A Longer Flight With a Layover Is Often Cheaper Than a Short Nonstop
Airlines deliberately sell connecting seats cheap to fill planes, while charging whatever they can for nonstops where they dominate.
Half as Interesting · Why Almost Every Airline Has Sued This One WebsiteIt costs an airline less to fly you nonstop than to fly you farther with a connection, and it charges you more anyway.
That backward pricing starts with how airlines have operated since the United States stopped regulating routes and fares in 1978. Most big carriers switched to a hub-and-spoke system, which means they funnel flights through big base airports, called hubs, rather than flying directly between every city. It is more efficient to collect passengers from many places, land them together in Denver or Newark, and send them back out.
The twist is supply and demand. More travelers want nonstops, so airlines charge more for them, even though a nonstop is cheaper for the airline to operate. A United trip from Denver to Boston, for example, costs the airline less to operate nonstop than to fly from Denver to Newark to Boston. Yet the nonstop is priced higher.
The hub system widens that gap. United uses Denver and Newark as two of its main base airports. If you want to fly nonstop between those two United strongholds, United has almost no competition and can price the ticket for what a traveler in a hurry will pay, about $324 in one example. Boston is a Delta hub, not a United one, so United does not have the same grip there. Southwest, Delta, and JetBlue all fly nonstop from Denver to Boston too, and perhaps that competition is why United sells that nonstop for as little as $89.
Accept a layover and competition gets even fiercer. A traveler willing to stop once between Denver and Boston usually does not care where that stop is. United can offer Denver to Boston through Newark for $116, but Delta can route the same trip through New York's Kennedy Airport or Detroit, and American can go through Chicago or Philadelphia.
That $116 fare is deliberate. The goal is to fill a hub flight first with high-paying nonstop passengers, then put lower-paying connecting passengers in seats that would otherwise go empty. With a layover, United faces more competition, so the price falls, and the airline prefers to put somebody paying something in those leftover seats.
Questions people ask
Do airlines lose money when they sell a connecting ticket so cheaply?
No. The connecting passenger pays less than the nonstop passenger sitting next to them, but more than the zero dollars the airline would get if the seat flew empty. Since the plane is already scheduled to fly for its high-paying nonstop customers, almost any extra fare helps cover costs.
Why don't airlines just lower the nonstop price to match?
If United matched the $116 connecting price on its Denver to Newark nonstop, it would give up the higher fares that travelers in a hurry are willing to pay. Airlines use price differences to separate customers who must fly direct from those who will accept a layover to save money.
What exactly is a hub-and-spoke system?
Think of a bicycle wheel. The hub is a major airport like Denver, Chicago, or Newark, and the spokes are flights to smaller cities. Instead of flying everyone directly city to city, the airline brings passengers into the hub at similar times and swaps them onto outbound flights, which lets it offer many more routes with fuller planes.