[HN Gopher] The economics behind "Basic Economy" - A masterclass...
___________________________________________________________________
The economics behind "Basic Economy" - A masterclass in price
discrimination
Author : bdev12345
Score : 64 points
Date : 2025-06-24 19:55 UTC (3 hours ago)
(HTM) web link (blog.getjetback.com)
(TXT) w3m dump (blog.getjetback.com)
| joe_the_user wrote:
| I just got back from a week-long vacation where I flew Southwest.
| It was my first Southwest flight in a while and I will now not
| fly any other airlines.
|
| The rise of "basic economy" seems a lot like the general
| phenomena of "enshitification" and has a similar motive - degrade
| your product to squeeze the last drop out of the consumer. And it
| seems logical that charging by the "degree of shit" in a product
| means every level is going to be shit actually.
| Zak wrote:
| Southwest just started charging for checked bags after over a
| decade of being the airline that doesn't do that.
| hooverd wrote:
| SW seems to be steadily removing everything that
| differentiated them as a carrier. There's no reason to choose
| them other than pure price for a route now.
| bobthepanda wrote:
| They were able to resist enshittification for a long time
| because they were actually one of the most profitable
| airlines and were able to keep their unique culture.
|
| Then they had a flight meltdown, lost a bunch of money, and
| got targeted by activist investors.
| Zak wrote:
| I don't quite follow what would motivate activist
| investors to pressure a company to stop doing the things
| that made it profitable.
| WorldMaker wrote:
| You are thinking long term profitable, but most of the
| current "activist investors" barely think about short
| term profitability, and mostly from the perspective of
| their own profitability selling shares or running a short
| somewhere and "indirectly" helping their short by giving
| bad advice to a different company. They mostly read the
| quarterly reports and that mostly to look for "easy
| profits" Company A is making that they could pressure
| Company B to do for a quarter or two to bump stock prices
| before they sell again. Swoop in when a company has a bad
| quarter, pressure them to have "one good quarter", sell,
| rinse, repeat. (Makes them good money, makes most
| companies a race to the bottom to appease their whims as
| short-term investors.)
| Zak wrote:
| It seems to me that tax incentives favoring dividends
| over share price growth might make for a healthier
| economy. Am I way off base with this?
| WorldMaker wrote:
| It's a good idea in theory if you can somehow force
| dividends to some long term vesting strategy to reward
| long term investors over short term investors.
|
| It's a bad idea in historic practice, given the very
| origin of the turned out to be awful, something of the
| root of much short-term-ism and "activist investors" in
| the first place, "fiduciary duty to the shareholders"
| phrase was the awful Ford v. Dodge Brothers case where
| the Dodge Brothers were some of the earliest investors in
| Ford (as partners and parts dealers for Ford) and went to
| court to argue that record profits in a particular
| quarter should not be invested in long-term capital
| investment (a large new plant) and R&D as Ford was
| planning to do, but presented as a windfall of a large
| dividend to shareholders instead. The court agreed with
| the Dodge Brothers for, er, dodgy reasons, and the clear
| conflict-of-interest motive from hindsight of the Dodge
| Brothers "activist investing" in that moment was to
| notoriously use said dividend windfall to expand their
| efforts as a Ford competitor (produce more Dodge cars, if
| you haven't guessed) from Ford's own profits.
|
| It's not a single court case that gets us to where we are
| today with short-term thinking in Wall Street, but that's
| such a weird foundational one.
| kube-system wrote:
| > over a decade
|
| over half a century!
| Zak wrote:
| I could have phrased that better; Southwest was the airline
| that didn't during a period where all the others did. Prior
| to 2008 or so none of the major airlines in the USA did.
| gruez wrote:
| >The rise of "basic economy" seems a lot like the general
| phenomena of "enshitification" and has a similar motive -
| degrade your product to squeeze the last drop out of the
| consumer. And it seems logical that charging by the "degree of
| shit" in a product means every level is going to be shit
| actually.
|
| How do you draw the line between "cutting frills that nobody
| really cares about" and "enshitification"? Prior to airline
| deregulation air travel was luxurious[1]:
|
| >BERAS: But it's not just that the planes were more spacious.
| Back then, the airlines would go out of their way to compete
| with each other on amenities.
|
| >MALONE: Right. Like, the plane we're on, it had a lounge in
| the back. You might get a six-course meal or a fancy cocktail
| included.
|
| >BERAS: Plus, all kinds of other perks, like custom playing
| cards delivered in a fancy case, shaving kits delivered in a
| fancy case, cigarettes delivered in a fancy case.
