Ticket pricing - anyone explain?

[North Shore]

A relative has been living overseas for some time now, and is coming back to Canada. The round trip airfare is about $1k less than the one way ticket (middle of August travel date.) Does the airline honestly think that we are going to pay the one way fare, or just book the round trip, and not show up for the return leg?

Can anyone attempt to explain the logic behind this?

[porcsord]

If I were them, I'd plan on that, and then over sell the flight.

[photofly]

Some European airlines would bill your credit card the difference between the one way and (cheaper) return if you didn't show up for the return leg.

For instance they have an agreement with the airport operator to deliver a certain number of passengers a proportion of whom will buy duty free, meals, coffee, drinks etc, in return for a kickback to the airline, and you are depriving them of that revenue. That may not be the case here but airline economics are never straightforward.

Otherwise it's just yield management: passengers flying one way are willing to pay a higher price.

[North Shore]

That's interesting^ If I've paid for the seat, then I should be able to use (or not) it as I want?

[photofly]

That's interesting^ If I've paid for the seat, then I should be able to use (or not) it as I want?

No, not really. The airline has sold your presence to the airport operator as a milk cow. You are a commodity. Welcome to the twenty first century.

[CpnCrunch]

That's interesting^ If I've paid for the seat, then I should be able to use (or not) it as I want?

No, not really. The airline has sold your presence to the airport operator as a milk cow. You are a commodity. Welcome to the twenty first century.

It could be a violation of contract law, though. Unless you agreed to it somewhere, I don't think they can suddenly charge your credit card more just because you didn't show up for the return flight. If North Shore has the time, he could try taking them to the small claims court and get his 5 minutes of fame.

[photofly]

Good lord! Does anyone actually read airline ticket contracts? I've no doubt for airlines that do this (I don't think it has actually happened to NS) like Ryanair etc, they have it in the terms and conditions all watertight.

I've just been looking for a concrete example of someone being surcharged for "throwaway ticketing" and can't find one, so perhaps it's just urban legend. There's comment online about people who do it repeatedly getting ruse letters from the airline saying it breaches their terms and conditions though.

I remember booking YYZ to LHR and the cheapest AC ticket was via somewhere like Halifax. But if you wanted to actually fly direct to Halifax that was a whole lot more. Meanwhile the cheapest ticket to Halifax was via Montreal. Etc. Etc.

[CpnCrunch]

Good lord! Does anyone actually read airline ticket contracts? I've no doubt for airlines that do this (I don't think it has actually happened to NS) like Ryanair etc, they have it in the terms and conditions all watertight.

It sounds doubtful that it would enforceable. This article suggests that at worst BA might penalise you on future flights, but it doesn't say anything about charging your credit card if you don't show up:

http://onemileatatime.boardingarea.com/ ... ticketing/

If you do this, you should probably be prepared to never fly with that airline again.

[valleyboy]

I thought this was a thing of the past. It was very common to pay more for a one way than a return fifteen years ago. I know I have done the very thing between LHR and GLA with no issues. SAS use to charge "J' class fares on "go show" passengers even when there was lots of room in "Y" class

I would suggest Ice Air. they seem to charge by the leg and it's a good ride, no service but good seat pitch.

[AirFrame]

Back in the late 90's it used to be fairly common to buy back-to-back tickets at the tech company I worked for.

If anyone doesn't know how that works, what typically happens is that a business trip needs to happen midweek, for only a couple of days. Buying a ticket to fly out on Tuesday, and back on Thursday, was mucho expensive. Buying tickets that would put you away from home over a weekend was well under half the cost. So you buy one ticket that departs Saturday, returning Thursday, and a second ticket that departs Tuesday, returns Sunday. The Saturday night stayover was the key.

Two tickets for a total price near half the price of a single Tues-Thurs ticket. Then you abandon the Saturday departure ticket, use the Tuesday departure ticket, use the Thursday return ticket, and abandon the Sunday return ticket. If you regularly flew to the same destination, you could use the unused tickets as credits with the airline at a later date, so frequently one half of the next back-to-back ticket set for the next business trip would be bought with these credits.

