Go Back  FlyerTalk Forums > Miles&Points > Information Desk
Reload this Page >

Why’s flying to Asia more expensive than the same distance but towards America?

Why’s flying to Asia more expensive than the same distance but towards America?

Old Sep 22, 22, 2:28 am
  #1  
Original Poster
 
Join Date: Mar 2016
Location: Amsterdam
Posts: 14
Question Why’s flying to Asia more expensive than the same distance but towards America?

I'm based in the Netherlands. And I've noticed this in the last few months: a 10hr flight into Asia is much more expensive than a 10hr flight towards America. In a nutshell: Going west is cheaper than going east. It seems to hold true regardless of the country or airport I chose. Does anyone know why this is? Thanks.
aminozuur is offline  
Old Sep 22, 22, 2:35 am
  #2  
A FlyerTalk Posting Legend
 
Join Date: Sep 2009
Location: Minneapolis: DL DM charter 2.3MM
Programs: A3*Gold, SPG Plat, HyattDiamond, MarriottPP, LHW exAccess, ICI, Raffles Amb, NW PE MM, TWA Gold MM
Posts: 99,761
Different markets. Most people going to Asia would not decide to go to the USA instead, regardless of whether they're business or leisure travelers. Willingness to pay is different. In some markets, there might be more or less competition on various routes of approximately the same length for USA vs Asia, and the cost structures (landing fees, for instance) could be different, as would be the taxes and fees (country and airport specific) that are added to fares so that they contribute to the overall ticket price.
MSPeconomist is offline  
Old Sep 22, 22, 2:59 am
  #3  
Original Poster
 
Join Date: Mar 2016
Location: Amsterdam
Posts: 14
Originally Posted by MSPeconomist View Post
Different markets. Most people going to Asia would not decide to go to the USA instead, regardless of whether they're business or leisure travelers. Willingness to pay is different. In some markets, there might be more or less competition on various routes of approximately the same length for USA vs Asia, and the cost structures (landing fees, for instance) could be different, as would be the taxes and fees (country and airport specific) that are added to fares so that they contribute to the overall ticket price.
A flight from AMS to SFO is €450 while a flight to BKK is €1000. Taxes and fees don't make up that much.
So I'm still not sure what the true core reason is to cause these massive changes..
aminozuur is offline  
Old Sep 22, 22, 3:11 am
  #4  
A FlyerTalk Posting Legend
 
Join Date: Sep 2009
Location: Minneapolis: DL DM charter 2.3MM
Programs: A3*Gold, SPG Plat, HyattDiamond, MarriottPP, LHW exAccess, ICI, Raffles Amb, NW PE MM, TWA Gold MM
Posts: 99,761
They're not close substitutes. If you want or need to go to BKK, are you willing to fly to SFO instead? Probably not. The trip to Thailand could be for a specific conference taking place in Thailand, tourism (specifically to visit temples, palaces, and shrines, see the floating markets, and to take a river cruise), medical tourism, sex tourism, to explore Asian cuisine, or for business meetings in Bangkok (to visit customers or a manufacturing site). Obviously, none of these objectives can be completely fulfilled easily in the San Francisco area.
MSPeconomist is offline  
Old Sep 22, 22, 8:04 am
  #5  
 
Join Date: Feb 2022
Location: LAX
Programs: UA
Posts: 644
Also do consider the war in Ukraine and the suspension of Russian overflight; the great circle route for AMS-BKK passes over Russia, so routing around Russia adds to fuel costs. AMS-BKK great circle distance is 9217 km, and the cruise speed of a 787 is around 900 km/h, so that's ~10 hours on the shortest routing. For the actual flight route, you're adding 2 or 3 hours to that I'd guess.
angetenar is offline  
Old Sep 22, 22, 5:25 pm
  #6  
Original Poster
 
Join Date: Mar 2016
Location: Amsterdam
Posts: 14
Originally Posted by angetenar View Post
Also do consider the war in Ukraine and the suspension of Russian overflight; the great circle route for AMS-BKK passes over Russia, so routing around Russia adds to fuel costs. AMS-BKK great circle distance is 9217 km, and the cruise speed of a 787 is around 900 km/h, so that's ~10 hours on the shortest routing. For the actual flight route, you're adding 2 or 3 hours to that I'd guess.
Thanks for chipping in. Hm. I'm not sure if the fastest AMS-BKK route is through Russia. I've been on this route many times.

