Airline companies are really, really shifty

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I was looking, out of pure curiosity, at the price for a Budapest to Rio de Janeiro business class roundtrip flight. It's around $3,000, and it has a stop at London Heathrow.

So I figured, "It must cost less if I were to take the flight directly from London". It turns out I'm wrong, and by huge margin!

The same flight, on the same day and hour, from London Heathrow to Rio de Janeiro, costs $4600. That's 50% more expensive, and it doesn't even include the Budapest to London flight!

I looked online and found a good explanation: Why Does My Connecting Flight Cost Less Than a Nonstop? (Ask Cranky) | The Cranky Flier

Now, I knew that airlines have different tactics to maximize their profits, like overbooking, knowing that a part of the passengers will miss the flight, but I didn't think they'll go this far.

I wonder if it's possible to book the cheaper flight, the one with connections, and just show up at London Heathrow for the second flight.
  • Profile picture of the author reln
    There was a recent case (Why is United Airlines suing a 22-year-old? - Dec. 29, 2014) where someone is being sued by United for taking advantage of those connecting flights to help people save money. You get a connecting flight which is cheaper and you simply dont get on the last leg of the flight.

    My family had to take an international flight overseas with a stop over in London. They decided to turn the London component into a week vacation before continuing on to Canada. They essentially got a free flight to London by flying a connecting flight.
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    • Profile picture of the author seasoned
      Originally Posted by reln View Post

      There was a recent case (Why is United Airlines suing a 22-year-old? - Dec. 29, 2014) where someone is being sued by United for taking advantage of those connecting flights to help people save money. You get a connecting flight which is cheaper and you simply dont get on the last leg of the flight.

      My family had to take an international flight overseas with a stop over in London. They decided to turn the London component into a week vacation before continuing on to Canada. They essentially got a free flight to London by flying a connecting flight.
      That jerk KNEW he was violating contracts! He wants us to believe he was the ONLY one in history to notice that. HECK, I noticed it a long time ago. The travel agencies have ALSO!

      The problem is that the airlines could give you some trouble AND, if you do the London trip, as you indicate, at least they THREATEN to CANCEL the return leg. So you fly TO London, fail to fly to Canada, and they cancel the entire flight FROM London.

      HECK, I once came up with the idea of STRADDLING flights, to lower the cost of subsequent flights. I certainly wasn't the first to come up with it. Sometimes that simply MUST happen, and I saw no statements against it, but a travel agent told me THAT wasn't allowed either.

      At least US airlines don't recognize THEIR obligations in contracts, but they have NO resistance to acting against YOUR violations of it. As for THEIR obligations, I guess we are lucky that the FAA and the federal government have a LITTLE bit of a leash on them.

      I can't explain WHY the prices are so bad, but there are likely reasons. SUPPOSEDLY they often don't make that much per flight, and sometimes LOSE money! Fuel and support costs a FORTUNE. And don't get me started on the salaries, DUMB requirements, and pensions.

      I have had flights where just the AIRPORT TAX was 200% of the flight price! YEP! So a $100 flight has $200 in AIRPORT taxes, and you end up paying $300, for the ticket! Do any of these people talk about THAT?

      Anyway, I would hate to be stranded because of a cancelled flight, like above. I HAVE straddled some flights, but only because it could happen by accident, etc.... ALSO, ironically, earlier corporate rules(From companies I worked for) FORBID straddles, etc...!

      It would be interesting if an airline SERIOUSLY went to a fair pricing strategy.

      Steve
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  • Profile picture of the author yukon
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    I read a news story where United Airlines and Orbitz are suing the guy that owns skiplagged.com

    The website is supposed to be able to find discounts on air travel where you have your destination wherever the layover is located.
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    • Profile picture of the author seasoned
      Originally Posted by yukon View Post

      I read a news story where United Airlines and Orbitz are suing the guy that owns skiplagged.com

      The website is supposed to be able to find discounts on air travel where you have your destination wherever the layover is located.
      NOPE! That is the guy we spoke about earlier. He DOESN'T try to find discount flights. He finds flights that are somewhat reasonably priced to go to a layover city, that the purchaser wants as a destination, and then they can buy the whole flight, taking only PART of it. The problem is NOT that they are "finding discount flights", but that they are encouraging people to violate contracts.

      According to that crankyflier site, this is a necessity play, where they bilk those that NEED to fly to a popular destination, to get the other people a fare THEY like. If true, I DISLIKE the bilk part, especially since I am one in that group and all, but if true, and a site like skiplagged took off, the OTHER flights would just go up in price.