Now of course this has been pretty much locked out I understand... If you don't use your initial departure ticket, your return ticket isn't allowed I hear. It's been a while since i've travelled a lot for work...

[valleyboy]

Last summer I booked a one way on Iceland Air, with the idea I would use my ID travel to come back. There was no issue, the price was the same each direction, I later changed my plans and decided not to risk standby on the way home so a month later I went online and purchased another one way ticket to come home. Round trip costs YYZ-GLA return about $800 round trip. So it's out there.

[CID]

Your contractual obligation is very real. The airlines can and sometimes will send you a bill if you don't show up for the return. They are more likely to send you a bill if you choose to book a connecting flight but fail to show up for the second leg.

For example, you find that it's cheaper to book a connecting flight "through" the city you want to go than it is to book direct and you figure you'll just get off on the first leg. They really don't like that.

There are good reasons for airlines to structure fares like this. It's quite complex and there are many factors. They aren't just out to screw you.

[photofly]

There are no operational reasons for doing so. They don't for instance need your body weight as ballast, nor have an environmental problem disposing of food with which they need your help by eating. The aircraft won't have to take more fuel because your shit can't be pumped to the engines in your absence and the passenger who would have sat next to you won't write to the chief executive to complain that she had to endure an empty seat beside her because you didn't show.

I think you can sum up the "good reasons" and "many factors" as simply being because they make more money that way. They are out to screw you out of as much money as you're prepared to pay, but I guess that's ok - you're out to screw them by getting from A to B as cheaply as possible and in the case of a throwaway ticket, cheaper than they're prepared to fly you on that route.

[trey kule]

Airlines have an amazing computer booking program. Tickets can be priced based on everything from the the time of day, if you checked for prices earlier, your location in the city and even if your booking from a mobile device. It is all designed to extract the most dollars.(maximize revenue)

In Canada, Air Canada recently agree to refund some of the Ft Mac evacuees money. Seems their computer noticed a spike in demand and some
Tickets from Ft McMurray to Edmonton were in the thousands of dollars. The computer does not understand gouging and has almost a lower ethical threshold than the typical airline CEO.

As to buying tickets and only using parts of them...they have closed alot of those loop holes.
For example, Hong Kong with a layover in Vancouver and then on to Calgary, round trip, was cheaper than HongKong return to Vancouver. That is a computer programmed type of pricing.
But if you buy the longer ticket, and stop in Vancouver, you will not be able to return without a huge price penalty.



The consumer is pretty much at the mercy of these practices, and particularily when we allow location sourcing?

Lets face it. They have gotten us used to paying to take baggage. Being charged for everything you could imagine. Standing in lines for an hour to check in when half the CSR counters are empty.
We are sheep. They are smart. Bitch as we might, we will fly. And there is almost no difference. As soon as one airline finds a way to discover another surcharge, they all follow.

Pretty soon we will see the flight crew being surcharged for priority early boarding, or alternatively accepting lower wages..

[Rookie50]

And still some of them will go BK / restructure (again) in the next downturn.

Why? Horrible, horrible management.

Blatant?

Sure. You airline dudes out there -- which if any airline when oil dropped below $30, hedged future fuel costs 5-10 years forward? Anyone?

How about (big) flight schools for that matter?

This isn't rocket science. Other industries do this all the time.

[photofly]

I suspect lots of airlines, but no flight schools.

[Rookie50]

I suspect lots of airlines, but no flight schools.

I would look at that if I ran a big one. What an opportunity to hedge forward using gasoline futures. Imagine a big flight school uses their share annually.

[photofly]

Yes, although the option isn't free. You're taking a gamble against the market opinion that the fuel price will drop further. If the market opinion is that the price has bottomed and will rise then your hedge will be costly up front. And if the market was wrong and the price does go down further you are stuck with a higher price than you could have got. It's only in retrospect that the best course of action becomes clear.

What you do buy for your money is certainty of fuel price, which has its own value for future planning of course.

[trey kule]

Since fuel prices dropped, has the cost of aircraft rental (wet) at flight schools dropped?

