Why is 2x one-way fares cheaper than round-trip on Matrix?

Question

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)

One-way #2 (from NZ)

Round-trip

$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)

Answer 1

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.

Answer 2

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.

Answer 3

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.

Answer 4

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.

Answer 5

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.