|
| >MALONE: Yeah. And, you know, as we get into the '70s, the
| amenities got ridiculous. Airlines even had meat carving
| stations, so flight attendants would roll the meat right up to
| you and carve it up right there in front of you at your seat.
|
| >BERAS: But perhaps the pinnacle of all amenities was...
|
| >VAN DER LINDEN: They had a piano bar, an honest-to-God piano.
|
| But air fares dropped after deregulation, after much of these
| perks were reduced[2]. Of course, people who wanted those
| amenities would rather than they be bundled, because they'd be
| paying for it anyways and airlines could benefit from economies
| of scale for offering those amenities. They might even call it
| "enshitification", if the word was around back then. But most
| people would rather that their experience be a little crappier
| but save a few hundred bucks on airfare instead.
|
| [1] https://www.npr.org/transcripts/1197960905
|
| [2]
| https://cdn.theatlantic.com/assets/media/img/3rdparty/2013/2...
| Henchman21 wrote:
| I frequently wonder if these folks attempting to squeeze the
| very life out of the "consumer" (I prefer the phrase "citizen &
| voter") ever stop and wonder what will happen when there's
| nothing left to squeeze? Because that day is coming sooner
| rather than later. Its my suspicion that it will end with
| blood. Rather a lot of it.
| grugagag wrote:
| As if businesses had more than a few quarters in mind. I
| really don't think they care for they're already extracted
| the profit when shit hits the fan.
| gruez wrote:
| The employees and executives might not care, but surely the
| shareholders do? If they really think "shit hits the fan"
| is going to happen any time soon, then they should sell
| their overvalued shares and buy some fixed income
| instrument like treasuries. Except they don't, because
| that'll be a dumb move. Despite the saying of "companies
| only care about the next quarter" being around for decades,
| the stock market has been on a tear, with little sign that
| "shit hits the fan" is going to materialize any time soon.
| esafak wrote:
| I prefer airlines that don't nickel and dime. In fact, I prefer
| to fly less since the experience has consistently deteriorated
| over decades. If you travel internationally you get the added fun
| of dealing with border agents. And even they have discovered
| price discrimination, with their VIP lines.
|
| All told, is all this chicanery benefiting airlines?
| ggm wrote:
| > _All told, is all this chicanery benefiting airlines?_
|
| I am pretty comfortable it contributes to revenue and profit
| outcomes the board likes.
| tonyedgecombe wrote:
| It feels like competitive pressures in some markets drive
| away all the profits leaving corporations with no choice but
| to engage in underhand tactics.
|
| Car rentals and printer inks are a couple of examples of the
| same process leading to really shitty behaviour on the
| suppliers part.
| ggm wrote:
| I agree. Boards should be under more pressure to deliver
| longterm outcomes of benefit beyond their immediate board
| term, KPIs and rewards. Possibly the path out is to make
| some board renumeration tied to 5 and ten year success.
|
| These shitty LCC patterns make short term revenue and the
| long term consequence of market share moves don't get
| factored in.
| nemomarx wrote:
| I think it's kinda race to the bottom / lemons market. A lot of
| people search for flights through aggregators so you need to
| optimize for the price shown there, and the customer doesn't
| know if that's the real price or if there'll be add ons so they
| won't go for a more expensive one on faith.
|
| Best bet is finding out which airline treats you best and going
| all the way to a loyalty card with them or something I guess?
| that seems to work out a little better
| bluGill wrote:
| I've heard it said that airlines make all their money from
| interest payments on points. That is the credit card
| companies are buying miles today, and when the flight is
| taken the airline faces the charge in between that time they
| invest the money and collect the interest.
|
| I'm not sure if it is true, but it is an interesting insight
| even if not strictly true.
| GeneralMayhem wrote:
| It's not just time-value. It's also not just
| tying/advertising (although it is some of that - if I'm
| getting a ton of "free" points to American, I'm more likely
| to fly with them). It's both of those, and so much more.
|
| Loyalty points work like gift cards in that huge numbers of
| them go unredeemed for any value, so selling them is just
| printing money. And unlike gift cards, which are typically
| denominated in currency, airline points don't have a fixed
| exchange rate to USD, so the airline can sell them to Chase
| or whatever for $0.01, and then if it needs to rebalance
| the books to shed the outstanding liability it can easily
| adjust the point costs of flights to make them only worth
| $0.009 - it's the same as a price hike, but in a way that's
| less noticeable to most customers most of the time. And
| that's assuming they don't just sell the points at an
| outright profit to begin with.
