I’ve made a conscious effort over the last couple years to pull back on awarding too many Cranky Jackass awards. I didn’t want to cheapen such an illustrious institution. But today, American, Delta, and United each get a share of the first Cranky Jackass of the year. This is a complex issue, but the upshot is that if you need to book a multi-city trip, you now need to book each direction as individual one ways to avoid overpaying by potentially thousands of dollars. This is a very bad move with huge unintended consequences. United already appears to be backing off, but only partially. Let’s hope this all disappears soon.
Let me back up and talk about the different types of itineraries since this will help make it easier to understand what’s going on.
The Basics of Itinerary Types
The airlines have different rules on how fares can be combined on different types of itineraries, but it’s the last one down below that’s the target of these changes.
- One Way – From Point A to Point B (eg Los Angeles – New York)
- Roundtrip – From Point A to Point B and back to Point A (eg Los Angeles – New York – Los Angeles)
- Single Open Jaw – From Point A to Point B and back to Point C OR from Point A to Point B and from Point D back to Point A (eg Los Angeles – New York – San Francisco or Los Angeles – New York and Washington – Los Angeles)
- Double Open Jaw – From Point A to Point B and from Point C to Point D (eg Los Angeles – New York and then Washington – San Francisco)
- Multi-Component Circle Trip – From Point A to any number of places and then back to Point A as long as the chain isn’t broken(eg Los Angeles – New York – Washington – Los Angeles)
This is a somewhat simplistic explanation, but let’s focus on that last piece, the multi-component circle trip. Previously, if you bought a ticket that had no more than two stopovers on a circle trip for domestic travel, it would just combine the lowest fares in the market to create the total fare. In the last couple weeks, however, airlines stopped allowing people to combine non-refundable fares on circle trips. That means if you do one search and price everything together, the system will now only use very expensive refundable fares.
Why Is This Bad?
The big problem here is that this is an opaque rule change. Travelers don’t know that now, in many cases if not all, they can save a ton of money by searching for separate one way options. Here’s an example itinerary that shows what I’m talking about.
I picked some dates in May for a pretty standard circle trip with at least a couple of days in each place. As of yesterday when I ran the search (pricing can always change), this would cost only $412.80 if bought individually as three separate one ways. But if you try to book it on a single ticket? That’s $1837.20 now. Why so expensive? Well, it’s because for circle trips, only refundable fares will be considered per the new rules.
Let’s not just pick on American. I looked at Delta on the same dates going from Orlando to Minneapolis, on to Dallas and then back to Orlando. Bought as three one way tickets, the total was only $370.80. But on a single ticket? It was $2288.20, an increase of more than $1900 for the same exact thing.
That is obnoxious at the very least, and frankly, it should be illegal to not disclose to passengers that it’s much cheaper if booked separately. It’s particularly awful since airlines have beaten it into travelers for decades that you’ll never save money by buying two one ways instead of a roundtrip.
Where this really hits hard is with corporate travelers. Many large companies use online booking tools and it’s pretty common for travelers to need something more than a simple roundtrip. So now when a traveler punches in a circle trip, the system will spit back an insanely high price. The traveler will just book it and the company will lose a ton of money. If the traveler is smart enough to figure out he needs to book everything individually, great. But if plans change, there will now be a $200 change fee for every direction instead of one fee for the entire ticket. That’s a big potential cost increase, and the corporates and agencies are screaming at the top of their lungs right now.
The airlines somehow didn’t think this through when they made the change. This is the kind of behavior that gets Congress to push through regulation.
Whose Fault is This?
I’m having trouble pinpointing exactly how this started, but you can judge for yourself from their individual responses to my query.
Those particular fares [Ed Note: The fares I asked about were domestic non-refundable fares, so it’s a pretty broad brush] were intended to be local fares, so it was never our intention that they be combined on a single ticket. Our intent is to price by origin and the final intended destination. We know that this change has had some unintended consequences, so we’ve been making adjustments in response to customer feedback.
I don’t have a comment to share at this time.
We matched the industry on domestic combinability changes.
Why Are They Doing This?
What the airlines are really doing here is trying to kill an ant using a wrecking ball. We’ve seen the legacy carriers get more aggressive with matching ultra low cost carrier fares in certain markets, and that means that individual segment fares on two flights are a lot cheaper than connecting fares. This is an effort to try and hide that pricing from people. Here’s an example.
In some cases, this would have previously priced as a sum of local fares on a single ticket, meaning the cost would have been $264.20. But United’s lowest one way fare from Orlando to San Francisco is $338.60, so it doesn’t want to undercut itself. To fix that, it just made it so that non-refundable fares couldn’t be combined on an itinerary like this. If the stop in Denver is longer than a permitted connection (4 hours), then it’ll price at near $1,000.
Of course, the smartest people who really are trying to game the system are still going to be able to purchase individual segments and get away with this. But those who just stumbled on it through a website won’t know it exists. That must be the point.
All this being said, the most important point is that this fare structure is the legacy carriers’ doing. Yet those on legitimate multi-city trips are suffering mightily because of the inconsistency that the airlines have created.
Is There Hope?
Yes there is. United appears to have figured out that this was a problem and has now implemented a softer approach. So far, it’s terrible because it’s not across the board. Best I can tell from a quick search is that fares that require a Saturday night stay can’t be combined, but other fares can. Talk about a confusing situation.
Yesterday, United sent out a rushed communication from its sales team called “Understanding domestic fare combinability rules.” In it, United explains exactly why it’s doing this (the reasons I mentioned above). But it says that circle trips are again allowed on one ticket when the traveler returns to the point of origin. So it will still be a problem for people going, say, LA to New York, on to Washington, and then back to San Francisco. But in theory it’s not going to be a problem for the person who comes back to LA. That may be the goal, but it’s not what’s happening in practice in every domestic market as of yesterday.
I would assume we’ll see American and Delta soften their stances here as well over time, especially considering the anger I’m hearing coming out of the corporate and agency community. In fact, that’s why I’m publishing this post today. If highlighting what the airlines are doing can help get it reversed, then I’m all for it.
Regardless of where it ends up, that level of trust that one way fares aren’t going to be cheaper than the sum of the parts is lost. You should always check one way pricing now to make sure you’re not getting screwed.