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Why Are One-way Fares Higher Than Round-trip?  
User currently offlineSankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Posted (4 years 10 months 2 weeks 5 days 18 hours ago) and read 9837 times:

Hi all -- have always wondered about this: Why are one-way fares on most "legacy" airlines so high, usually higher than most round-trip fares? What is the logic behind that? And why does the same logic not work for low-cost airlines, who always price on a one-way basis?

Thanks!

Sankaps.

25 replies: All unread, showing first 25:
 
User currently offlineBurkhard From Germany, joined Nov 2006, 4395 posts, RR: 2
Reply 1, posted (4 years 10 months 2 weeks 5 days 17 hours ago) and read 9811 times:

Legacy carriers want buisiness travel to pay a lot - and on the other hand not loose private travel to the LCC. One way flights are very typical for buisiness flying, and rare for private ones. But I'm convinced they will have to give this up.

User currently offlineAirbazar From United States of America, joined Sep 2003, 8287 posts, RR: 10
Reply 2, posted (4 years 10 months 2 weeks 5 days 17 hours ago) and read 9781 times:

Quoting Burkhard (Reply 1):
Legacy carriers want buisiness travel to pay a lot - and on the other hand not loose private travel to the LCC. One way flights are very typical for buisiness flying, and rare for private ones. But I'm convinced they will have to give this up.

They already are giving it up. At airports where there is competition from both other legacy carriers and Low Cost carriers one-way fares are not more expensive than RT fares. This is the case at my home airport (BOS), where no carrier is a dominant carrier and we have just about every LCC operating from here. Not only have I bought one-way tickets on both AA, US, and DL that were about half the price of the RT fare but when you search for a RT on Orbitz, from BOS, the cheapest fare is usually a combination of airlines. For example, my last trip was BOS-RDU-BOS and the choice I picked had me on AA for the outbound and DL for the return.
Another example that this practice is fading: You can now buy one-way award tickets on AA with only half the miles.

[Edited 2009-10-08 04:34:40]

User currently offlineRwSEA From Netherlands, joined Jan 2005, 3092 posts, RR: 2
Reply 3, posted (4 years 10 months 2 weeks 5 days 15 hours ago) and read 9596 times:

I recently relocated to Europe for my job, and my company paid $2K one way from SEA-AMS. Completely rediculous! I called NW to discuss cheaper options, and was told that their policy is to sell only full-Y tickets for one-ways. Basically, it's a way to screw over those who HAVE to travel.

I did look at roundtrips for a lower fare (with the intent of ditching the return), but the flight options weren't as convenient and for some reason the roundtrips were a bit more around that time (busy convention season in AMS). Since I wasn't paying for it, I just went with the one-way. The only perk was that I got extra baggage allowance with a full-Y ticket (and it's a good thing I printed out the proof, because I had to argue with agents in both PDX and SEA about this fact).


User currently offlineEBGflyer From Denmark, joined Sep 2006, 1001 posts, RR: 0
Reply 4, posted (4 years 10 months 2 weeks 5 days 15 hours ago) and read 9552 times:

Depends on what airline you refer to.

In Europe SK has taken on a different approach with intraeuropean flights allowing one-way fares without the usual legacy restrictions that ie LH impose.



Future flights: CPH-BKK-MNL; MNL-GUM-TKK-PNI-KSA-KWA-MAJ-HNL-LAX
User currently offlineSkymiler From United States of America, joined Aug 2007, 528 posts, RR: 1
Reply 5, posted (4 years 10 months 2 weeks 5 days 15 hours ago) and read 9552 times:

Not necessarily true!

I rarely, if ever, do a R/T -- almost always use 2 one ways, and about 80% of the time make out better.

The reason is that with the continual shifting of fares, the return leg may have dropped after the time I made the outbound, and had I booked a R/T I would have had the higher fare.

Also, lots of flexibility in routing (e.g. into CMH, out of DAY).

It's all part of the "shop hard" approach!



I love to fly, and it shows!
User currently offlineLAXintl From United States of America, joined May 2000, 25077 posts, RR: 46
Reply 6, posted (4 years 10 months 2 weeks 5 days 14 hours ago) and read 9423 times:

One-way fares generally dont come with half the restrictions of of round-trip tickets, so one does often pay a premium for such flexibility.
For examply by purchasing two one way, one can skirt around min/max stay requirements attached to traditional roundtrip fare basis.



From the desert to the sea, to all of Southern California
User currently offlineIntermodal64 From United States of America, joined May 2006, 124 posts, RR: 0
Reply 7, posted (4 years 10 months 2 weeks 5 days 11 hours ago) and read 9224 times:

Because a mid-level pricing manager at a legacy did an analysis and determined this practice to be revenue-positive, and no one questioned the assumptions.

