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I'm searching for flights to NZ and back for some time in Feb-Apr next year. I've been using Matrix to find suitable dates and prices, however I ran into something that I thought was odd - the prices for round-trip were about $400NZD higher than for the two one-way flights.

I found suitable one-way flights in each direction and tried to replicate those flights into a round-trip search. The same flight (same date, times, flight numbers, airline), but 2x one-way (there and back) were considerably cheaper per person than the same flights as round-trip.

One-way #1 (to NZ)

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One-way #2 (from NZ)

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Round-trip

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$980 + $608 = $1588 total round-trip price (separate tickets) vs $1973 round-trip price (combined tickets). That's 20% cheaper!

What am I missing here? Usually RT works out cheaper I thought, but this is a considerable saving (especially considering there are 6 of us traveling - and yes my searches were accounting for 6 travelers)

Midavalo
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    This may be due to different ticketing cities. Normally the ticketing city is the one where the first flight originated, so in your case it’s LAX for the first one-way and for the return flight, while it’s AKL for the other one. Air Tahiti Bui lay have decided that prices in NZ are cheaper than in the US (or there may be some government scheme involved). A bit surprising for this combination of countries, but nothing is impossible. It may also be an issue with taxes. Can you get the fare breakdown in all three cases? – jcaron Oct 25 '22 at 21:49
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    @jcaron Matrix allows you to select ticketing city, so I did and had them match for all three of the above searches. I had selected between 4 ticketing city options to see if one in particular was cheaper, and I used that one city for all the subsequent searches – Midavalo Oct 25 '22 at 21:55
  • Related question about the converse: Why are one-way plane tickets more expensive than return tickets? – V2Blast Oct 27 '22 at 01:14
  • You know what they say: all models are false, but some are useful. That's true of the efficient market hypothesis. It's often useful to think of the market as having no odd, irrational pricing inversions, but the world just ain't like that -- things change more quickly than can be corrected by enterprising arbitrageurs. (Consider what you would have to do to be able to take large-scale advantage of this particular price inversion: you'd have to yourself be a popular flight arrangement entity, a status which you won't be able to arrange before this inversion disappears.) – Daniel Wagner Oct 27 '22 at 13:59
  • Are the change fees and refundability the same on both tickets? – user71659 Oct 27 '22 at 22:43
  • @user71659 I had assumed so, being the same class but I hadn't actually looked any further than the Matrix search result so I don't know for sure – Midavalo Oct 27 '22 at 23:02
  • @user71659 Yes, they are. From memory $100 change fee and $250 cancel fee on both. And both booked into class 'O' so availability would have been the same too. – Doc Oct 28 '22 at 14:13
  • Easy. If they cancel and refund your outbound trip, your return trip is non-refundable. If you booked the more costly round trip, then they would have to refund the whole shebang. – Harper - Reinstate Monica Oct 28 '22 at 23:24

5 Answers5

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What am I missing here?

You are trying to apply logic to flight prices, which these day is dicey. With their dynamic pricing systems and extremely convoluted fare classes and construction rules the airlines have created a veritable mess.

I've certainly seen (and booked) business class that was cheaper than economy, premium economy that was cheaper than economy basic, etc. There is no logic or simple rules: the airline deploys algorithms that try to determine what price they can get away with. If the algorithm determines that the market price for two one ways is lower than a rountrip, they will price it as such. Sometimes that works to your advantage, sometimes it doesn't.

Hilmar
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Firstly, I would suggest going and reading this answer. It's actually for the exact opposite question to what you're asking, but the background in the answer will leave you clued up to understand what's happening.

In this case, if you look at the fare that's being used when you select the one-way AKL-LAX flight (fare class OLOWNZ) it includes the rules :

   ROUND TRIPS/CIRCLE TRIPS NOT PERMITTED.
   END-ON-END NOT PERMITTED.

Thus this fare can only be used when booking a one-way trip. You can't use it for a "round trip", or a "circle trip" (think a triangle with 3 cities).

If you look at the fare being used for the more expensive round-trip option (fare class OLEEUS) the fare rules include :

     CIRCLE TRIPS NOT PERMITTED.
   END-ON-END NOT PERMITTED. SIDE TRIPS PERMITTED.

However there is no mention of round-trips, so this fare can be used for a round-trip. (It could also be used for a one-way trip, but given there's a cheaper fare available it generally would not be).

