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pterjan's diary


  Plane Ticket Prices

To attend a wedding in Burkina Faso in February, I booked plane tickets today.

I won't complain that the return ticket went from 745 to 779 overnight while I was waiting for my salary, I always expect such increases.

What I really do not understand is why adding another flight makes the total price cheaper!

Here are 2 Air France prices:

22 February CDG 16h10 -> OUA 20h45 Flight 730
 1 March    OUA 23h25 -> CDG 05h50 Flight 735
Total price: EUR 864
22 February LHR 12h50 -> CDG 15h00 Flight 1281
22 February CDG 16h10 -> OUA 20h45 Flight 730
 1 March    OUA 23h25 -> CDG 05h50 Flight 735
 2 MArch    CDG 07h30 -> LHR 07h50 Flight 1080
Total price: EUR 779

Does someone have an explanation ? The prices are different on other days but always cheaper if I add flights between Paris and London

Today's TSUKKOMI(Total: 23) [Add a TSUKKOMI]
  . (2009-10-01 21:13)

Easy: Air France figures that people going CDG->OUA are booking them because starting from CDG it's the obvious choice. The additional people from LHR are extra business. The same happens to dairy products such as youghurt: It get's cheaper if it comes from a place further away. It's the stupid economy!

  Jef Spaleta (2009-10-01 21:48)

A couple of factors:<br><br>A plane costs a fixed expense to operate regardless of the number of people who fly on the plane for the most part. If there is a route that is only partially full with normal commuter traffic, its better for them to get you on the flight as a discounted leg in a multi-flight journey than to lose you as a customer.<br>Each ticket taken individually does not have to be maximally profitable. <br><br>Airline ticket prices are quite fluid and are driven primarily by demand. Ticket prices can be quite time sensitive as well. There are no set ticket prices for airline tickets. Some routes are in high demand and the price per ticket is lifted based on that demand for the given number of seats on the plane. This is a double positive impact on profitability. These flights tend to be full(er) and people on those flights tend to pay more per seat. Popular long distance non-stop routes are good examples of these high demand flights. <br><br>Lower priced alternative routes with more stops and longer door-to-door time are not as profitable in themselves..but they exist at a different point in the demand curve and actually act to reinforce the premium prices being paid for the higher demand direct flights. Not only that but they act as a sort of release valve for demand. A spectrum of value choices that weigh convenience with price is a more attractive service overall.<br><br>What matters is the integrated profitability for the available choices on the demand curve that Air France is offering. By given you a choice between a lower cost trip that takes significantly longer and a more expensive direct flight that shaves off several hours from your travel...they are actually maximizing profits even if they take a loss some of the time when people choose significantly cheaper tickets.<br><br>-jef

  Pascal (2009-10-01 22:09)

Well in this case, they have no direct flights except from Paris. This is not an alternative, this is either plane A or plane A + plane B, so I don't see why they would prefer to sale plane A + plane B cheaper than plane A alone.

  Olivier Crete (2009-10-01 22:43)

I think that their algorithm assumes that if you buy a ticket from London, then you're flying from london. So from there, maybe you could fly BA or some other airline for a lower price...

  tuXXX (2009-10-01 22:50)

It's maybe a stupid algorithm used to compute the final price. Something like "if this is not a direct flight, use a little discount, because it's not considered the premium flight".<br>Since the London <-> Paris flight is not that expensive, adding it would give a cheaper total price.<br>Something like: (X + Y) * 90% < X, with X the Paris <-> Burkina Faso flight, Y the Paris <-> London flight, and 90% the rebate you have by doing non-direct flight.<br>(Note that the real algorithm is maybe X + Y < 110% * X, but the overall result is similar)

  Pascal (2009-10-01 23:32)

Given the numbers it would be (X + Y) * 77% < X :)

  Adam Williamson (2009-10-01 23:47)

I've had similar experiences looking up flights from Vancouver; a flight from Seattle -> Vancouver -> Washington DC was cheaper than just the flight from Vancouver -> Washington DC.<br><br>The worst part is you can't just book the stupid overcomplex flight and not show up for the first leg. If you don't show up for any leg, even if you tell them why, they cancel the entire journey.

  Jer (2009-10-01 23:48)

They're just trying to make more money from low-demand flight routes. The extra flights in the longer itinerary probably aren't normally full (so they get to squeeze a bit more money out of those flights by putting you on them), and at the same time they've freed up a seat on the high-demand direct flight which they know will fill up anyways. Thus they get paid to fly more people from point A to point B without adding additional flights.

