Feb 072013
 
The cost of your ticket might vary enormously depending on how you 'write' the ticket and where you buy it.

The cost of your ticket might vary enormously depending on how you ‘write’ the ticket and where you buy it.

We know the airlines ‘play games’ with the fares they charge on the flights they offer.  Some places are more expensive to fly to than others, not because of any difference in underlying cost to the airline, or because the more expensive place is further away (often it is the opposite) but because of the airlines perceiving they can get away with charging more for flights to some places than others.

We know that sometimes it is cheaper to fly a multiple flight itinerary much further away than it is to just fly the first sector of the multi-sector journey.  This is also true if you ‘flip’ the concept.  It can be cheaper to fly both sectors than either flying only the first sector (in some cases) or only the second sector (in other cases).  Clearly the fares airlines charge are very much disconnected from their underlying costs and itineraries.

There’s nothing wrong with this.  It is the free market at work.  And if you’re clever, you can use these strange anomalies to your advantage.  We talk about some of them in our three part article series on air fare loopholes – originally written back in 2002 but still in large part valid today, more than ten years later.

There’s another loophole not covered in that series, although we did touch on it in another series on how to save up to 60% on business and first class fares, and that is the concept of reverse direction fares.  This concept can also apply to coach class fares, so it is relevant to remind you of it.

What is a Reverse Direction Fare

Reverse direction fares and travel don’t require the plane to fly backwards (we only know of one plane that can fly backwards as well as forwards, and it doesn’t do that very well).  So what is a reverse direction fare and itinerary?

In yet another example of the disconnect between the airline’s operating costs, flight lengths, and everything else on the one hand, and air fare levels charged on the other hand, sometimes it is cheaper to fly from City B to City A then back to City B than it is to fly from City A to City B and then back to City A.  Both itineraries might involve the identical flights, but the costs if originating in one city might be appreciably higher than the costs if originating in the other city.

The cost differential is minimal for most travel domestically, but becomes particularly apparent on international flights.  To put it in simple easily understood terms, airlines will sometimes charge less money in a country where the people are poor than they will in a country where the people are rich.  This is not the only factor at play, however, and the ultimate reasoning behind an airline’s decision to create a differential in pricing between travel originating at one end or at the other end of a city pair is never obvious and always complex.

Here’s a recent article in the NZ press about how airfares from London to New Zealand can be much less expensive than airfares from New Zealand to London.  Indeed, the poor Kiwis, wishing to fly to London, can find themselves paying almost exactly twice as much as a Brit would pay to fly to NZ.

The New Zealanders feel particularly aggrieved at this because it is their own, largely NZ-government owned airline, Air New Zealand, that is selectively gouging them while giving the Brits a special discount.  Furthermore, in this case, it could be argued that the NZers are poorer than the Brits.

Who Can Benefit From Reverse Direction Fares

Of course the first thing to ascertain is if there is a reverse direction fare opportunity for you to take advantage of or not – are prices unbalanced and cheaper for round trips from your destination than they are from your home city?  If there is an opportunity, then read on.

If you are traveling somewhere, but only once, you probably can’t make any use of reverse direction fares.  The only exception to this might be if you are flying first or business class (or full fare coach) such that the roundtrip fare isn’t cheaper than two one way fares.  Maybe then you can buy one ticket for travel one-way, and the other ticket for the return travel, but the airlines make this hard to do and you might need the cooperation of a travel agency or a friend in the foreign country.

But if you travel regularly somewhere, or even if you only travel twice, you can start to take advantage of the reverse direction opportunity.

If you are traveling somewhere twice, maybe once from 10 to 20 June and once from 10 to 20 July, this is what you’d do.

  • Buy one roundtrip ticket, traveling from A to B on 10 June, and back from B to A on 20 July.
  • Buy one roundtrip ticket, traveling from B to A on 20 June, and back from A to B on 10 July.

If the dates of your trips are more spread out, you need to be careful that you are not shifting into higher fare categories due to what appear to be longer duration stays.

If you know you will be regularly traveling a route, sometimes it makes sense to start off with a one way from A to B, then make all your future round trips B to A and then back to B, just so long as you can plan your travels with sufficient certainty.

Some Strategies to Improve Your Chances of Benefitting from Reverse Direction Fares

The airlines are trying to shut down people who take advantage of the loopholes in their fares any way they can, and now they know more and more about us (in the name of ‘security’) it is easier for them to do so.

