Why Do Flights With Stopovers Sometimes Cost Less Than Direct Ones?
Flights often have intermediate stops before reaching a final destination, known as stopovers
A flight with a stopover takes longer, requires an additional takeoff and landing, and is usually less convenient than flying directly to a destination. Yet it can sometimes cost significantly less. This seems counterintuitive because the airline is providing more transportation rather than less. The explanation lies in the way airlines price tickets. A ticket price is not simply a calculation of how much it costs an airline to transport one passenger. Instead, airlines use demand, competition, passenger behavior, and mathematical models to determine how much different customers are willing to pay.
The most important factor is demand. Airlines do not charge every passenger the same amount for the same seat. They divide seats into different price categories, known as fare classes, and adjust the number of seats available at each price according to expected demand. A passenger who needs to arrive in a city at a particular time may be willing to pay considerably more for a nonstop flight. Another passenger with more flexibility may choose a cheaper itinerary with a stopover. The airline can therefore charge different prices for essentially the same physical seat depending on the customer's circumstances.
This becomes particularly important on routes with strong competition. Imagine an airline operating a nonstop flight between two major cities. Several airlines may compete for passengers on that route, making it difficult to charge very high prices. However, an airline might also offer a connection through one of its major hubs. That connecting flight may face less direct competition because it is not simply competing on the same city-to-city route. The airline can therefore use different prices to attract passengers who are more sensitive to cost.
An image showing a flight that has a layover
Airline networks make this possible. Many airlines operate using a hub-and-spoke system, in which passengers from many smaller cities are routed through a central airport before continuing to their destination. For example, instead of operating separate direct flights between every pair of cities, an airline can connect passengers through one major hub. A single aircraft can therefore serve passengers traveling between many different combinations of cities. The price of each itinerary depends not only on the distance traveled but also on the demand for each particular combination.
This explains one of the stranger features of airline pricing: distance is not a reliable indicator of price. A passenger flying 1,500 kilometers nonstop may pay more than someone traveling 2,500 kilometers with a connection. The additional distance does not necessarily create a proportional increase in the airline's costs. Much of the cost of operating a flight comes from expenses such as the aircraft, crew, airport operations, and fuel. Once the flight is operating, selling an additional seat can generate substantial additional revenue at relatively little extra cost.
Airlines also use revenue management, which relies heavily on statistics and forecasting. Before a flight departs, an airline has to estimate how many people are likely to book, when they will book, and how much they are willing to pay. These predictions allow the airline to change ticket availability and prices as the departure date approaches. If demand is high, cheaper fare classes may disappear. If demand is weaker than expected, lower prices may remain available for longer.
The unusual pricing of connecting flights can also be explained by the different types of passengers airlines are trying to attract. Business travelers often place a high value on time and convenience. A traveler attending an important meeting may prefer a nonstop flight over one with multiple layovers.