      Steve
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      • Profile picture of the author yukon
        Banned
        Originally Posted by seasoned View Post

        He finds flights that are somewhat reasonably priced to go to a layover city, that the purchaser wants as a destination, and then they can buy the whole flight, taking only PART of it.
        I basically said the same thing, only with less enthusiasm.
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        • Profile picture of the author seasoned
          Originally Posted by yukon View Post

          I basically said the same thing, only with less enthusiasm.
          WOW, the whole tone changed when you pulled that statement out. I'm going to have to consider that next time. My point is that he is encouraging them to violate terms to maybe get it cheaper, rather than legitimately getting it at a discount.

          Steve
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          • Profile picture of the author yukon
            Banned
            Originally Posted by seasoned View Post

            WOW, the whole tone changed when you pulled that statement out. I'm going to have to consider that next time. My point is that he is encouraging them to violate terms to maybe get it cheaper, rather than legitimately getting it at a discount.

            Steve
            No tone, just some article I read on Google News. Next time, lol?

            If the layover discount wasn't legal the airline wouldn't keep allowing it to happen. They don't care enough to make changes on their end.
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  • Profile picture of the author Alexa Smith
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    Originally Posted by Lucian Lada View Post

    Airline companies are really, really shifty
    I agree completely: it's really, collectively, a very shifty industry indeed.

    (I suppose, to some extent, in their "defense", it can also be mentioned that it's not a particularly profitable industry, that many "national air carriers" don't make profits at all, and that the public demand for cheaper and cheaper flights is basically insatiable. It has some similarities with the catering and restaurant industry, too, in that it's sometimes difficult to maintain quality and safety, given the inexorable public pressure for low prices.)

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    • Profile picture of the author seasoned
      Originally Posted by Alexa Smith View Post

      I agree completely: it's really, collectively, a very shifty industry indeed.

      (I suppose, to some extent, in their "defense", it can also be mentioned that it's not a particularly profitable industry, that many "national air carriers" don't make profits at all, and that the public demand for cheaper and cheaper flights is basically insatiable. It has some similarities with the catering and restaurant industry, too, in that it's sometimes difficult to maintain quality and safety, given the inexorable public pressure for low prices.)

      .
      Yeah, at least in the US, the seats are even getting smaller, and seats aren't the same size. Service is HORRIBLE! They USED to offer peanuts in economy and often some snack in first class, and had free non alcoholic drinks planewide, and free alcoholic drinks in first class. Today, FORGET IT! You want peanuts? MAYBE you can BUY some peanut m&ms or a snackbox. Both cost perhaps $5. They used to have free first checked bags, they don't anymore.

      I don't know about other countries, but Irelands "ryan air" is apparently WORSE! Ryan Air is supposed to be THEIR version of Southwest BUT, last I knew, Southwest was pretty good and CHEAP!

      Still, they aren't like they were in the 1960s. I had memories of the flights I was on in the sixties, and they seemed like a scifi flick! They would be SO foreign today. Well, I have since seen documentaries and commercials from that era that show detail JUST LIKE I REMEMBERED! But apparently they charged a LOT back then. And gas, and labor were cheaper then! ALSO, as I recall, the carts were PLASTIC back then. I remember asking why they had all these holes in them, and the flight attendant said it was to cut down on weight. TODAY, for whatever reason, they are METAL. As for the technology and all? It improved a bit, but is largely IDENTICAL. ALSO, planes were allowed to go FASTER back then!

      Steve
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    • Profile picture of the author whateverpedia
      Originally Posted by Alexa Smith View Post

      (I suppose, to some extent, in their "defense", it can also be mentioned that it's not a particularly profitable industry.
      Huge CapEx* requirements + wafer thin margins + intense competition = avoid as an investment.

      Or, as Sir Richard Branson put it when being asked "What's the best way to become a millionaire?"

      Become a billionaire, then buy an airline.

      *Capital expenditure (the cost of buying planes).
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  • Profile picture of the author rondo
    It's certainly an odd pricing system and it has been for many years. I try to use it to my advantage and have enjoyed a number of 'bonus' flights and stopovers this way, especially in the USA.

    Also keep in mind that London has very high Air Passenger Duty rates compared to other places. You can save $100s by flying in and out of nearby cities eg Paris.

    Andrew
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    • Profile picture of the author Alexa Smith
      Banned
      The pricing is bizarre, looking at it superficially. I suspect that even looking at it in depth, and "understanding the industry", it's still pretty bizarre.

