eli5: Why are flights with a layover in a certain city sometimes cheaper than flights to that same city?

Question

Let’s say for example I live in Los Angeles and a United airlines flight from LAX to JFK with a layover in DFW is $500 but that same flight from LAX to DFW is $600. How did I save $100 by adding an extra flight?

In: 2

Answer 1

Airlines will try to charge what they can. They care about overall profits. Airlines know that people prefer direct flights to flights with layovers. So their reasoning is: we can charge more for direct flights. In your case, try comparing your LAX-JFK flight with the layover in DFW, to a direct flight from LAX to JFK. If you can find a good like-for-like comparison (or average multiple flights on these two routes), you’ll probably find that the direct flight is more expensive.

The fact that they end up pricing the flight-with-layover more cheaply than a ticket for just one leg of that route is just a byproduct that airlines don’t care about, as the flight with layover is not *supposed* to be an option for passengers whose destination is the layover airport. It used to be almost impossible to exploit until the advent of online booking and automated search engines for flights. Once people were able to search these “hidden-city” flights out pretty easily, it became more of an issue for airlines, but even then this was (and remains) only an option for passengers flying without checking any luggage (or even carrying hand luggage items that have risk of being gate-checked). And these days airlines are taking extra steps to prevent people from doing this. It’s usually expressly forbidden in their terms and conditions, and if you get caught, you might get sued, the airline might kick you out of their frequent-flyer program, and so on. Also, note that you will be a no-show for the next flight, which may delay that flight as they may choose to wait for you (a short while), and if you booked a return flight, they might cancel your ticket.

All in all, some people apparently do exploit this loophole, but it’s only a small minority, and for many people it will not be worth the hassle or the risk. Which, to cut a long story short, means that the comparison you’re making is irrelevant to airlines.