One doesnt need to hedge if they have a fuel surcharge if fuel goes up and hold the price if it goes down. Unless the competition does it there is simply no need.

Have aircraft rental costs gone down in the last year? It would be interesting to see some numbers posted. I have been told that FTU's are getting almost as creative as the airlines with fees and surcharges.

[CID]

There are no operational reasons for doing so. They don't for instance need your body weight as ballast, nor have an environmental problem disposing of food with which they need your help by eating. The aircraft won't have to take more fuel because your shit can't be pumped to the engines in your absence and the passenger who would have sat next to you won't write to the chief executive to complain that she had to endure an empty seat beside her because you didn't show.

I think you can sum up the "good reasons" and "many factors" as simply being because they make more money that way. They are out to screw you out of as much money as you're prepared to pay, but I guess that's ok - you're out to screw them by getting from A to B as cheaply as possible and in the case of a throwaway ticket, cheaper than they're prepared to fly you on that route.

Yah I guess you're right. That's why airlines are always rolling in cash. None of them ever have financial troubles and they are excellent investments. They all get together and develop new ways to "screw" us so they can sit back and light their cigars with ten dollar bills. It's a good thing that the market is so gullible and easy to snag. Hardly no competition especially on those high traffic routes. And fuel? Don't let anyone tell you that it takes extra fuel to carry extra weight. NASA already knows that. Since the rocket is already going in to space, fill that sucker right up to the walls.

So, lots of profit, no competition, compliant and easy customers, stable fuel prices and absolutely no other considerations. Sounds like a great business to get in to. I'm going to buy a 737 and wade in to this thing. Nothing but money.

[co-joe]

Since fuel prices dropped, has the cost of aircraft rental (wet) at flight schools dropped?

One doesnt need to hedge if they have a fuel surcharge if fuel goes up and hold the price if it goes down. Unless the competition does it there is simply no need.

Have aircraft rental costs gone down in the last year? It would be interesting to see some numbers posted. I have been told that FTU's are getting almost as creative as the airlines with fees and surcharges.

Have fuel price actually dropped? It sure seems like the price at the pump just stays high regardless of what the barrel is doing nowadays?

As always CID you make me lol. See now that's how you combine sarcasm and truth.

[digits_]

And fuel? Don't let anyone tell you that it takes extra fuel to carry extra weight.

He's not claiming extra weight doesn't need extra fuel. On the contrary: if he doesn't show up for his round trip, it costs the company less money because:
- he already paid for the ticket
- he isn't flying, so they can either sell the ticket to someone else or fly the plane with a lower weight

and yet some of them still want to charge / fine him for not using the round trip portion of his ticket.


There is no "normal" cost based reason why a one way ticket is more expensive than a return ticket. The only reason is "because they can". Which really makes me wonder if/why all that stuff is actually legal. Imagine going to Ikea and see that 10 people bought the same couch, and you paid 3 times as much for one of them just because you bought it at a bad time. You could try the "all prices are confidentially negotiated" argument, but that isn't true at all, as all the prices are publicly accessible. Very weird...

[CID]

Imagine going to Ikea and see that 10 people bought the same couch, and you paid 3 times as much for one of them just because you bought it at a bad time.

That's an interesting comparison. A few weeks ago, I bought luggage at Sears. I bought three pieces for the price of one. It's called a "sale". That's what retail outlets call it when they sell something for one-third of the regular price just because I didn't buy it at a bad time. And let's discuss how retail outlets like Sears and IKEA can do that. Retail markup is typically 100%. That's right. You normally play double what the retailer buys it for.

and yet some of them still want to charge / fine him for not using the round trip portion of his ticket.

No. The expectation is that a buyer respects the contract of the sale. There are often limitations, rules and restrictions associated with the sale of pretty much anything. These are in place to protect both the buyer and the seller who may have other contractual obligations.

Like tickets to events. Reselling is often contrary to the contractual agreement. How about when you buy a house? You sign all the papers, the seller takes it off the market and then you have a sudden change of heart and withhold the funds. Not cool, and often subject to penalties. Same with hotel rooms. Ever book one and reserve it with your credit card? If you don't show you get charged for the room anyway. I could go on but It probably won't change your current worldview. You likely need a little more experience and wisdom to see the light.