      I can fly from the North of England to Amsterdam (45-50 minutes flying time) on a "budget airline" with proper planes for a price that's so low the sandwiches and drinks you buy on board cost about the same as the ticket. Or I can travel half an hour later and fly with KLM (Dutch national airline) and pay three times as much for the ticket. Apart from the price, the other catch is that with KLM the plane is a poxy little "City Hopper" (my father calls it a "toy airplane") and if there's much wind or snow, in the winter, it doesn't even take off for a few hours until the wind drops because it can get blown away (so you never know whether you'll catch your connecting flight out of Schiphol, if you have one). I swear they do it just to make life difficult for people.


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      • Profile picture of the author seasoned
        Originally Posted by Alexa Smith View Post

        the other catch is that with KLM the plane is a poxy little "City Hopper" (my father calls it a "toy airplane") and if there's much wind or snow, in the winter, it doesn't even take off for a few hours until the wind drops because it can get blown away (so you never know whether you'll catch your connecting flight out of Schiphol, if you have one). I swear they do it just to make life difficult for people.
        .
        GEE! You guys are NICE! In MY neck of the woods, we call them PUDDLE JUMPERS! I see that as something smaller. STILL, they tend to have like 40 seats or more, IIRC.

        Of course the SMALLEST plane I flew on in the last 35 years was to tirstrup! You see, I wanted to fly to AARHUS, Denmark, but they have a tiny airport there and can't take even a NORMAL puddle jumper, apparently. BTW the LOUSY "travel agents" in the US don't even know how to get to what most people call denmark! They haven't the SLIGHTEST idea. So I took SAS, which flew from LA to Copenhagen(Actually an island that is kind of isolated.), and luckily they DID have the flight to tirsdrup. I checked ahead of time only because my danish aunt told me what to look for. But MAN, I was in a tiny bus station like area. The pilot went out, fueled his jet, and we boarded and flew out. I got there in like 30 minutes, instead of the like 3 hours the ferry would take.

        Steve
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  • Profile picture of the author rondo
    Here's another example I discovered recently. Say I want to fly Sydney to Honolulu. 9 hrs direct.
    For some reason it's usually cheaper to fly Syd-LA or Syd-SFO and then fly all the way back to Honolulu.
    (SFO = San Francisco)

    So you're getting a free trip to LA or SFO.
    Or you can look at it another way: Fly to LA or SFO and you get a free trip to Hawaii!

    Andrew
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    • Profile picture of the author whateverpedia
      Originally Posted by rondo View Post

      Here's another example I discovered recently. Say I want to fly Sydney to Honolulu. 9 hrs direct.
      For some reason it's usually cheaper to fly Syd-LA or Syd-SFO and then fly all the way back to Honolulu.
      (SFO = San Francisco)

      So you're getting a free trip to LA or SFO.
      Or you can look at it another way: Fly to LA or SFO and you get a free trip to Hawaii!

      Andrew
      It's not just international flights that do this.

      A few years ago while I lived in Sydney, I wanted to book a flight from Sydney to Perth to attend my Mum's 70th birthday.

      A direct flight cost twice as much as taking one that went via Brisbane!!!!!

      (For non-Aussies have a look at a map of Australia to see how much sense that makes.)
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      • Profile picture of the author Lucian Lada
        Originally Posted by whateverpedia View Post

        It's not just international flights that do this.

        A few years ago while I lived in Sydney, I wanted to book a flight from Sydney to Perth to attend my Mum's 70th birthday.

        A direct flight cost twice as much as taking one that went via Brisbane!!!!!

        (For non-Aussies have a look at a map of Australia to see how much sense that makes.)
        It's not even that bad. It would have been much worse if you were flying from Adelaide and had a connection in either Sydney or Brisbane.
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      • Profile picture of the author seasoned
        Originally Posted by whateverpedia View Post

        It's not just international flights that do this.

        A few years ago while I lived in Sydney, I wanted to book a flight from Sydney to Perth to attend my Mum's 70th birthday.

        A direct flight cost twice as much as taking one that went via Brisbane!!!!!

        (For non-Aussies have a look at a map of Australia to see how much sense that makes.)
        One thing that is interesting is that the usual airline retort, in the US, is that they sell only so many seats at a set price. So the theory goes that the later you buy, the more it costs. Of course, they charge for seatless flights, but they may not honor them. Clearly, they have a lot of other weird things going on.

        Steve
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        • Profile picture of the author Richard Van
          Pricing is one thing that's shifty, flying without permission to fly is quite something else.

