Please Explain Fare Difference on Same Route, Different Point of Origin
 

I went on Kayak today to research a round trip business class fare from New York to Prague. I accidently typed in Prague to New York for the same dates and the fares were substantially less than they were for New York to Prague. It obviously has to do with point of origin but I'd love a logical explanation. Thanks!

Would you be surprised to know that nonstop fares from Detroit to Miami on Saturdays in February are nearly double the fares from Miami to Detroit?

First principles of a free market economy - supply vs demand.

To understand airline pricing, you will have to visit the Wizard of Oz.

Aside from the obvious of supply and demand for that route AT THAT TIME there's also what the local market can bear.

The Czech Republic has a lower GDP per capita therefore they have to charge less for flights from there.

"what the local market can bear" = demand

I'd love a logical explanation too. It costs $250 more per ticket to fly from Perth to Singapore than from Singapore to Perth on SIA, same flights, same dates, etc.

I was told it had something to do with Aussie taxes or landing fees or some such thing (?)

We've flown from Milwaukee to a distant city, changing planes in Chicago, and paid substantially less that the people on the same flight who started in Chicago.

Taxes and fees can indeed make a difference, but usually a pretty minor one. But as a rule airline fares have been always been asymetrical - different costs for the same route depending on which end one originates. It has to do with what mrwunrfl said - supply and demand. On any given day/month, more people are going to want to go from A to B than from B to A. At certain times of year, there will be heavy business demand on some routes, which will tend to make competition for business class seats tighter, while those same routes will experience a big drop in business demand during other times of the year, hence prices will fall in order to attract more leisure passengers to fill those seats. It's ironic (but true) that business class fares over the North Atlantic (both directions) are typically lower in the summer than in the spring/autumn/winter, due to a relative drop in business travel. Counter-intuitive to those accustomed to buying coach seats on the same routes.

The airlines are nothing if not competitive. Each one has large "revenue management" (or similar named) staffs whose purpose it is to squeeze every last dime out of every last seat on every last plane on every last day. They look at market trends, cost of locally-sourced supplies and services (fuel, catering, ground staff etc.), statistical incidence of last minute bookings, and dozens - maybe hundreds - of other factors in coming up with fares and fare rules. But most importantly, they look at <i>competition</i>. It doesn't even have to be competition on the exact same routes, but competition between different origin/destination points, or even modes.

Take the USA < > Prague case in the OP. Say the US destination/origin point is New York. Well, if people in NYC want to fly to PRG, what choices do they have for originating airport? JFK and Newark for sure, but Boston? Washington? Philly? Yes, technically, but you'll find few travelers who'd want to go that route.

But the Prague originators can take a train to Munich, say, in a fraction of the time it would take a New Yorker to go to Boston, and from Munich the choices over the Atlantic are likely much greater, hence more competitive, than from Prague. So the revenue management/tariff people in the airlines have to look at substitution as a key element facing PRG originators; it's less an issue for NYC originations.

Maybe macroeconomic factors like per capita GDP enter into it, but I doubt it. Business fares from, say, Nairobi to Johannesburg are higher than JNB-NBO origins, and the per capita GDP is a lot higher in South Africa. It has more to do with airline-specific economics, and of those, supply, demand and competition are the keys.

Sorry, long winded as usual.

It is a secret fraternity among airline executives. They win a prize if everyone on the aircraft is paying a different fare with bonus points if passengers can not figure out the fare structure.