|
| You can find a number of analyses showing that airlines
| operate at a loss if you set aside the miles-economy
| revenue streams. United famously got a line of credit
| secured against their loyalty program in 2020, in which
| they and their creditors valued the loyalty program at more
| than the value of the entire company of United Airlines -
| which would naively imply that the actual airline, the part
| of the company that owns large expensive machines and
| actually sells a product to consumers, had _negative_
| value.
|
| Here's a longer overview with numbers and sources -
| https://www.youtube.com/watch?v=ggUduBmvQ_4
| supertrope wrote:
| Kind of like how GM's credit arm was briefly more
| profitable than the actual manufacturing.
| onlyrealcuzzo wrote:
| It's made it so that relatively poor people can afford to
| regularly fly all over the world, which is a relatively new
| thing.
|
| Lowe middle income people in lower middle income countries can
| afford to fly somewhat regularly, and even internationally,
| too.
|
| Flying used to be just for the rich only as far back as the
| 60s, and for nobody as far back as 200 years...
| redczar wrote:
| The vast majority of the world's population can't afford to
| fly. The relatively poor part of your comment is weird.
| Flying is still for the rich.
| grugagag wrote:
| Flying used to be for the ultra rich, people'd gather
| around them to listen to their plane ride story. The poor
| in this case are not the poorest but poor comparatively
| onlyrealcuzzo wrote:
| Okay, sure, if lower middle income people in China are
| rich.
|
| Even middle income people in India can afford flights...
| pasquinelli wrote:
| > It's made it so that relatively poor people can afford to
| regularly fly all over the world, which is a relatively new
| thing.
|
| has _it_? do what is _it_ again?
|
| >> All told, is all this chicanery benefiting airlines?
|
| i'm really curious how screwing passengers has done these
| things.
| daedrdev wrote:
| Airlines are actually very low margin business. Thus, all
| these pricing tactics merely offset the drastically cheaper
| tickets. It makes sense, their margins are so low that they
| have to nickel and dime everything to make a small profit
| in good years and avoid going under next recession.
| grugagag wrote:
| Yes, it's a way to extract something from all buckets. Higher
| income people you can get more money but with low incoming
| ones you get a lot more quantity since there are way more
| lower income people. Laws and regulations prevent people
| standing up or overloading planes with passengers so this is
| the alternative.
| FuriouslyAdrift wrote:
| I'd rather go back to only being able to fly once every few
| years as opposed to the bacchanal that is Ryanair...
| daedrdev wrote:
| you can do that by choosing a different airline
| legitster wrote:
| > All told, is all this chicanery benefiting airlines?
|
| Yes.
|
| An example is paid baggage. It used to be that stowage space
| was mostly a waste of capacity on an airplane. But with the
| help of modern software making coordinating shipping easier,
| they can make lucrative money shipping cargo on passenger
| flights.
|
| So encouraging passengers to not bring bags and keeping that
| capacity for cargo is a feature, not a bug.
| FuriouslyAdrift wrote:
| I always ship my baggage via insured carrier (Fedex, DHL,
| etc) and take a small carry on for immediate needs. It's MUCH
| cheaper and safer.
|
| Or I just don't bring anything that won't fit in my lap.
| Kon-Peki wrote:
| FedEx'ing baggage between home and a distant hotel is
| awesome. I haven't done it recently, so maybe with airline
| fees it is always cheaper. It used to be that you had to
| have a corporate account with enough discounts to make it
| cheaper than checked luggage.
|
| Big hotels host lots of conferences, legal depositions,
| business shows, etc. They get a FedEx truck almost daily
| and don't blink if a package arrives addressed to you with
| "Guest checking in on XXXX date" appended to it. It happens
| all the time! And when you leave, you call the front desk
| and ask them to take a box to the loading dock for the next
| FedEx truck.
| legitster wrote:
| Alternatively, my brother has done a lot of business travel
| in his life, and I love the advice he gave me:
|
| "Never pack more than you are willing to carry a mile down
| a gravel road in the rain"
|
| I have yet to regret a trip where I pack extremely light.
| GeneralMayhem wrote:
| The tradeoff on short domestic flights is that it encourages
| more - and larger - carry-ons, which slows down
| boarding/deplaning and therefore adds to turnaround time. If
| I don't have to pay for checked bags, I'd often prefer to
| have mine checked, especially if I have a connection - but
| since I do, I'll squeeze everything into a carry-on roller
| bag instead. Personally, it only takes me an extra second or
| two, but when you have a whole family doing this and only
| parent who can actually reach the overhead bins, it bogs down
| the whole aisle.
| rufus_foreman wrote:
| >> All told, is all this chicanery benefiting airlines?