[photofly]

Retail margins vary widely. In clothing, 30-40%. Restaurants, 300%. Supermarket groceries, 2-5% sometimes. White goods (washing machines and refrigerators etc) 15%.

Yield management is quite different to and easily distinguised from sale pricing. Retail discount sale periods are widely advertised, unlike confidential airline price management. Typically sale prices are lowered to stimulate demand, not (per airline yield management) raised when demand is high. Retailers who offer sale reductions often refund recent purchasers the difference between the price paid and the sale price. Sales are offered on older goods, so that prices drop with time. Airlines raise prices as travel dates shorten.

Also note that some airlines offer fake "sale periods".

Yah I guess you're right. That's why airlines are always rolling in cash. None of them ever have financial troubles and they are excellent investments. They all get together and develop new ways to "screw" us so they can sit back and light their cigars with ten dollar bills.

The fact that airlines are barely profitable is hardly a moral justification for their apparently bizarre pricing policies. Just because they're losing money doesn't mean they're not trying to gouge customers. If you think someone is a crook, you're unlikely to think them any more honest just because they're a poor crook instead of a rich one.

And fuel? Don't let anyone tell you that it takes extra fuel to carry extra weight. NASA already knows that. Since the rocket is already going in to space, fill that sucker right up to the walls.

Here you seem to be arguing against yourself. What the airlines are doing is charging more to carry you halfway into space which uses less fuel than all the way.

[digits_]

No. The expectation is that a buyer respects the contract of the sale. There are often limitations, rules and restrictions associated with the sale of pretty much anything. These are in place to protect both the buyer and the seller who may have other contractual obligations.

Allright, time for some examples.

Brussels - Winnipeg, random date with air canada
Round trip: 1771 CAD
One way (same departure date): 4778

What contractual obligations can they possibly have that it would warrant a 3000 CAD increase in the price ?? If I can't enter the country, then they would be responsible for my return flight. That does NOT cost 3000 CAD extra. On the contrary, by that logic, the one way trip should be the same as a return trip. There is no reason whatsoever why the one way tickets should be more expensive. The only reason they do it: BECAUSE THEY CAN.

Like tickets to events. Reselling is often contrary to the contractual agreement. How about when you buy a house? You sign all the papers, the seller takes it off the market and then you have a sudden change of heart and withhold the funds. Not cool, and often subject to penalties. Same with hotel rooms. Ever book one and reserve it with your credit card? If you don't show you get charged for the room anyway.

If you buy a ticket or buy a house and cancel or book something with your credit card, your "loss" will never be more than the original price you paid: cost of the ticket, 10% deposit on the house (or even more, but never more than the actual cost of the house).

However, if you buy a return ticket, decide to use it "half", for a one way trip, the airline could fine you, and charge you MORE than what you original paid for the round trip. Does that seem fair and logical to you ? What moral right do they have to do that ? Granted, most airlines don't do this unless you do it very often, but even if you want to do it every day, why should it be an issue ? You can go to a concert buy tickets and throw them away without penalty, you can buy houses and demolish them if you so feel like. But buying an airline ticket and not flying ? Ooooooh, that must be fined.

I could go on but It probably won't change your current worldview. You likely need a little more experience and wisdom to see the light.

How about you go on with examples that are actually applicable ? Examples where the seller charges you EXTRA when you already paid full price for their product and/or service and you decide not to use it. Good luck.

That's an interesting comparison. A few weeks ago, I bought luggage at Sears. I bought three pieces for the price of one. It's called a "sale". That's what retail outlets call it when they sell something for one-third of the regular price just because I didn't buy it at a bad time. And let's discuss how retail outlets like Sears and IKEA can do that. Retail markup is typically 100%. That's right. You normally play double what the retailer buys it for.

I can see you have a bit widsom and managed to learn the basics of retail. Good for you !