User currently offlineAirbazar From United States of America, joined Sep 2003, 8287 posts, RR: 10
Reply 8, posted (4 years 10 months 2 weeks 5 days 11 hours ago) and read 9155 times:



Quoting Intermodal64 (Reply 7):
Because a mid-level pricing manager at a legacy did an analysis and determined this practice to be revenue-positive, and no one questioned the assumptions.

Which explains why legacy carriers are swimming in cash  Smile


User currently offlineHuaiwei From Singapore, joined Oct 2008, 1113 posts, RR: 2
Reply 9, posted (4 years 10 months 2 weeks 5 days 10 hours ago) and read 9089 times:

I believe this is because the vast majority of air travellers travel on a round-trip basis. If the airline sells a one-way ticket, it runs the risk of not being able to sell the ticket for the return leg, thus resulting in lost revenue. They make up for this by forcing you to pay almost the same as a round-trip ticket to insure themselves against that.

Naturally the airline benefits either way: if they can't sell that one-way ticket, it has already been at least partly compensated, without incurring actual costs serving a passenger in that unsold seat. If they actually manage to sell the ticket, they get revenue for it on top of the compensation amount you already paid!



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlineViscount724 From Switzerland, joined Oct 2006, 25125 posts, RR: 22
Reply 10, posted (4 years 10 months 2 weeks 5 days 8 hours ago) and read 8944 times:



Quoting Huaiwei (Reply 9):
I believe this is because the vast majority of air travellers travel on a round-trip basis. If the airline sells a one-way ticket, it runs the risk of not being able to sell the ticket for the return leg, thus resulting in lost revenue. They make up for this by forcing you to pay almost the same as a round-trip ticket to insure themselves against that.

Selling one way fares at half the special round trip fares also makes it much easier for passengers to use another carrier on the return trip. Keeping one way fares high largely prevents this. And, as mentioned, there are very few true one way passengers.

Another reason for high one way fares is that currency imbalances and market factors often make fares in each direction on the same international route very different. High one way fares, especially in the direction from the country with low fares, also makes it less beneficial for business travellers paying the high unrestricted fares to purchase separate one way fares in each direction to undercut the round trip fare from the country of origin.


User currently offlinePlateMan From United States of America, joined May 2007, 923 posts, RR: 0
Reply 11, posted (4 years 10 months 2 weeks 5 days 8 hours ago) and read 8879 times:

I was just wondering this myself while booking a LGA-MSP-DTW-EWR trip.

Round trip was reasonable at about $430. The one way flights alone were over $500 each. Absurd.



"Explore. Dream. Discover." -Mark Twain
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32703 posts, RR: 72
Reply 12, posted (4 years 10 months 2 weeks 5 days 8 hours ago) and read 8872 times:

Although, to note, airlines have done away with round-trip requirements on many routes. American Airlines pretty much matches everything Southwest does these days out of MIA/ORD/LAX, and I can't remember the last time I purchased a domestic AA fare with a round-trip requirement. Then again, I haven't flown to a small market or on an RJ since 2002. The dynamics are very different between the major markets where the legacies co-exist with LLCs, and smaller markets.


a.
User currently offlineFalstaff From United States of America, joined Jun 2006, 6088 posts, RR: 29
Reply 13, posted (4 years 10 months 2 weeks 5 days 7 hours ago) and read 8773 times:
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I travel between DTW and STL alot on NW and I have found a couple of times it was cheaper to buy two one ways than it was to fly round trip. Many times the round trip is exactly the same price as the one ways. I have flown one way and driven back too and the ticket is always cheap.

This past summer I flew STL-IAH-SFO on a CO one way. The next week I flew DL SFO-ATL-STL. Buying two oneways on two airlines was cheaper than buying a roundtrip between STL and SFO on either carrier.



My mug slaketh over on Falstaff N503
User currently offlineFlyDeltaJets87 From , joined Dec 1969, posts, RR:
Reply 14, posted (4 years 10 months 2 weeks 5 days 7 hours ago) and read 8750 times:



Quoting Skymiler (Reply 5):
Also, lots of flexibility in routing (e.g. into CMH, out of DAY).

I'm doing this next week, well except into DAY and out of CMH. CMH is my true destination. DAB-DAY was around $190. DAB-CMH was about $280. I checked a multi-city for DAB-DAY going up and CMH-DAY coming back and the ticket was about $230. So to save the person who is picking me up one trip to DAY, I decided to go out of CMH on the return. All on one ticket under one confirmation number too.

As you said, it's about the "shop hard" mentality. If you make the effort, you can almost always find a good deal.

Last year, I also booked a round trip to DAY from MCO using two one way tickets. CO was cheaper one way going up on Friday night where as DL was cheaper coming back Monday night. Both were pretty pricey for the round trip so I booked two one way tickets.


