Offshore Air Tickets: What’s the Current Status?

Over the years, travel writers have occasionally extolled the virtues of buying air tickets in other countries. They can often point to big “savings” on some tickets. I haven’t seen much of that for most of the last few years, but now that the dollar has gained against the euro and pound, the idea has resurfaced. As a reader noted,

“I saw a recent travel ‘tip’ that some air tickets cost less overseas than the same tickets if you buy them in the U.S. Is that really the case?”

The short answer is, “Yes, but mainly for tickets that most travelers couldn’t easily use.” It’s been about two years since I lasted reported on offshore tickets, so an update is in order.

Overall, I can summarize most of what you need to know about buying tickets outside the U.S. or Canada in six general rules.

1. Prices for air tickets are almost always set in the currency where the trip starts, not necessarily where the ticket is issued. That means, for example, if you want to buy a round-trip from Boston to London, the fare is established in U.S. dollars. If you live in London, the round-trip fare to Boston is established in pounds. You could buy a Boston-London round trip from a travel agency or airline located in London or almost anywhere else, but you’d pay the dollar price. And if you wanted to pay in pounds, your airline or travel agent would convert that dollar price to pounds at the going rate.

2. Prices for many international tickets vary, depending on direction. Although exchange rates fluctuate constantly, airlines do not attempt to equalize fares between two countries on a day-by-day, or even month-by-month basis. Instead, they set their prices in each country at levels they think will maximize their profits from travelers who live in that country. And trips that start in countries with a weak currency often cost considerably less than trips between the same two points, in the opposite direction, that start in a strong-currency country. Thus, for example, with the British pound in something of a slump, a round-trip premium economy ticket from London to Boston and back starts at £890, which works out to $1,340 at mid-March exchange rates, compared with $1,537 for a Boston-London-Boston ticket.

3. Excursion round-trip tickets are usually much less than the cost of two one-way tickets.& This is;almost always true in economy class, and these days you find cheap excursion fares even in premium economy and business classes. Accordingly, buying two one-way tickets is almost always more expensive than buying a round-trip, even for a trip that starts in a country where fares are higher. Thus, the least expensive combination of two one-way tickets for that Boston-London round trip I could find is more than double the U.S. round-trip price. In fact, a one-way ticket in either direction costs more than either round-trip.

4. The only time you come out ahead with two one-way tickets is when, for whatever reason, you buy full-fare unrestricted tickets. Then, the one-way return-trip fare might be lower. However, about the only people who buy full-fare tickets in any class these days are business travelers who need—or think they need—the flexibility to change their plans at the last minute.

5. Splitting your routes can sometimes save money. Depending on circumstances, you might occasionally find that you can cut your total trip cost by buying a cheap round-trip excursion from the U.S. to an overseas gateway, then buying a separate trip from that gateway to your actual final destination. Then, of course, you’d pay the price established in that gateway. Usually, however, through fares are lower, but sometimes you can do better with “beyond the gateway” tickets on local low-fare lines that do not offer through fares with intercontinental lines. The only way to figure out your best bet is to spend the requisite several hours in front of your computer—or ask your travel agent.

6. You may want to think about offshore purchase if you want to buy a round-the-world (RTW) ticket in business class. If, for example, you buy a 29,000-mile RTW ticket in business class on the Star Alliance —generally considered to be the most flexible RTW option—the price in Boston is currently $10,326. However, if you buy that same ticket in London, the pound price, converted to dollars, is $8,213. The lowest price I could find for that ticket is $7,416, starting and ending in Seoul, South Korea, but another good price is $7,976 in India. You would find the same general price differences for Star Alliance RTW tickets in economy class, too, but individual RTW brokers can almost always beat those prices—in fact, those brokers rely on offshore purchase for some of the legs of the itineraries they create.

A few years ago, when local economies in Southeast Asia were in a state of collapse, prices there were really low. I remember seeing business class RTW tickets from Thailand for just a bit over $3,000. And, many years ago, when the pound dropped as low as $1.03, I bought a first class RTW ticket in London for less than $2,000. On the other hand, I’ve seen times where U.S. dollar fares were lower.

One closing comment. Regarding travel, generally, and especially airfares, never think “always.” The above “rules” are general, and may work most of the time, but I’m sure you can find exceptions if you look.

Fortunately, the Internet makes it easy to compare as many alternatives as you want. International airline websites generally give you the option of entering the country where you live (or where you want to start your trip), so you can price trips in local currencies and compare those prices to dollar prices. Most of the time, however, for most travelers, a conventional economy class round-trip from the U.S. will be your best bet.