Difference between air fare for same route

Added after the edit: Since in your case booking each leg separately seems cheaper than the New Delhi-Moscow-Havana journey, my guess below was not the right one.

Looking up flights between New Delhi and Moscow, I find a “Budget” economy fare (fewer bonus miles, no cancellation) for INR 20000 and a “Value” economy fare for INR 43000. Similarly, I see a “Budget” fare for INR 37000 and a more expensive “Value” fare for the Moscow-Havana segment.

If I look up the whole New Delhi-Havana journey, “Budget” fares are marked as “sold out” for the first date I tried and only the more expensive “Value” fare is offered, for about INR 113000 (which is the fare you found and is more-or-less equal to the sum of the “Value” fares for each segment).

The more expensive “Value” fare is more flexible, allows refunds and changes and generates higher rewards. And you can purchase it separately for the New Delhi-Moscow or Moscow-Havana segments too, if you wish to!

Digging further, it's possible to get “Budget” tickets on New Delhi-Havana too. For example for a return trip leaving at the beginning of December and coming back at the end of January. Precisely why it's only available on very few dates even though there are still “Budget” seats to be had on each segment, I don't know.

But according to the website, the cheaper “Budget” fare is only available for stays longer than 2 days or stays that include a Sunday (thus ruling out one-way tickets). Apparently this rule does not apply to flights to the Russian federation, which could be why the cheaper “Budget” fare is still available when trying to book a one-way ticket to or from Moscow separately.

The price is different because the airline wants it that way. Airline booking systems, global distribution systems and the whole travel industry are set up to allow that and setting prices/fares flexibly is an important part of just about any airline's business model. In spite of what intuition might suggest, increased distance or fixed costs are only a minor factor in deciding the price of a single ticket (on average you must cover your costs to stay in business but that's it).

Specific fares can be (and are or were) restricted to non-changeable or non-refundable bookings, to flights including a week-end, combined with other segments, or part of a return ticket, etc. See also What exactly is a open-jaw flight?, One-way versus return airfare tickets, Why are airlines against the transferring of tickets to other persons?, or Why are plane tickets more expensive if they don't include a weekend?

Now, how a given airline sets its fares at a given time is a complex question and they probably don't reveal exactly how they do it. But it's possible to make some educated guesses. For example, a ticket like New Delhi-Moscow-Havana is usually going to be cheaper than the combined price of the New Delhi-Moscow and Moscow-Havana tickets.

This is because a route with an extra lay-over is probably moderately inconvenient and longer than a non-stop flight (although I am not sure there are any non-stop or direct flights in this particular case) and is competing with any number of competing airlines/hubs combinations (someone willing to fly New Delhi-Moscow-Havana is probably willing to fly New Delhi-Madrid-Havana or any other Delhi-XXX-Havana route).

By contrast, a non-stop Delhi-Moscow flight is probably the quickest means to link the two cities and rules and regulations prevent most airlines from offering it so that there is much less competition in this case. Some people living in Moscow or Delhi are probably willing to pay a premium for this convenience and a Moscow-based airline will therefore try to extract more profit from these passengers without loosing the more price-minded Delhi-XXX-Havana customers.

This is essentially down to Revenue Management - "how can we make the most money from this flight?"

TL;DR: It saves you money in the long run, and is about filling the plane, not charging everyone the same price per mile

Airlines regularly provide different prices for routes, parts of routes, different countries of purchase etc. They'll charge you more/less based on the class you fly, how early/late you book, how flexible you are, where you live, where you purchase the ticket, where you're flying to/from.

For example if you're buying a ticket from the UK, you're likely to pay more for a Heathrow->Jakarta flight than someone from Jakarta is - the airline know you likely have more money and higher expectations of cost, so they'll charge you more.

It's not about "here's how much the plane costs to run, it holds 200 passengers, so divide that by 200 and that's the price of a ticket", it's about "how much money can we make?"

It's the same reason that ticket prices will be low a year before the flight (to encourage early bookings/cover the basic costs/get some cash flow), then will go up a couple of months before the flight (when most people are buying) and drop as it gets close to the flight date and the airline just wants to get the plane full.

Note that you won't always find it's cheaper to buy the separate tickets, and in many cases it's more expensive - it's just that the airline has found (or predicted) that they'll make more money that way. This seems counter-intuitive when we compare it to most other purchases, where the price is set at (cost to make + profit margin) and is fairly fixed, but it's pretty standard in the Airline industry.

In cases like the one you mentioned the chances are that the total route makes good money, but the airline knows that the plane won't be full. They also know that people won't pay full price for the "segments" of the journey (perhaps they have competition from low-cost carriers) but they want to fill the plane up. They can't afford to offer everyone the lower price (or they'd lose money on the flight), but they can sell some of the "one segment" tickets for above-cost and therefore make some profit, or covers some of their fixed costs.

To run a plane there are fixed costs (pilot wage, airport fees) and variable costs (fuel) - the segment costs are paying for the extra fuel to carry that person and their baggage, plus a little extra towards the pilot's wages, so it's still making that journey cheaper for you than if the seat was empty and you had to pay the whole pilot's wages.

It seems unfair, but it's actually making your journey cheaper - the airline would have to charge the full-journey passengers more if there were empty seats.

Think of it this way, I have a two seater sports car and want to drive from Paris to Moscow, via Munich. It's going to cost me €200 in fuel, maintenance etc. I want to make my car cheaper than the train. I decide to pick up a hitch-hiker for a fee, to get my costs down to half

I try to find someone to split the costs with me (€100 each), but nobody else wants to go to munich (I can't fill my car/plane). I know someone who wants to go Paris-Munich, and someone else who wants to go Munich->Moscow, but neither of them want to pay €50 for half of the journey (the local markets don't support the same cost) so I decide to charge them €40 each

I charge them €40 each, meaning I get a total contribution of €80 towards the €200 - and I'm still paying €120. "But that's not fair!" I cry, "They're not paying as much!". It's at this point I realise that although they're getting a better deal than I am, I'm still only paying €120 instead of €200... if I tried to charge them €50 each, they just wouldn't have come along and I'd be left with the full cost.

Airlines have to work in the same way - offering the best price to as many people as possible to match market conditions and fill the plane to cover the costs. Sometimes, that feels unfair - but without the unfairness, it would cost everyone more.

Source: I've spent the last few years working in Airline Revenue Integrity