Quoting PlateMan (Reply 11):
Round trip was reasonable at about $430. The one way flights alone were over $500 each. Absurd.

I guess it varies. Now some airlines, including AA, display your total fare as the combination of two one way fares, even on routes where they don't compete with LCCs (I've often looked them up for MCO-GSO).

I have noticed with frequent-flyer reward tickets, sometimes they'll charge you the same number of miles for a one way as they do for a round trip.


User currently offlineChrisair From United States of America, joined Sep 2000, 2092 posts, RR: 3
Reply 15, posted (4 years 10 months 2 weeks 5 days 4 hours ago) and read 7736 times:



Quoting Huaiwei (Reply 9):
I believe this is because the vast majority of air travellers travel on a round-trip basis. If the airline sells a one-way ticket, it runs the risk of not being able to sell the ticket for the return leg, thus resulting in lost revenue. They make up for this by forcing you to pay almost the same as a round-trip ticket to insure themselves against that.

Wait. How on earth does this make sense? If you buy a one way ticket, the airline can sell just as many seats, or more, by overbooking the return leg as they could if you bought a round trip ticket. The two are totally independent of each other. It's not like you're flying one way on a biz jet to some deserted island in the middle of the South Pacific.

I can't remember the last time I bought a round trip ticket on any airline. I book one ways on WN and AS all the time. Makes refares and changing the ticket much easier.


User currently offlineSkymiler From United States of America, joined Aug 2007, 528 posts, RR: 1
Reply 16, posted (4 years 10 months 2 weeks 5 days 3 hours ago) and read 7622 times:

In reading and pondering this thread, I suspect that there is something in common by those that eschew the R/T for the one-way approach.
I am going to hazard a guess that most of us are quite experienced travelers, possibly with a connection to the industry (I certainly qualify).
Many travelers just use whatever (probably non-airline) Web site shows them, and are unaware of what can be found with "shop hard", and a bit of thinking out of the box. I have also tried some of the sites that "promise" to find the best deal, but there is still no match for the human mind!
I never try to break the system or try to negotiate favours, but it is amazing what one can find, if one makes the effort, and applies a bit of thought to what is presented by the carriers themselves!
Long live the consumer!



I love to fly, and it shows!
User currently offlineAerokiwi From New Zealand, joined Jul 2000, 2687 posts, RR: 4
Reply 17, posted (4 years 10 months 2 weeks 4 days 22 hours ago) and read 6544 times:



Quoting EBGflyer (Reply 4):
In Europe SK has taken on a different approach with intraeuropean flights allowing one-way fares without the usual legacy restrictions that ie LH impose.

LH still operates as though it's 1992 - if they ever get their hands on SAS then you can kiss the one-ways goodbye.

Quoting Huaiwei (Reply 9):
I believe this is because the vast majority of air travellers travel on a round-trip basis. If the airline sells a one-way ticket, it runs the risk of not being able to sell the ticket for the return leg, thus resulting in lost revenue. They make up for this by forcing you to pay almost the same as a round-trip ticket to insure themselves against that.

But I suspect an increasing number of travellers require increasingly complex itineraries, such as flying into one airport and leaving from another. The likes of LH and AF don't allow for this, meaning passengers switch to LCCs for BOTH legs rather than just one.

Frankly, any airline still refusing to offer half-priced one way fares is probably in long term danger of collapse. Seriously, it's as though they have just stuck their heads in the sand and refuse to acknowledge changing traveller trends and the presence of LCCS. Air France KLM and Lufthansa come to mind on this one. Atrocious in-flight service and ridiculous policy towards fares - again, it aint 1992 anymore, but these guys seem to refuse to accept this.


User currently offlineMbe0002 From Germany, joined Feb 2007, 23 posts, RR: 0
Reply 18, posted (4 years 10 months 2 weeks 4 days 22 hours ago) and read 6476 times:

Even LH started a few years ago to sells one way tickets on domestic routes e.g. fra-txl for 80 EUR

User currently offlineSurfandSnow From United States of America, joined Jan 2009, 2862 posts, RR: 30
Reply 19, posted (4 years 10 months 2 weeks 3 days 7 hours ago) and read 5522 times:

Ah the classic LCC vs. legacy airline debate. LCCs have to come up with innovative pricing strategies to attract new customers. At the end of the day, legacies really don't have to follow suit, because they offer mileage programs and flights to pretty much anywhere, while the LCC can only take you to a handful of nearby cities...


Flying in the middle seat of coach is much better than not flying at all!
User currently offlineMcg From United States of America, joined Sep 2003, 800 posts, RR: 0
Reply 20, posted (4 years 10 months 2 weeks 2 days 9 hours ago) and read 5347 times:

In September round trio DEN-MSO-DEN was $350.00. One way DEN-MSO was $330.00. No matter how hard I try, I can't understand this.