          Report: AirAsia did not have permission to fly doomed route | Fox News
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          Wibble, bark, my old man's a mushroom etc...

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          • Profile picture of the author kilgore
            Maybe I'm the only one, but I don't find airline pricing shifty. Annoying, yes. Frustrating, absolutely. But not shifty.

            What it is is revenue maximization through price discrimination. And no, I'm not talking about discrimination based on race, gender, sexual orientation, etc. Price discrimination is simply selling the same or a similar product at different prices in different situations. And it's a lot more common than you may think.

            Price discrimination can take the form of discounts, such as student discounts, senior discounts or military discounts. Happy hour, matinee movie tickets, black friday sales and coupons are other forms of price discrimination. Vanity liscense plates? Price discrimination. Paying more for pharmaceuticals in the US than in most other countries? Price discrimination. The same internet service costing differently in different parts of the country? Price discrimination. Gas prices from the same company being different a mile away? Price discrimination.

            The thing to remember is that pricing has very little to do with cost. For instance, when we've priced the few products we've developed for our business we set our prices largely based on what the competitors are charging for similar products; what we don't do is figure out how much the product costs us and then simply add $9.99 to each price. Sometimes we might make $3 on something, sometimes $13. Basically, we earn what the market will bear. In our case, if the price falls below the cost, we can pretty easily stop producing that product. But airlines don't have this luxury as their schedules are set months in advance.

            Personally, I think the airlines' biggest problem is one more of optics than what they're actually doing. If they could say that a flight from New York to Los Angeles costs $500, but that they'd give you a discount of $100 if you were willing to have a stop in Chicago, people would be a lot happier than them saying a flight to L.A. stopping in Chicago costs $400 while the direct flight costs $500.

            People love a discount but they don't want to be taken for a ride.
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            • Profile picture of the author seasoned
              Originally Posted by kilgore View Post

              Maybe I'm the only one, but I don't find airline pricing shifty. Annoying, yes. Frustrating, absolutely. But not shifty.

              What it is is revenue maximization through price discrimination. And no, I'm not talking about discrimination based on race, gender, sexual orientation, etc. Price discrimination is simply selling the same or a similar product at different prices in different situations. And it's a lot more common than you may think.
              YEAH, I once complained about high prices, and someone showed me an ad CLAIMING I was wrong! In BOLD LETTERS, it discounted what I just said. I read it for a minute or two, and pointed to the fine print. I said SEE!?!?!?!? It said I was right. the article basically said that like Tuesday and Wednesday were the ONLY valid days. WHY? Could it be that most outsourced people fly in sunday to Monday, and leave Thursday to Saturday? BTW interestingly, they don't ask race, and orientation wouldn't make sense. Even for gender, people would be up in arms, but it generally makes no difference. But you're right, there IS discrimination. They may CLAIM it is about demand, but that is BULL! The ad I spoke of talked about MONTHS in advance. Most planes, in the US at least, don't really start selling seats until about 3 weeks before the flight.

              Price discrimination can take the form of discounts, such as student discounts, senior discounts or military discounts. Happy hour, matinee movie tickets, black friday sales and coupons are other forms of price discrimination. Vanity liscense plates? Price discrimination. Paying more for pharmaceuticals in the US than in most other countries? Price discrimination. The same internet service costing differently in different parts of the country? Price discrimination. Gas prices from the same company being different a mile away? Price discrimination.
              You have THAT right. The idea that a student in a pottery class can get an 80% discount on FULL VERSION development software with NO effort, and a developer has to work, to get even a LIMITED function version to keep up on the product and HELP THEM sell it, is LUDICROUS! You could say the same about some senior discounts that cause problems with non retired people while the retired people could get similar deals in times that others are less likely to be able to use.

              The thing to remember is that pricing has very little to do with cost. For instance, when we've priced the few products we've developed for our business we set our prices largely based on what the competitors are charging for similar products; what we don't do is figure out how much the product costs us and then simply add $9.99 to each price. Sometimes we might make $3 on something, sometimes $13. Basically, we earn what the market will bear. In our case, if the price falls below the cost, we can pretty easily stop producing that product. But airlines don't have this luxury as their schedules are set months in advance.
              I one sold over 90% of the stuff I sold at a small profit above cost. An accountant laughed me out of his office! He couldn't believe it. For a while, I sold software and hardware for less than ANYONE else! Even custom software was sold for 80% below the national accepted average! Even I though, sold the applicard at a 200% markup! It was too cheap to sell for much less. That was STILL almost an 80% discount though!

