Why is a single return ticket more expensive than separate tickets for the two sectors?

Upvote:4

TL;DR: It's complicated.

Here's the baseline scenario: Flights from A via B to C, operated by airlines 1 and 2. If you buy a ticket from A to B, airline 1 gets all the money; if you buy a separate ticket from B to C, airline 2 gets all the money.

To merge the two as a connecting A-B-C flight, there are three basic options:

  1. Interline. Two airlines agree to book each other's flights, transfer bags and guarantee connections, but set their own fares and keep them for themselves. This is the case for Lufthansa and Air Namibia, and the reason you're seeing a different price is that they've agreed on a set of fares that only apply when interlining.
  2. Codeshare. Airline 1 buys seats from airline 2 (or vice versa) at an agreed price X, sells them at price Y (which it is free to set), and earns Y-X. (Or, alternatively, just gives airline 2 a commission.) In this case, you're effectively buying the whole ticket from airline 1, who just happen to subcontract the operation of the B-C flight to another company.
  3. Proration aka revenue sharing. Airlines 1 & 2 agree not just to interline, but to split revenue on a deeper level, setting combined fares together and splitting the booty. These formulas are obviously secret, vary from company to company and can be horrifically complex, and depend on a whole host of factors like flight length, fare class, who sold the ticket, amount of competition on that sector etc. The extreme form of this is metal neutrality, where two airlines agree to sell the others' tickets exactly as if they were their own; effectively a merger in disguise.

Upvote:5

There is no "extra money". The BHX-FRA-WDH fare is priced as a single entity and represents just one of many different fares sold for any particular flight. No single fare class represents "The Fare" for that flight, they are all calculated using formulas that are designed to: fill the plane, cover costs of operations and make a profit.

So they aren't charging you more because they provide something extra, they are charging you more because that ticket falls into a different (more expensive) fare basis. With a few exceptions, a seat in economy gets the same services irregardless of what price you paid.

jpatokal covered the basic methods of revenue distribution, but for that flight the revenue is based on what Lufthansa's and Air Namibia's prices are for that particular fare class. The fact that other lower prices are offered on the same flight does not come into play when calculating revenue distribution for that particular ticket.

More post

Search Posts

Related post