User currently offline413x3 From United States of America, joined Jul 2008, 1983 posts, RR: 0
Reply 21, posted (4 years 10 months 2 weeks 2 days 9 hours ago) and read 5336 times:

Because they want you guaranteed to be on their plane back to DEN from MSO

User currently offlineMcg From United States of America, joined Sep 2003, 800 posts, RR: 0
Reply 22, posted (4 years 10 months 2 weeks 1 day 7 hours ago) and read 5088 times:

Here is what's odd, there is only one airline between MSO and DEN, it's UA. So there is only one airline to return on, UA. This summer I flew between DEN and BZN. There are two airlines that fly between DEN and BZN, UA and F9. Round trip fare was $210, one way fare was $105. So I think that the level of competition on a route has a lot to do with the one way fare.

User currently offlineViscount724 From Switzerland, joined Oct 2006, 25125 posts, RR: 22
Reply 23, posted (4 years 10 months 2 weeks 1 day 7 hours ago) and read 5088 times:



Quoting Mcg (Reply 20):
In September round trio DEN-MSO-DEN was $350.00. One way DEN-MSO was $330.00. No matter how hard I try, I can't understand this.

But I would guess that the $330 one way fare much less restrictive than the $350 round trip fare. That's usually the case except for low-cost carriers which generally only price on a one way basis. All AC fares within North America (and some international markets) are also one way only, doubled for round trip. AC was one of the first major carriers to move to a one way pricing structure on domestic and U.S. transborder routes.


User currently offlineCrosswinds21 From Netherlands, joined Jun 2009, 698 posts, RR: 0
Reply 24, posted (4 years 10 months 2 weeks 1 day 6 hours ago) and read 5088 times:



Quoting Mcg (Reply 20):
In September round trio DEN-MSO-DEN was $350.00. One way DEN-MSO was $330.00. No matter how hard I try, I can't understand this.

I would look at at it like this: typically, all regular fares are one-way, and that's for all legacy carriers. However, these one-way fares are also refundable and unrestricted, meaning that they're more expensive. For instance (let me use AA as an example since I'm more familiar with their inventories), consider a market like NYC-DFW on AA. It's typically a very expensive route to fly unless you book in advance. AA's non-discount coach fares for this market might look something like this (all dollar amounts are hypethetical):

Y: $1400
H: $1100
K: $1050
M: $950
L: $850

All the above are one way refundable fares. Now, given this, AA chooses to provide some deeply discoutned fares, but AA only chooses to do this on round tip flights as these are really only for leisure travelers who have a tighter budget. These round trip fares may look something like:

V: $550 (7 day advance)
S: $390 (14 day advance)
N: $260 (21 day advance)

And that's it. In this hypothetical, yet realistic example AA only chooses to discount round trip fares. Therefore, you can get a decent fare if you fly round trip and book at least 7 days in advance and otherwise, you're stuck paying the one way fares whether actually flying one way or round trip. In addition, even if you do book 21 days in advance but you're only going one way, then you're also stuck paying at least the L fare. The whole point is that although one way fares do exist here, AA chooses to discount only the round trip fares. Consequently, all the round trip fares are fares are non refundable while the one way ones are.

Of course, this will only work in market with minimal competition. In other markets (especially those with LCC competition), the exact same principle applies. The only difference is that LCCs choose to discount their one way fares, forcing the legacies to do the same. For example, if you were to analyze the AUS-NYC market on AA, what you'll get is completely different from the pricing structure above, due to the increased compeition that AA has on connecting flights (versus having a virutal monopoly on non-stop NYC-DFW flights).


User currently offlineMillwallSean From Singapore, joined Apr 2008, 1241 posts, RR: 6
Reply 25, posted (4 years 10 months 2 weeks 22 hours ago) and read 5088 times:



Quoting Aerokiwi (Reply 17):
Frankly, any airline still refusing to offer half-priced one way fares is probably in long term danger of collapse. Seriously, it's as though they have just stuck their heads in the sand and refuse to acknowledge changing traveller trends and the presence of LCCS. Air France KLM and Lufthansa come to mind on this one. Atrocious in-flight service and ridiculous policy towards fares - again, it aint 1992 anymore, but these guys seem to refuse to accept this.

Hmm, you dont think that this hatred towards those airlines might cloud your judgement?
LH is Europes most successful legacy airline right now so talks about going out of business seems rather childish.
However LH might not pull out all stops to make the economy class passengers rank them highest. But anyone that travels in the higher classes and goes through FRA or MUC knows that LH offers a competitive product that many of the worlds largest companies keeps coming back for.

In regards to one way tickets, its seems that this practice is slowly disappearing on shorthaul. AFKL usually provide split oneway prices on shorthaul on KL website.
Longhaul is different though, here the legacies get away with one way fares that are ridiculous. usually a one month ticket is always cheaper than a oneway ticket.



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