Airline pricing question--there and back again

In the last year I’ve had occasion to look into round-trip flights from the Northeast to the following cities in the West:

San Francisco
Los Angeles
San Diego

I started with Southwest as I have some frequent flyer miles there and generally like their service. They don’t typically sell you a “round trip” ticket, instead pricing both legs of the journey separately. In every one of these cases, for the dates I was looking at, the flight west was relatively cheap (the cheapest tickets always less than $200 and sometimes considerably less), but the flight back was much more expensive (the cheapest ticket was never below $300, I think).

This was true regardless of the airport I chose as my origin: I started with Albany, NY, the easiest for me to get to, but also looked up Bradley (Hartford, CT) and the NYC airports. The pattern was the same in every case. This was also true regardless of whether the flights were direct or involved changing planes.

I know it’s a small sample size. And maybe if I’d run different dates I’d get different answers. But assuming that west-to-east travel is considerably more expensive than going east-to-west, what might account for it?

Just curious! Thanks.

Did you try different days of the week? There are some fares that are good only on certain days and the days may be different going east and west.

For example, there are some cities where people like to go skiing for the weekend. So the fares going to the ski resorts are higher on Thursday and Friday and the fares returning are higher on Sunday and Monday.

That could play a role. The days were kind of all over the map, though:

Phoenix and Tucson would have been Saturday to Monday
LA and SD, Tuesday to Friday
SF, Wednesday to Sunday

(The only trip I actually made was the one to Phoenix)

I suspect it’s time zones.

When you’re flying East, the time zone changes work against you and it’s harder to find a flight that doesn’t have you traveling at an uncomfortable and inconvenient time of day. So there’s more people scrambling to get the few cheap seats on the “good” flights. By the time you get to the website, all the cheap seats are gone.

When you’re flying West, the time zone changes work in your favor and it’s easier to find a flight that gives you time to eat breakfast before you leave and still arrive at a reasonable time of day. So the bargain hunters looking for cheap seats have a wider variety of “good” flights to choose from. By the time you get to the website, a few of the cheap seats are still there.

I’d assume flying west to east is actually less costly for an airline. Flying east is flying with the Jet Stream, and a west-to-east- flight is almost always scheduled with a shorter flight time than the same east-to-west flight. I’d think this would mean it uses less fuel and is cheaper to run.

But I can’t see how this could possibly result in a price differential, since they need to move the aircraft both ways. If you fly one-way, the fuel cost component should be half of the roundtrip fuel cost.

Suppose the jet stream effect were so great that fuel costs were 10 times higher westbound. If the airlines initially priced tickets accordingly, more people would drive west and fly east. This would just result in many empty seats in westbound aircraft. Airlines would drop the price on westbound tickets to fill the aircraft up, and start passing on the costs of the empty aircraft on the westbound leg to the eastbound passengers.

But you can’t really divide your trip that way because you couldn’t get your car back east? So the airline can “get away with” charging prices closer to cost. I say “get away with” but it really is a “fairer” method.

But aircraft can’t pile up on one side of the continent either. Airlines must fly both ways, so the only way to run an airline business is to reckon your costs on a roundtrip basis. Think of it this way: if you are SFO-based airline, each mile that you fly your plane east, you have already incurred the westbound fuel cost of the return trip, since you are not going to just abandon your aircraft on the east coast.

So airlines will try to maximize revenue accordingly, trying to fill up as much of the aircraft as possible in both directions at the highest price they can obtain. Only east vs west demand differences (more people going east vs west) or competition differences (ground transportation that is priced differently east vs west) will lead to east vs west price differences.

It doesn’t affect the supply demand question, but even the “fairness” issue doesn’t really hold water. If I’m flying one way, an integral part of the service that the airline provides is to fly the aircraft in the opposite direction too. Why should the direction that the wind is blowing make a difference in how total roundtrip costs are allocated? Similarly, if there’s a bus service up and down a steep road to a village at the top of a mountain, where the bus can just coast downhill and use zero fuel, should the service be free to people who happen to be catching the bus downhill, and the entire cost of the service be borne by the uphill passengers? That makes no sense to me. In order to catch the bus at the top of the mountain, it has to get there.

There’s your issue:
Slowest Airline days
Tuesday, Wednesday, Saturday

So in all cases, your outgoing is on what is normally a cheaper day.
Try pricing tuesday->tuesday.

This is it. The loads on flights are very different depending on the day - and sometimes the city. Flights out of Vegas on Friday are relatively empty for example, as our flights back in on Sunday.

Interesting theory. I just priced Albany/Phoenix on two consecutive Tuesdays and got:

lowest price westbound $180
lowest price eastbound $255

I also tried Hartford/San Francisco on Fridays and it was much closer: $215 to $229.

But then I tried Sundays Newark/San Diego and got: $299 westbound and $621(!) eastbound. This was two months from now and the “wanna get away” fares eastbound were gone, lending some credence to what sbunny8 said.

These spot checks, anyway, don’t quite bear out the hypothesis of the day of the week being important.
Thanks for the replies so far. Very interesting!

Using the ALB/PHX example, the $180 fare is available
on the following days:

Westbound ALB -> PHX
Jan 25, 26, 27, 28, 30
Feb 2, 3, 4, 6, 8, 9, 17, 20, 23, 27
Mar 1, 5, 8, 15, 22, 27, 30

Eastbound PHX -> ALB
Jan 26, 27, 28, 29, 30
Feb 1, 2, 3, 4, 6, 10, 13, 24
Mar 1, 15, 23
The traditional wisdom has been that booking your flights far ahead results in the cheapest prices. Airline pricing models have become much more sophisticated. They have historical data on demand for individual days. They aren’t going to start giving away seats on flights until they are certain no one wants to pay a higher price for them. Even if not very many people have booked flights for March yet, they have historical data that says they will. As the date gets closer, if the bookings don’t materialize as expected, they will start dropping prices. You will often see prices dropping in the not-too-distant future while they are still relatively high in the far-distant future.

This would be my guess too.

**Alley Dweller **nailed it in post #12. Yield management is massively sophisticated now. The goal is to auction every seat on every flight every day to the highest bidder.

In general, direct operating costs (“DOC”) are less going eastbound versus westbound. Due to high altitude winds mostly.

But in any business total costs only form a long term aggregate lower bound on aggregate price. IOW, you can’t have aggregate annual revenue below aggregate annual cost for too many years before bankruptcy looms. Businesses can absolutely sell individual items at widely varying margins essentially forever though. And they can even sell some fraction of their product at loss-leader prices essentially forever as well.

Overall, DOC are a small part of total costs. And the delta in DOC between east- & west-bound is a small part of DOC. IOW, the wind difference is a pimple on the cost elephant. Which elephant is only loosely related to the price rhino.

Ref this:

I bet if you check there is a large convention or sporting event in SD that weekend. And as such the demand has spiked way up. I also bet that if you tried the same flights on the Thu & Fri prior to that Sunday you’d get the opposite price / availability curve.

Even if you can’t find a convention or sporting event, consider how many snow-bound winter-weary New Englanders would rather enjoy an early spring weekend retreat in sunny SD than vice versa?

Yield management tracks every convention and sporting event at every city in the system for the next couple of years. And knows when they were in prior years as well. e.g. It doesn’t matter which weekend next year the Patriots are playing the Chargers; tickets from the far northeast to/from SD will be premium-priced accordingly that weekend.