Airfare Riddle: Same Flight, Different Prices; The Story Behind Price Gaps on Itineraries Shared by American and US Airways

The Wall Street Journal
By Scott McCartney
Updated May 14, 2014 11:29 p.m. ET

 The flight is the same. Even the seat is the same. So why is the airline charging two different—sometimes very different—prices?

American Airlines and US Airways, which merged late last year, are selling seats on each other's airplanes. But they are pricing tickets separately, and will continue to do so for the next 18 to 24 months. American flights have one price in American's reservation system and sometimes a different price in US Airways' reservation system. Same for flights on US Airways airplanes: Check both AA.com and USAirways.com and you're likely to see different prices.

The savings opportunity for savvy travelers can sometimes be large. Earlier this week, a one-way ticket on American's Flight 1054 from Boston to Dallas-Fort Worth was $656 on American's website, but only $346 on USAirways.com. A Phoenix-Seattle round trip on US Airways flights for travel June 13 to 20 was $359 on US Airways' website, but only $298 on AA.com.

This savings opportunity is a reminder for consumers that such pricing disparities exist every day around the world on code-sharing flights. With code-sharing, partner airlines sell seats on each other's flights and combine flights into connecting itineraries. The partner airline often has access to a limited number of seats and can price them independently. Sometimes the price is cheaper when there's not much demand. Sometimes it's way more expensive than booking directly with the airline flying the trip.

A spot-check of 240 different American and US Airways trips in May and June found one price offered by American and a different by US Airways 56% of the time. In most cases, the airline that actually flew the trip had the lower price, but sometimes a cheaper price was available by booking through the other carrier.

Robert Rex, a consultant and platinum-level American frequent flier, was booking a trip to Phoenix to see a client when he happened to check the US Airways website. There, he found the same American flights he was about to book for about $850 for only about $790.

"I think it's ridiculous, and a bit annoying. It makes no sense to me whatsoever," said Mr. Rex, who lives in San Juan, Puerto Rico.

He bought through US Airways to save his client the money. But by doing that he gave up his chance for complimentary upgrades to first class on the trip. Since he had a US Airways ticket, he couldn't get on American's upgrade list. "The client appreciated it, but I'm stuck in coach for 4½ hours to Dallas and another hour-and-a-half to Phoenix," he said.

American expects to be able to offer reciprocal upgrade benefits within a matter of weeks, spokesman Casey Norton said.

Once the merger closed Dec. 9, American rushed to begin code-sharing. The pricing issue won't disappear until the two carriers merge onto one reservation system—the hardest part of any airline merger—some time in 2015 or 2016.

Moving an airline from one reservation system to another is hugely complex, involving countless pieces of vital information and the retraining of employees. It's also full of potential potholes like lost passenger records and delayed flights. United struggled for months with major reservation systems problems in its merger with Continental.

"We are whittling down the differences as best we can, but we won't have 100% until we get to [reservation system] cutover," Mr. Norton said.

Pricing differences result from the two airlines operating on different pricing platforms, each of which has its own approach to gauging demand for remaining seats. In addition, one system always lags behind the other on inventory information, American said. When American sells a seat, for example, its system knows immediately and potentially adjusts prices for that flight and scores of connecting itineraries. There's a lag before the information gets to US Airways, and vice versa.

American says Delta and Northwest, plus United and Continental, were able to coordinate pricing faster because they already had existing code-sharing arrangements when they merged. But American and US Airways weren't partners before the merger, so they started with more work to do. ( Southwest Airlines and AirTranstill have some separate pricing and they merged in 2011.)

"This is unlike any other code-share. It's the largest in the world and we had to start from scratch," American's Mr. Norton said. He added the company's information technology department has done "remarkable" work over the last four months to smooth the transition.

Code-sharing price differences across the airline industry can be pretty remarkable as well. Consider an Atlanta-Seoul round-trip June 13 to 18 on Korean Air Lines, a Delta partner. Korean offered a $2,131 ticket earlier this week, while Delta's cheapest price at the same time for the same flights was $4,518. Whatever access Delta had to the cheapest prices was sold out.

More typical may be a Chicago-Prague round-trip on Lufthansa LHA.XE -2.15% in June priced at $1,698 on United's website but $1,608 at Lufthansa. Different flights the same day showed up at $1,607 on United and $1,518 on Lufthansa.

American and US Airways have their own flights between Dallas and Philadelphia. Before the merger they competed on price. Now they sell the combined flight schedule—but still seem to compete on price.

Flight 1542—both airlines use the same flight number—on June 13 was priced this week at $358 one-way on the US Airways website, but $261 on the website of American, which actually operates that flight. A June 13 to 20 round-trip on planes operated by US Airways showed a $277 price on USAirways.com and $458 if the same flights were bought through AA.com.

If a US Airways customer looked for a last-minute Los Angeles-Honolulu flight this week, he or she would be offered Flight 31 for $569. But Flight 31 is actually flown by American, which offered the same ticket for $379.

Sandy Hedberg, a top-level frequent flier on US Airways, started flying from Knoxville, Tenn., to a client near Fort Wayne, Ind., almost weekly this year. American flies to Fort Wayne, but not US Airways. When the merger went through and the two airlines started code-sharing, Fort Wayne flights showed up on US Airways listings. But they consistently showed up about $200 more than on American's website. So Ms. Hedberg, who consults for medical device manufacturers, buys through American.

"I can't figure it out," she said. "But it's advantageous that they have not figured it out yet."

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