  Pascal (2009-10-02 00:03)

Jer, there is no direct flight :)

  Hub (2009-10-02 00:19)

I have seen worse, with Air Canada.<br><br>CDG -> YUL -> YVR was *cheaper* that YUL -> YVR (both with return, and the YUL -> YVR segment was the *same*)<br><br>CDG = Paris Charles-de-Gaulle.<br>YUL = Montreal<br>YVR = Vancouver<br><br>(Hint: Air Canada has a quasi monopoly on domestic flights, and Air Canada gives you the domestic leg for a transcontinental flight)

  tf (2009-10-02 09:16)

My guess would be that the airport tax at CDG is greater than at LHR (iirc, you do not pay airport tax when in transit). As for the LHR->CDG flight, you are very likely getting that for free, big airlines often do that with short connecting flights to their primary hub. (BTW, if you buy the LHR ticket, you will might not be allowed to start the flight from CDG.)

  Pascal (2009-10-02 09:20)

Yes I know, I will spend the week end in UK and really start from LHR :)

  aapgorilla (2009-10-02 20:41)

small tip: I noticed with some airlines that when you check and come back later the price goes up but you try from a different IP and the price is low again! (clearing cookies/browser cache didnt work)

  aapgorilla (2009-10-02 20:50)

Regarding airline ticket prices, it's a very vague deal. All tickets are sol by the IATA which has set prices for all to->from (for all ticket types) destinations. Airlines are not actually allowed to offer direct discount or lower prices to customers but they are allowed to give discounts to travel agents, who in turn can give a part of the discount to travellers.<br><br>What does tell me, airline ticket prices are shady business....

  waldo (2009-10-06 14:31)

isn't that obvious? it's called capitalism, or supply & demand. Would you prefer flying non-stop or flying with a stopover? Of course you'd prefer flying non-stop, and hence this will be the more expensive option.<br><br>The airlines subsidize indirect flights so that they can can compete with direct flights offered elsewhere.

  John (2009-10-06 14:42)

waldo: take a closer look at the two flight lists, and maybe the other comments.<br><br>aapgorilla: interesting tip about IP addresses, I guess I shouldn't be surprised.

  Joe (2009-10-06 16:00)

There are a few different factors in determining the ticket price:<br><br>(1) different fare classes<br>(2) supply and demand<br>(3) perceived value<br><br>For (1), although there may be only Business and Coach cabins, the seats in each of those cabins are divided up into multiple (and sometimes overlapping) fare codes, and airlines are constantly shifting the availability of those seats between those codes. One big different in fare codes is refundable versus non-refundable tickets. Others are "advanced purchase" -- ie, more than 2 weeks in advance. This is because the airlines have found over the years that leisure travelers book way in advance and are less likely to pay a high fare. Business travelers book with less time and are often forced to pay a much, much higher fare.<br><br>For (2), that's a pretty obvious one. If other airlines offered nonstop flights (nonstop != direct, technically) then they would likely be cheaper.<br><br>(3) is a little more nebulous, but there is a premium placed on nonstop flights as opposed to ones with stopovers. It's difficult to compare different markets (LHR -> OUA vs. CDG -> OUA) but flights to OUA with stopovers from CDG are likely cheaper, as are flights which depart at 6am, etc.<br><br>What it ultimately boils down to is: what does the airline think people will pay for the flight? There is no algorithm in place for devaluing the flight because it is or isn't a direct flight. From the airlines' point of view, LHR -> OUA is a completely different market than CDG -> OUA and don't relate to one another. If they found that they were booking a ton more tickets LHR -> OUA than CDG -> OUA (maybe because people are taking the train?) then it'd likely become a supply-and-demand issue and the prices would rise, possibly above CDG -> OUA nonstop.

  Joe (2009-10-06 16:06)

One other thing: the prices of the individual legs is probably also a factor. If people are willing to pay €779 from LHR -> CDG -> OUA, that drives demand of the LHR -> CDG leg up, and they can charge more money for seats on that shorter and probably much cheaper flight.<br><br>It's possible that the airline already makes quite a bit of profit on the CDG -> OUA leg at either the €779 or €864 price point. If the demand created on the LHR -> CDG leg drives prices from a €150 to a €200 average price point, then they'll happily make that tradeoff.

  Joe (2009-10-06 16:12)

@aapgorilla - The IP address really has nothing to do with it. These days most fare search engines are able to query the airline directly for availability in different fare codes. This data can and does change in real time at the whim of the airline, although often it is because someone else booked a ticket in the meantime. (This is opposed to both the flight schedule and the different prices in fare codes, which change a few times per day.)<br><br>@Adam, it's true that you can't start at a midway point in your journey, but you can abandon the final legs as long as you didn't check any baggage. Sometimes you can even get a voucher for that leg if you call them ahead of time and say you won't make it. Abandonment can have other issues, though. You might not get credit applied to a frequent flier program, for example. But this tactic is very common among travelers going between many different cities.

  Marcus (2009-10-19 20:12)

One possibility is airport fees. You pay airport fees where you take off and land I believe. Some airports have much higher fees than others.

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