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.
46 comments on “Why are One-Way Fares So Expensive Internationally? (Ask Cranky)”
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?
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.
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.
But the round trip, while cheaper than the inflated one-way, is still twice of what the one way “should” cost.
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.
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.
Miss Informed – There are people who do just that, but it is against airline rules. The question is… what happens if you ignore those rules?
If you do it regularly, then the chance of you getting caught is much higher than if you do it as a one off. But if the airline does happen to catch you, options include, sending you a bill for the fare difference for what you’ve flown vs what you purchased, suspending your mileage account so you forfeit your miles, or even banning you from the airline. In practice it’s not likely this will happen if you aren’t a serial abuser, but it’s still against the rules so I wouldn’t recommend doing it.
The smart play is to not stick your FF number in the ticket. They can still catch you, but it gets a bit tougher without the FF number.
Just don’t cancel the return flight. A lot of times now the change fees are more than the fare you paid so if your plans change then the GDS won’t let yu change the ticket anyway.
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 time constraints, as Air Maroc and Turkish were the only international airlines I could find whose one-way fares were reasonable.
Ultimately I wound up taking one US airline from the Midwest to JFK, Meridiana (ULCC, and the only airline that offers nonstops from JFK to Naples, Italy, but which, unfortunately, does not seem to offer decent one-way prices) roundtrip from JFK to Naples, and then a second (different) US airline from JFK back to the Midwest. That was 3 separate itineraries, 2 domestic one-ways and 1 international round trip. I really wish it could have been 2 international one-way trips, but despite an outstanding effort from the Cranky Concierge staff we weren’t able to make it work with my constraints.
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…
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.
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.
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.
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 by the rules of getting cheap leisure fares, they play it safe and only let you buy at the higher business traveler fares.
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.
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.
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.
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.
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.
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.
No need to be bitchy there Josh.
My husband and I were awakened in the middle of the night because our grandson, 21, was moving to live with us in Florida. We paid $1600 for a one-way ticket. Delta was not letting him on the airplane until he could prove he was returning. In our grogginess, we couldn’t understand that concept. He wasn’t returning. We’d bought the ticket. So, my spouse got on his computer and quickly bought a two-way ticket, which surprisingly cost half. He then cancelled the one-way for full refund. And our frantic grandson was able to get on the next flight, with a worse return time for us, but at least he got in the air and on his way. We are baffled, and will give him the extra money.
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.
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!
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 lots of long term consultants did this as well.
Nick – Yep, that’s back-to-back ticketing and it’s also against airline rules.
Is it though? It sounds like he just flipped the origin and destination, so that after an initial one way flight from BGM to DAY on the first Monday, he then had a series of DAY-BGM-DAY round trips to go home for the weekend, rather than making the round trip BGM-DAY-BGM for the work week.
Wouldn’t back to back ticketing be if there were two nested round trips, one BGM-DAY-BGM and one DAY-BGM-DAY, where the first week consisted of the two outbound legs and the second week consisted of the two return legs.
David M – This is still considered back to back.
Without overlapping tickets? I think airlines would be on pretty shaky ground there. As Nick described it, there’s no overlapping tickets, just a single one way to start, the round trips back home each weekend, and maybe another one way at the end (Nick didn’t mention that).
You could probably make the case that it’s back to back if those two one ways were really a round trip many months apart. Or if the round trips were interspersed, but it doesn’t sound like that since the Saturday night say requirement was met.
I’m not sure on the exact details of the booking. (This was back in US Air’s Red, White(/Silver) and Blue days.) That being said there was a travel agent involved, so considering they kept doing it the airline likely didn’t ding them for it.
But CF and David, your back and forth does bring up a good question, who gets to decided what the “true origin” is? Essentially my dad moved it from BGM to DAY with a one way ticket.
If it really came down to it, you could even move your true origin (i.e. that initial one way flight) on a different airline so the only thing US could’ve complained about was that the address for FF miles, etc was in BGM not DAY, which would could easily be changed by having the FF account’s address be the office.
Its these little picky things that gave airlines a cruddy name when it comes to pricing. It really gets down into some nitty gritty and makes the airlines look like control freaks, who want heads I win, tails you lose. I’m just glad we’ve moved on from such draconian restrictions.
Nick – There are plenty of travel agents who are happy to bypass the rules. They just learn how to do it so that they reduce chances of getting caught. Still, it can result in some pretty big debit memos if they do lose that gamble.
And ultimately, the airline is the one who decides.
Have any of these rules ever made it into court? Or is that just not worth anyone’s time and the risk of airlines not working with a travel agent ever again?
Nick – I have no idea if those rules have ever been challenged in court.
It wouldn’t be criminal, of course. But chances are if it went to court it would be the traveler suing the airline because the traveler didn’t like the remedy that the airline imposed. When it comes to travel agents specifically, the agents have no power. If they get a debit memo, they can challenge it but it’s up to the airline to determine if the challenge is valid. (That process is usually used to challenge when a mistake has been made.)
Or he could have driven his car to DAY so he wouldn’t have to rent one, then drove it back at the end, leaving it at the office or his rental apartment over the weekend he was home. This way it would look like he was taking a weekend trip to BGM every week. I don’t see how this would be violating any rules, even now.
TC99, or you know just park it at the airport in DAY over the weekend.. Lyft and Uber were far from being a thing, and they cabs in Dayton are…. well they are. I’m sure he had a rental car in DAY.
That being said it might’ve been cheaper for the company to pay miles to move his personal car, and then get a rental car when he was in BGM.
I’ve taken my son to spend a couple of weeks with my parents in Boston. I’d book the round trip for two, LAX-BOS-LAX, with the return two weeks later. I’d nest inside it a solo BOS-LAX-BOS ticket for myself so I could work during those two weeks. Typically, I’d take an LAX-BOS red-eye, rent a car for a few hours to take my son to my parents, and fly BOS-LAX that night. I’d repeat two weeks later to pick up my son. I did this several summers in a row. Is this considered technically illegal? My son is old enough now I could send him on his own if he wanted to visit my parents.
If you do it on the same reservation it’s technically not illegal, but you can only usually do two round trips within one reservation due to airline rules about the number of times you can go back through the same city
Hsano – Well, even if this is against airline rules, there wouldn’t be any harm. Boston-LA has one way pricing, so there’s nothing that you’re skirting by booking this way. I can’t imagine an airline trying to enforce anything in a market like this.
It’s not back to back ticketing it’s hidden city ticketing
mark – That’s not hidden city ticketing. Hidden city ticketing would be if his dad actually lived in Cincinnati and bought a cheap ticket from BGM to Dayton but then got off in Cincinnati to save money.
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, and without breaking airline rules, many people would just fly out of DAY and take the jumper flight to save money. If everything went as planned, they returned to DAY; if weather hit or if their CVG to DAY flight was delayed, they still had the option to leave at CVG.
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!
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!
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.
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