- Does the price of the product depend on what your nationality is ?
- Does the price of the product depend on how often you have visited the store ?
- Does the price of the product depend on what you bought at the store before ?
- Does the price of the product depend on wether or not your family members are buying something in the store as well ?
- If you buy the product and you give it to a friend, does the store send you a bill ?
- If you buy the product and you drive it straight to the dump, does the store send you another bill ?
- Does the sale end right as the customer before you checks out, yet is back 5 minutes after you leave the store ?

We're not the first ones to discuss this by the way:

If airlines sold paint

Customer: Hi. How much is your paint?

Clerk: Well sir, that depends on a lot of things.

Customer: Can’t you give me an approximate price?

Clerk: Our lowest price is our introductory special at $12 a gallon. After that we have dozens of different prices up to $199.

Customer: What's the difference in the quality of the paint?

Clerk: Oh, there’s no difference. It's all exactly the same stuff.

Customer: Well, in that case I'll take your $12 paint.

Clerk: Well actually the $12 variety is only available on our website. If you want to buy it here at the store you’ll be charged an additional $20 Customer Convenience Fee

Customer: So if I go home and get it off the website, its only $12?

Clerk: That’s correct sir - plus a Credit Card Usage Fee of $6 and then there’s standard Shipping and Handling of $15.

Customer: What? So in other words buying online would cost me almost exactly the same as what I’d have to pay here in the store?

Clerk: I suppose so, but if you buy it here you get to use it immediately. Online purchases take ten business days to get to you - unless you pay the optional $25 Express My Paint Fee.

Customer: You've got to be kidding me!

Clerk: Well no sir, but it’s academic anyway as right now the $12 paint is completely sold out in both places.

Customer: That’s BS. I’m looking at shelves full of the stuff!

Clerk: Ah, but that doesn't mean it’s available for sale. We sell only a certain number of introductory priced cans on any given day. Oops, look at that! It just became available again - at $17.50.

Customer: C’mon! You mean to say it went up while I’m standing here?!

Clerk: ‘Fraid so. Inventory control changes our prices all the time. I strongly recommend you purchase your paint as soon as possible as it could go up again. How many gallons do you want?

Customer: Well, maybe three gallons. No, make that four, I don’t want to run out. I assume I can return anything I don’t open?

Clerk: Certainly sir. The $12 paint is non-refundable, but if you return it within 48 hours you will be entitled to a $5 credit towards the future purchase of another gallon of the same color at the same or higher price.

Customer: That’s crazy. In that case I’ll just give any unopened cans to my brother as he’s planning to repaint his home soon.

Clerk: Sorry sir, no-can-do! Our terms and CANditions – that’s a little in-house joke – prohibit paint transfer. It is strictly for the use of the original purchaser.

Customer: But wait a minute, I hadn’t spotted those "Paint Sale - $9.99* a Can" signs over there? That sounds like a much better deal.

Clerk: Ah yes, that's from our low cost paint division. The asterisk denotes that the cans are actually half-gallons and the price is based on a minimum purchase of two. There is also an additional Environmental Fee of $5 per can, a non-refundable Can Deposit of $3.50, a Paint Facility Charge of $5 and if you want more than one color, the second has a $25 surcharge and the third is $50 extra.

Customer: This is utterly ridiculous. To hell with this! I'll buy what I need somewhere else!

Clerk: Well sir, you may be able to buy paint for some rooms from another store, but you won't be able to find paint for your connecting hall and stairway anywhere but here. And I should also point out that if you want Uni-Directional paint it is priced at $249 a gallon.

Customer: I thought your most expensive paint was $199!

Clerk: That's only if you paint non-stop all the way around the room and back to the point at which you started. Stairways and hallways are considered one-way exceptions to the rule.

Customer: So, if I buy the $199 paint and use it in my hallway what are you going to do about it - send some goons in to paint over it?

Clerk: Wow, I believe you're getting it now sir. But no, please, that would be plain silly. We'll simply charge you a Direction Adjustment Fee plus the difference to $249 on your next purchase.

Customer: Next purchase? No way! I’m out ‘a here

Clerk: At Skyhigh Paints we never forget you have a choice, so thanks for shopping with us. Have a nice day!

Most people already know this one, but still, it is very applicable here.