£200 cheaper to buy a ticket from Manchester via Heathrow than the flight direct from Heathrow.

It’s a complete mystery to me as to how that makes any sense

From Manchester via (somewhere) the airline you’re looking at (BA I guess) has lots of competition – e.g. you could also fly on Air France via Paris, KLM via Amsterdam, Lufthansa via Frankfurt – all flag carriers offering a one-stop service (obviously I don’t know where you’re going so those airlines may not fly there/there may be others).

From London non-stop there’s no-one else (or max 1 other option) so less competition = higher fare.

It’s just supply/demand although as you say, from Manchester you are (on the face of it) getting more for less, but when you look at it from the airline’s POV and what price they can command for what they can offer, it makes more sense.

Some of the budget airlines, just even lots of people checking out the prices for a particular flight can push up the prices.

There were flights from Heathrow via Frankfurt and CDG, which is why I checked from Manchester as I figured we might be able to go Manchester – Frankfurt – Seattle instead of LHR – Frankfurt – Seattle, instead I found the flights ended up being Manchester – LHR – Seattle

Its no mystery just the results of a healthy competitive market! People have a choice if they live in the South East they could always take the train to Manchester if they would prefer to take the £200 saving and the extre hassle

It’s less convenient to fly via somewhere so the ticket is cheaper. Airline tickets are priced against convenience not on a cost plus basis.

Timewise we’re midway between the two so it almost seems worth the extra flight time to save £500