Price discrimination in the world of airlines and how I maximised it on Jetstar, Tiger Airways and Air Asia

Jul 10, 11 Price discrimination in the world of airlines and how I maximised it on Jetstar, Tiger Airways and Air Asia

In classical economics, price discrimination is when an identical product is sold for different prices to different customer segments. Of course, theoretically this should not happen, but we see it all the time! A Sweet Talk bubble tea sold at a busy MRT station can be $1.80, whereas a location slightly further away from the same MRT station can be sold for $1.50. A dress sold at a pushcart can cost $20, while the exact same dress (since most pushcarts and blogshops tend to get it from the same manufacturer) can be sold for $16 online.

Likewise, airlines practice price discrimination in order to maximise their profit. People who are willing to book tickets 9 months in advance can get tickets as low as $1 (not including taxes that is), whereas people booking tickets 3 days before a flight would have to pay a premium. However, there is yet another form of price discrimination that people don’t usually know about. The booking of 2 single trips VS a return trip!



Take a look at the fares above. I got the screen shots within 5minutes of each other. At this point of time according to XE, the THB to SGD rate is 0.0403021. So, a return fare is S$246.90, whereas 2 single trips booked is S$114.95 + THB2699.00*0.0403021 (S$108.78)= S$223.73! A savings of S$23.17 with just 5 to 10 minutes of additional effort! Of course,  your credit companies might charge you a lousier rate for the exchange, but they would typically not charge more than 1% spread. I use Mustafa Forex as a typical money changer indication, and they are currently quoting 0.040/0.0409. Based on Visa’s rate and a administrative fee rate of 2.5%, I got 0.0416. That means at worst, you would be charged S$112.28 for the BKK to SG single trip. That’s still a saving of S$20 or so.

Likewise for another airline,



A return fare costs S$222.87, whereas 2 single trips costs S$80 + THB3570 * 0.0403021 (S$143.88) = S$223.88. In this case, there is no maximisation strategy within the same airline. But then, you would realise another thing. Technically, you can book a flight from Singapore to Bangkok using the 2nd airline paying S$80, and the flight from Bangkok to Singapore using the 1st airline paying S$108.78. So your final cost is actually only S$188.78 instead of S$246.90 or S$222.87. A total savings of easily S$50+ or almost 24%!

Of course, a person has to be willing to do all this fact finding and comparing in order to find the cheapest route. For those who find it a hassle, then you belong in the customer segmentation that would rather pay the higher fare! And here’s a word of thanks from me to you in helping me subsidize my airfare.

There are also various other mechanisms in the airline industry, such as offering seat selection, flexi fare dates, check in luggage, airfare+accomodation packaging and weekly special offers. All these are basically used as a form of price discrimination, since the budget conscious wouldn’t mind putting in more effort. Of course we cannot forget things like price beat guarantees!



  1. Fergus on the Go » Blog Archive » Sights, shopping and massage in Bangkok – Day 1 - [...] of the temples, and all. We ate a lot, we shopped a lot, we spent a lot. As…

Leave a Comment

Your email address will not be published. Required fields are marked *