I just checked and the direct flight from EVA Air is 11 hours. The last time I took this direct EVA flight, I remember it was 12 hours. So flight duration doesn't seem to be the explanation here, but I could be wrong.
aminozuur is offline  
Old Sep 22, 22, 6:07 pm
  #7  
 
Join Date: Feb 2022
Location: LAX
Programs: UA
Posts: 644
Originally Posted by aminozuur View Post
Thanks for chipping in. Hm. I'm not sure if the fastest AMS-BKK route is through Russia. I've been on this route many times.

I just checked and the direct flight from EVA Air is 11 hours. The last time I took this direct EVA flight, I remember it was 12 hours. So flight duration doesn't seem to be the explanation here, but I could be wrong.
AMS-BKK on gcmap
angetenar is offline  
Old Sep 23, 22, 7:01 am
  #8  
FlyerTalk Evangelist
 
Join Date: Mar 2008
Location: Netherlands
Programs: KL Platinum; A3 Gold; BA Rust
Posts: 26,448
Originally Posted by aminozuur View Post
So I'm still not sure what the true core reason is to cause these massive changes..
There are not many passengers who say "I want a flight to any destination that is 10 hours away by plane", and would therefore seriously consider AMS-SFO and AMS-BKK as substitutes; as such, comparing prices is meaningless, because the people interested in buying are not (generally) agnostic to the destination, and would not seriously contemplate SFO as a substitute for BKK, or vice versa. It is not a valid, realistic or accurate comparison to compare fares on these (or any two) vastly different routes. As such, the price of a ticket to SFO does not respond in any way to rises/falls in demand/supply of tickets to BKK, and the price of a ticket to BKK does not respond in any way to rises/falls in demand/supply of tickets to SFO.

The distance flown, or the time/fuel needed to get from AMS to destination A or destination B is not the prime driver of the fare charged by the airline.

It's misleading to think that, if a flight takes roughly the same amount of time, then the fare should be the same. Airlines are no longer required to fix prices like in the good old days, where this type of pricing model may have been more prevalent, but now they can set the fare to a level determined by the market (how many seats have we already sold? How many more do we need to sell? What are our competitors pricing their flights at? etc etc).


So - why is BKK so much more expensive than SFO on the particular day/dates you are looking at? Well, for one thing, there is not an equal number of passengers at AMS, one half wanting to go to SFO, the other half wanting to go to BKK. Also, there are not an equal number of seats departing from AMS to each of SFO and BKK. There is simply is no reason for expecting prices for AMS-SFO and AMS-BKK to start, or evolve, in a similar manner.. They are two entirely different products, appealing to different sets of potential customers, and given their great distance from each other, will experience individual and completely separate/unrelated levels of demand.

It's just not a useful or realistic expectation to have, that all far-flung destinations of a similar distance should (always) be reachable at (roughly) the same price. Passengers tend to have specific destinations in mind, and most will not therefore consider swapping travel plans from, say, BKK to SFO just because it's cheaper to go to SFO. That means you have two entirely different markets; those who want to go to SFO (or West Coast USA) and those who want to go to BKK (or SE Asia); variations in price are not going to drastically alter those markets ("I say, I think we pitched BKK at too high a price! They're all choosing to book SFO instead!") so of course each will end up having its own price that reacts to the supply and demand in that market.

That said, BKK is a notoriously low-yielding route for European airlines, so your price does sound very much on the high side. I suspect there may be an element of the number of flights being still well, well below what it was prior to Covid, and well, well below the actual demand on the route. (Note, for instance, that BA has again postponed its return to BKK until sometime in 2023. Yields must be up with the fewer seats in operation from Europe able to fetch a higher price than previously; demand has returned but supply is limited)

Last edited by irishguy28; Sep 23, 22 at 7:07 am
irishguy28 is offline  
Old Sep 23, 22, 8:23 am
  #9  
A FlyerTalk Posting Legend
 
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 99,100
Originally Posted by aminozuur View Post
I'm based in the Netherlands. And I've noticed this in the last few months: a 10hr flight into Asia is much more expensive than a 10hr flight towards America. In a nutshell: Going west is cheaper than going east. It seems to hold true regardless of the country or airport I chose. Does anyone know why this is? Thanks.
For economy class this kind of dynamic with pricing discrepancy’s isn’t anything new. It has been going on long before there was any Russian effort to expand its invasion of Ukraine this year.

I think a lot of the pricing ends up being a function of how inelastic the demand profile appears to be. For example, VFR traffic — and factoring in issues related to visas to visit the “West” — come to play in how much more money an airline can extract out of a customer desperate to see their parents or a wedding abroad than a customer who wants to check out the Golden Gate Bridge but would be just as fine to substitute for another destination with cheaper flights at around the same time.
GUWonder is online now  

Thread Tools
Search this Thread