Sunday, August 2, 2009

Why One-Way Tickets Cost More Than a Round-Trip

By Mike Grasso

Last week a reader forwarded me an itinerary in which the round-trip ticket price cost less than two separate one-way tickets on identical flights. It was an American Airlines flight between San Jose and Dallas/Ft Worth. The ticket prices out to $349 round-trip, but the exact same days and flights booked as two separate one-ways comes to $454 ($227 each way). "What gives?" the reader asked.

At play here is supply and demand. When most people fly somewhere, they usually need to come back, causing a demand for round-trip tickets. In response, you find many airlines fiercely competing in this market. One-way flights are less popular, and most mainline carriers don't compete, resulting in an upward spike in those fares. Although the supply of seats remains constant - regardless if sold as one-way or round-trip, the demand and competition exists for round-trips.

But there are exceptions. Southwest Airlines, for example, sells all their flights as one-ways. In response to this, you will find mainline carriers such as American and United offering equivalent one-way fares in markets they compete with Southwest in. Take San Francisco to Los Angeles, for instance. Southwest frequently sells this route for $49 each way. Other carriers flying between these cities match Southwest pricing, choosing not to bump up the cost of the one-way flight, as they would otherwise do on non-competitive routes.