in CVG. For reference, the airports are 65 miles apart, and door-to-gate time for them can be pretty similar for people who live on the north side of the Cincinnati metro area. Many people in the Cincinnati area would book flights out of DAY, then never get on the CVG-DAY leg of their return flight and just have someone pick them up from CVG instead of DAY. Alternatively,… Read more »
Marissa
Guest

On United in J I have seen one-way tickets up to $8 or 9k and that’s weeks ahead of day of travel. Absurd!

mark
Member

All legacy airlines ding you for one ways. If you book a one way to London for example it can cost $5000 from JFK but a one way back can cost $7000, If you book a round trip it can cost just $3000 even with change fees it still makes it cheaper.

mark
Member

If you keep an eye on Kayak or Skyscanner you can find cheap one ways. I’ve been looking at one way flights from JfK-LHr and Virgin have them for $285 in April. Still cheaper to do WOW from EWR though if you are flexible on your dates