They also impose restrictions on which fares can be ticketed outside the country where the travel originates, and while I don’t know for sure, I suspect that these days many airlines have sufficiently sophisticated websites and fare quoting engines to work out what country you are in from your browser’s IP address and limit the fares it quotes to ones they will allow to be sold in the country you are located in.

One possible workaround to this is when (if) a website asks what country you are located in, specify the country you want your travel to start from rather than the country you are normally resident within.

You might also want to check fares when you are actually in the country your travel would start in, or at least, in some country other than the country you are ostensibly traveling from.  For example, if you live in the US and are looking at reverse direction travel from France to the US, research fares when you are in France, or maybe Germany or Britain.

You might need to give an address in the foreign country in which you live.  Maybe that can be a friend’s address, a hotel address, a travel agency address, or any other address at all.  With electronic tickets, it isn’t as though the airline is actually going to mail anything to you, is it.

Something also to consider is checking with specialist travel agencies in the country you’d be traveling from, next time you’re there.  You might find that airlines have unpublished discount fares that are even more generous than the ones you can see on any online travel agency websites.  Have a look in the travel section of local newspapers to see what agencies are advertising discount airfares, both in general, and in particular to your home country.

The Airlines Fight Back

We have heard stories of airlines hunting down people who take advantage of the airlines’ own created loopholes, by observing that the address on file they have for the person’s frequent flier membership is not at the apparent departure city but at the apparent destination city for much of their travels.  One or two or three times, and you’ll probably not ring any alarm bells.  But if you’re going to be doing a lot of this type of travel, then it might pay to either not use a frequent flier program or to use one which has your address in the foreign country.

Yes – it is yet another measure of the backwards approach to customer service that airlines don’t actively seek out their most frequent fliers with a view to offering them additional benefits and bonuses, but instead do so suspiciously, to ‘audit’ their travel patterns and to see if they can find any ‘irregularities’.  Imagine if Sears said to you ‘We noticed that you have been buying from us not at your home Sears store in the rich neighborhood with the full margin prices, but at the other Sears store in the depressed neighborhood with lower prices and lots of sales’.

Imagine further if Sears then said ‘So we’re cancelling all the points you earned on your Sears card, and now we’re going to sue you for the difference between what you paid at the depressed store location for goods on sale there and what you ‘should’ have paid, full price, at your ‘home store’ Sears location.’

Such things would never happen in the rest of the real world, but do sometimes occur with airlines.

When 1 + 1 = 3

I was arranging some business class travel just today.  The passenger was traveling to an out-of-the-way place, and so as to get reasonable schedules, ended up flying on one airline from his home to his destination, and a different airline for the return.  The cost of the round trip ticket was $4388.

But it was also completely ‘legal’ and not breaking any airline’s fare rules for the person to buy two one way tickets, which together totaled $3768 – $620 less than buying a round trip ticket.  Ouch!

Note also that Kayak did not show this lower fare.  It offered the higher fare, and it was only my experience that then had me cost it as two one-way tickets and add them together to compare, and to see the massive saving that was being obscured.

It used to be that buying two one-way tickets were always the same cost or more than the cost of buying a round trip ticket, but that is not something you can now automatically assume.

This only applies if you are traveling on ‘full fare’ type tickets rather than discounted advance purchase tickets, but if you are stuck with paying top dollar, then you need to consider even a single round trip fare might be cheaper if purchased as two one-way tickets than as a round trip ticket.

Exchange Rate Issues

It used to be that the airlines would set exchange rates for different currencies only once or twice a year, so if there had been some appreciable movement in exchange rates between when the exchange rate was set and the present day, you’d pick up a further bonus from the change in the real exchange rate compared to the notional conversion used by the airline (or vice versa if the movement was not in your favor of course).

But exchange rates much more closely mirror the ‘real’ exchanges now and there are fewer opportunities to take advantage of this.

How Much Can You Save

Within the US, you’ll save very little.  But as you travel internationally, your opportunities for savings start to increase, and as the linked article above shows, in some cases your reverse direction fare might be as little as half the regular fare.

If you are traveling in a premium cabin (business or first class) the savings can grow even further.

It is definitely worth your time to do some research if you travel regularly, internationally, to the same cities.

Travel agents seldom volunteer this saving opportunity, because if an airline detects this type of ticketing, they might turn around and bill the travel agency for the difference in fare.  So if you use a travel agent, you should ask them if they will search out such fares, and perhaps offer to reimburse them for any ‘debit memos’ if the airline subsequently argues with them about the ticketing they did.

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