Whilst it's common for an airline to have round-trip only fares (fares that can not be used for one-way flights) as a way of making round-trips cheaper than two one-way flights, it's uncommon to see a flight marked as one-way only as the first fare here is.

It's possible that this is a mistake, however given that the OLOWNZ fare explicitly disallows return trips I'd say that's unlikely. More likely the airline has a specific reason for offering the flights at these prices, with the expectation that most people would simply book the more expensive return flight. I wouldn't even like to guess at what those reasons are...

As was mentioned in a comment, the 'sales city' can also play a part when searching like this - although in this case you've set it to be the same for each search. Airlines can and do change prices based on the country where the ticket is purchased (often referred to as the 'point of sale'). By default, Matrix uses the origin city as the point-of-sale, so for your return flight option it would use the US (LAX) for both legs, but for the two-one-way option it would use the US for the first, but New Zealand (AKL) for the second. If the NZ prices were significantly cheaper, that could also lead to something like what you're seeing - however it's not the case here due to you forcing the 'sales city' field in Matrix to be the same for all searches.

Doc
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    Fascinating! I have never heard of such a rule. I wonder how it would stand up in court that one cannot combine two o/w tickets into a return ticket... – user2705196 Oct 27 '22 at 14:47
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    @user2705196 It means the fare cannot be used as part of a round-trip ticket. It doesn't mean you can't buy two single tickets. It only affects ticketing and pricing. It's like saying you can only combine a burger and a soda to make a value meal at a restaurant, you can't combine two burgers. – user71659 Oct 27 '22 at 22:41
  • Thanks for the clarification! – user2705196 Oct 28 '22 at 14:48
  • Who dictates these rules? How are they enforced? What happens if I do break them? How do they know if I actually broke them? If I buy a one-way trip but I plan on coming back eventually, how do I avoid breaking the rule? – AgentRev Oct 29 '22 at 01:40
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    @AgentRev They are the rules use to create the ticket pricing. You can't "break" them as such - the pricing is automated by the airlines ticket systems based on these rules. – Doc Oct 29 '22 at 04:26
  • Ah I see, so the rules apply only to the shopping cart, but not the shopper itself hehe – AgentRev Oct 29 '22 at 04:33
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Consider the prices:

  • LAX -> AKL: NZ$980
  • AKL -> LAX: NZ$608
  • LAX -> AKL -> LAX: NZ$1973

While it is impossible to know the true reasons, a reasonable explanation would be that there is higher demand for flights LAX -> AKL in February to April season. The flight AKL -> LAX would then have empty seats, which it makes sense to sell at a lower price.

A round-trip ticket does nothing to resolve the imbalance between flight directions, so it has no advantage for the airline and they don't discount it. They expect to sell enough tickets to fill the LAX -> AKL flight at the higher price.

jpa
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I'll point out that a round-trip ticket shifts the risk of some events to the airline.

For example, if your outbound flight is significantly delayed, rescheduled, or cancelled, you would be able to cancel the entire round trip and receive a refund in accordance with laws and airline policies. If you booked two separate tickets, the return leg would be treated as a voluntary cancellation, and you'd pay fees or potentially lose the entire value of the ticket.

Thus, the airline has greater financial exposure on the round-trip ticket.

user71659
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  • I can see that, especially for a short trip, say 7 days, where delays or cancellations could be drastic. But in my case we're talking something like 67 days between flights :) – Midavalo Oct 27 '22 at 22:51
  • Also the cancelation fee is $250, so you'd still end up in front even if you did have to voluntarily cancel one direction! – Doc Oct 28 '22 at 02:37
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Flight ticket prices do not need to follow any logic that would be derived from the self-cost of transportation.

In the past I had a ticket Vilnius to Manchester through London that was cheaper than just Vilnius to London. I have seen one way tickets more expensive than return tickets (same flight, same class). There is obviously some specific with the fligt ticket prices that gives managers significant freedom how much to charge.

The reason why is, the manager thinks, correctly or not, that more money can be extracted this way.

Nightrider
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  • These extra stop cheaper tickets are or were the norm for many destinations, allowing a bigger airline to sell more tickets to their hub airport. And to fill their short hop flights to the smaller airport. – Willeke Oct 26 '22 at 07:45