Tuesday, August 17, 2010

Why is the combined ticket price of three legs of a particular flight lower than the combined ticket price of only the first two legs?

Perhaps I don't understand the economics of civil aviation that well, but what I just saw has puzzled me. A lot.

Ticket price for a commercial flight from DEL to JFK (via HEL) on Finnair is lower than the ticket price for a journey from DEL to YYZ (via HEL and JFK, with the journey from DEL to JFK operated by Finnair, and the journey from JFK to YYZ operated by American Airlines).

This weird pricing looks even more alarming because an American Airlines flight from JFK to YYZ is priced at INR ~8,500, or a good over 27% of the price of the DEL-HEL-JFK flight operated by Finnair.

This effectively translates into: A+B>A+B+C, where A, B and C are positive real numbers. How's it possible? Who's losing money here, if anyone?

Update [11-Sep-16]: Similarly, Turkish Airlines will fly you to Moscow/SVO [and back] via Istanbul for INR 31,159, but if you want to fly to only Istanbul [same dates, same timings, same flights], then you've shell out INR 42,804. Why in the hell is this happening?

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