"Can I still cut airfare costs by buying a return ticket overseas?" a reader asks. The quick answer is, "Not as much as last year. At current prices, offshore tickets are only rarely good deals for conventional leisure travel, but you can still find deals in business class."

Three basic rules apply to buying airline tickets anywhere in the world:

The price of every ticket depends on where you start the trip covered by that ticket, not where you buy the ticket or the currency you use. This rule applies to all individual flights on any ticket, whether one-way, round-trip, or circle trip.

In each country, airlines set ticket prices for trips that originate in that country without direct regard to prices elsewhere. In most developed countries, prices are set in local currencies; in less developed countries, prices are usually keyed to U.S. dollars or euros. Regardless of the currency, there are no legal or regulatory requirements requiring that fares between the same two points be the same for trips that start in one country or the other, either in the same currency or after conversion, and they often are not.

You pay the same amount (plus or minus a few small exchange differences) no matter where you buy the ticket. If you buy a ticket from a U.S. agency for a trip that starts in Frankfurt, for example, you pay the German price, as established in euros; if you want to pay in dollars, the airline or agency converts the euro price to dollars.

Airlines establish ticket price levels in each country based on (1) their general worldwide pricing strategy and (2) what they think will sell in the local market. Thus, even after conversion at current exchange rates, the cost of a ticket for an international trip depends on the direction of the initial trip. Some directional differences are minor and caused mainly by short-term currency fluctuations; others can be large, if, for one reason or another, airlines decide to offer cheap trips in some countries or decide not to adjust for longer-term currency shifts.

For most ordinary leisure travelers, that first rule makes offshore tickets impractical. International round-trip fares usually much less than twice the one-way fares, so buying separate one-way tickets, even with a cheap return ticket, is almost always more expensive than a round-trip starting in the United States.

As a test, I took a look at the one major transatlantic route where the lowest fares are available on a one-way basis and the round-trip is simply the sum of two one-way tickets: The United States to Ireland, on Aer Lingus. The lowest one-way economy price I found for a mid-February trip from New York to Dublin was $245, the round-trip price from New York was $549, and the one-way Irish price from Dublin to New York (after conversion from euros) was $280. So, in this case, buying two separate tickets would cut your cost by is $24 -- a good illustration of the system, but not a particularly good deal.

I couldn't find any similar advantages to offshore purchase for return trips from either Asia or Europe. Everywhere else I looked, a U.S.-based round-trip beat two one-ways. Except in the unusual case of cheap one-way economy tickets, then, most vacation travelers can forget about offshore purchase.

Business travelers, however, are a different matter: Because business-class round-trip tickets are typically priced at twice the one-way rates, offshore buying can make sense. When I looked at this question last year, prices for business-class trips originating in India, Korea and Thailand were considerably cheaper than the dollar trips to these countries. The big gaps have recently closed.

Although current differences are lower, you can still cut maybe 10 percent to 20 percent off some premium fares by buying return tickets in your destination country. So whenever you look for an overseas trip in business class, it's still a good idea to price your trip as both a round-trip and two one-way tickets.

 

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(c) 2009 Ed Perkins On Travel