I asked this question on the Wikipedia reference desk but I didn’t get a satisfactory answer, so as a long-time fan of the Straight Dope I thought this would be a good place to try. So…
If I want to fly from London to Tokyo one-way, I can use a site like Expedia to find a flight. If I do, I’ll find a number of flights along the lines of “Flight 4XX from London Heathrow to Frankfurt, then Flight 710 from Frankfurt to Tokyo.” Or, “Flight 5XX from London City Airport to Frankfurt, then Flight 710 from Frankfurt to Tokyo.” (Note the identical Flight 710 in both options). This comes out as a reasonable £360 or so.
However, lets say I lived in Frankfurt and wanted to take Flight 710 on its own from Frankfurt to Tokyo. This comes out at a whopping £2,374! It would only cost £400 to fly from Frankfurt to London and then get the London-Frankfurt-Tokyo flight!
So just because I fly from London, a flight that would cost £2,300 gets £2,000 lopped off. I can think of some theories, but none that can explain the sheer difference in prices. (And I can’t help but feel that if I routed my entire flight around Europe I’d get the flight for nothing.)
Basically, the only reason I can think of is it’s an incentive to the customer, i.e. “We want your money so much that we’ll lop £2,000 off the price if you go out of your way to fly with us rather than go non-stop!” But I’m still baffled by the huge price difference.
I just did a quick search at Expedia. A round trip from Frankfurt to Tokyo was 503 pounds, and a round trip from London to Tokyo was 534 pounds. One way tickets were 323 and 344, respectively.
About 15 years ago, my wife took a flight from Newark to Toledo to Chicago, and simply got off in Toledo without getting back on. That same seat would have cost about 50% more if she didn’t pretend that she was really planning on going to Chicago.
As abc123 said, I hope she only had carryon luggage. If you do that today, the airlines will cancel the return portion of your ticket (if a RT), and you might have a hard time buying any other ticket from that airline for a while.
There is much more competition for the London-to-Tokyo route than the Frankfurt-to-Tokyo route, so the airlines drop their prices to compete for your business on the London route. (And to keep up their profit margins, they will increase prices on other routes, where there is less competition. The Frankfurt-Tokyo part of that route might happen to be one of those less-competitive routes that gets a price increase.)
The reasons they can play with their prices like this are:[ul]
[li]There is very little connection between the airlines’ actual seat cost and what they charge for a ticket.[/li][li]The value of an unsold seat becomes zero once the flight takes off.[/li][/ul]This is quite a bit different from the products sold in a typical department store, for example.
Another factor is that a non-stop fligth is VASTLY more valuable to teh customer than a one-stop.
As well, the non-stop is more valuable to the airline as it can be the second leg of aany flight from anywhere to (in this case) Frankfurt. And if they sold the seat from Farnkfurt on to Tokyo, they would lose the possiblity to sell teh upsrteam leg. IOW nobody going London to Tokyo would buy a Frankfurt Tokyo ticket unless they could also buy a corresponding London Frankfurt ticket.
Airlines use very large computers running very complex programs to try to optimize their revenue. One effect, as t-bonham@scc.net said is this kind of price difference. Another is a rise in prices as you get into the window where business travelers, instead of leisure travelers, will book, with a decrease again as they try to dump the empty seats. Sometimes if the price is too high it will change if you wait a day.
One problem we had with United when my in-laws visited was a big price increase for stays over a month. Why this is is beyond me. Southwest has no such rule.
Pricing is rational, but you will never have all the inputs to be able to figure it out.
Not sure if the link is posted in a thread somewhere on the Board, but there’s a guy trying to figure it out using Northwest Airlines data. He trying to find the sweet spot of when Northwest drops prices as the flight date approaches and still be assured a seat, regardless of the day and time you fly. He thinks if he can find it, he should be able to port it over to any airline.
50% and 500% are very different numbers. I agree, the phenomenon is very real, but I can’t immagine a person paying, or the airline charging, $4,000 more for a plane ticket.
Please excuse my sloppy conversion from pounds to dollars.
I had a business flight from ORD to SFO. It was $838. I decided to see my relatives in Orange County, so I tried to add leg from SFO to SNA. It added about $300 to my flight. So, I tried a one-way, thus making my trip: ORD to SFO to SNA to ORD. It still added $300. Ok, as a goof, I changed SNA to LAX to get ORD to SFO to LAX to ORD. Total price: $833! I saved $5!