              Personally, I think the airlines' biggest problem is one more of optics than what they're actually doing. If they could say that a flight from New York to Los Angeles costs $500, but that they'd give you a discount of $100 if you were willing to have a stop in Chicago, people would be a lot happier than them saying a flight to L.A. stopping in Chicago costs $400 while the direct flight costs $500.
              Well, people will not believe the cost in the first place. People talk about wealth distribution. The richer people can play ALL the games to get the great discounts. The poorer often CAN'T! ALSO, did YOU know that some COACH seats cost as much, OR MORE, than FIRST CLASS, at least in the US? It's often TRUE! You may ask WHY do they pay so much. Well, those that want first class seats will often PAY for them. During that period, the first class seats DO cost a bit more. THEN, they hold a certain number of first class seats at a higher cost. During all this time, the coach prices climb, and some of THEM are hidden. They ALSO oversell the plane! They apparently generally sell about 20% more seats than they have, according t what some say! They THEN give the frequent fliers the first class seats based on rank. The rank depends on level, time they arrived, and cost of the current seat. After that, they assign the oversold seats.

              THEN, because the public got SICK of it, and the FAA stepped in, they have to ask for VOLUNTEERS to give up THEIR seats to give to those that don't have seats. THOSE volunteers often get special vouchers for an extra flight, dinner, etc... If they don't have enough volunteers, the remaining seatless people are redistributed, along with the volunteers, to subsequent flights.

              MOST of the US airlines do it in this way. With ALL THIS, surprisingly, they may STILL have empty seats. If they aren't filled from earlier delays, oversells, transfers, and volunteers, they may get filled by standbys or special employee deals or "deadheads"(off duty or transitioning employees).

              Steve
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          • Profile picture of the author seasoned
            Originally Posted by Richard Van View Post

            Pricing is one thing that's shifty, flying without permission to fly is quite something else.

            Report: AirAsia did not have permission to fly doomed route | Fox News
            Yeah, some companies may do that, which is IDIOTIC for non domestic travel. In the US, a plane could get in a LOT of trouble for doing that. Supposedly, they could even be SHOT DOWN! And try flying in the restricted airspace, like around area 51 and the whitehouse!

            I doubt it happens much in the US though.

            Steve
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  • Profile picture of the author Lucian Lada
    @kilgore:

    In a way you're right, but in all your examples prices are somewhat static and predictable, unlike flight fares. You know roughly how much a TV costs and you'll usually find very similar prices for it in all stores. And there won't be a place where you can regularly get that TV + another product (the equivalent of the a connecting flight in our thread) at a lower price than what you usually have to pay just for the TV.

    Also, in your Internet service example, the price might be determined by infrastructure investments: it certainly costs more to offer this service in a mountainous area than in a plain one, doesn't it?

    Something else we didn't consider, and might make me sound stupid for throwing out the initial assertion, is if the $3,000 price is the regular one and the $4,600 an artificially-inflated one to profit from the people who want a direct flight, or is the $4,600 price the regular one and the $3,000 price a discounted one just so they can fill up more seats? The article I linked suggests the latter, but who says they're experts?
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    • Profile picture of the author kilgore
      So is it the fact that the prices aren't static and predictable that makes airlines shifty? I guess I just don't see it that way. To me that just means that the airline industry is very competitive, has low margins and thus requires sophisticated supply/demand models in order to remain profitable. I'm certainly no expert, but my guess is that the airlines do lose a bit of money on many sold seats -- especially, the flights with one or more stops -- but that they make it up (or at least try to) on the surpluses they are able to charge for direct flights, business class or other gimmicks (e.g., "economy plus"). So in a sense their "shiftiness" really amounts to a subsidy to people willing to trade inconvenience for a cheaper ticket. They'll sell you a seat at a even price lower than the cost to them -- if you're willing to have a 10 hour layover in Timbuktu, have only 2 1/2 inches of legroom and get nothing to eat but a stale bag of peanuts.

      As to the internet service example, yes there might be differences in cost but (1) this is often not the case and (2) even when it is, the price isn't being set based on the cost, but what the market will allow. What I mean is that if there is a mountain town that has 50 internet service providers, internet there will still cost less there than a non-mountainous town with just one ISP. Again, the cost is irrelevant to the price; and especially in industries with high fixed costs (like an airline or an ISP), once the investment is made (by, for instance dropping hundreds of millions on jumbo jets) the goal is to recoup that initial investment as best as they can. For an airline, that means dynamic pricing, which as I said is frustrating. And annoying. But again, it's not shifty. It's just business.
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