|
| No. There is no competitive advantage. If they don't implement
| price discrimination, they go bankrupt. If they do implement
| price discrimination, they still go bankrupt: https://en.wikipe
| dia.org/wiki/List_of_airline_bankruptcies_i....
| ilamont wrote:
| > I prefer to fly less since the experience has consistently
| deteriorated over decades.
|
| I never liked flying, but was able to put up with it better
| when I was younger.
|
| Nowadays, I get some satisfaction by leveraging credit card
| points through my business to get "free" tickets. I mentally
| steel myself to the unpleasantness of the airport, boarding,
| and flying, and try to get as much work done on my laptop as
| possible when I am sitting down so at least I can feel that I
| accomplished something by the time I reach my destination.
| dkjaudyeqooe wrote:
| > If you travel internationally you get the added fun of
| dealing with border agents
|
| That's avoidable. If you are a citizen of an advanced economy
| flying to another you can just use the automatic passport
| gates.
| ggm wrote:
| It's already a regulated market. If we want to stop fare
| practices we do not agree with then mandating specific bundling
| in luggage, legroom, food and credit/rebook is available as a
| regulation. And of course the economic arguments against it, and
| legal/philosophical.
| gruez wrote:
| >If we want to stop fare practices we do not agree with then
| mandating specific bundling in luggage, legroom, food and
| credit/rebook is available as a regulation.
|
| Let's take the one of the items as an example: I rarely rebook,
| so I'm presumably benefiting from this price discrimination.
| Why should I support that it be forcibly bundled? I might be
| sympathetic to having some sort of baseline fare for
| advertising purposes, so it's not a race to the bottom to get
| the lowest sticker price, but I can't see how it's justified to
| limit consumer choice by disallowing the sale of restricted
| fares.
| ggm wrote:
| I'm not saying you're wrong but this is also much the same
| argument as "why do I pay more tax when I am not using public
| health" or other community wide benefits. Philosophically you
| either believe in a price which benefits the community at
| large, or you want the lowest price outcome for yourself and
| others to be exposed to their costs.
| gruez wrote:
| >Philosophically you either believe in a price which
| benefits the community at large, or you want the lowest
| price outcome for yourself and others to be exposed to
| their costs.
|
| How does the community benefit when there's only one price
| for airfare, and there isn't any mechanism for the poor to
| save a buck? I rarely rebook tickets, probably because I
| rarely fly for work, so I can book tickets months in
| advance. I suspect it's the same for most vacationers, so
| they're benefiting from this policy, likely at the expense
| of people who need to cancel last minute (corporate
| flyers?). The same goes for meals. Is it really that hard
| to pack a lunch that we need to _mandate_ free lunches for
| everyone?
| ggm wrote:
| The poor don't save a buck when they next need to fly and
| are exposed to excess costs because of not being able to
| buy the bucket price seat. The mechanistic way this
| usually exposes is "only six seats at this price" and
| they went milliseconds after release.
|
| You truly believe you're right and frustratingly I truly
| believe you're wrong AND I'm lazy and don't want to prove
| it or convince you. It's just what I think. Your examples
| are good. There are equally good rebuttals you could
| steelman for yourself if you wanted to.
| gruez wrote:
| >The poor don't save a buck when they next need to fly
| and are exposed to excess costs because of not being able
| to buy the bucket price seat. The mechanistic way this
| usually exposes is "only six seats at this price" and
| they went milliseconds after release.
|
| Taking this at face value, it means the airline severely
| underpriced their fares, because it was snapped up very
| quickly, which indicates there were people willing to pay
| more that didn't have the chance. This definitely has
| implications for equity (eg. if you're not working a desk
| job you might not be able to spam refresh to snap up
| those airfares), but I'm not too concerned about it
| because airlines are incentivized to fix the problem.
|
| More importantly I don't think this problem even exists.
| Nowadays if you try to book a ticket, you'll be presented
| with a menu of options, with different fare restrictions.
| I don't think I've ever saw a situation where a
| discounted fare was only available for basic economy, for
| instance. You could always pay more or less for the
| different tiers within economy.
| kelnos wrote:
| I think then you have to provide a strong argument for why
| a particular product/service should be considered under the
| "community-wide benefit" umbrella.
|
| Public health is very clearly to me a collective good: I
| benefit from others being healthy in so many ways. Similar
| things can be said about funding schools; I don't have
| children, but I will benefit from the next generation of
| adults being well-educated. Welfare and supportive housing
| reduces crime and general dirtiness and decay where I live,
| so I'm happy that my taxes go toward that (I want _more_
| going toward that, honestly). I don 't need to make
| arguments involving empathy to prove these things make
| sense, which is good when there are so many people not
| motivated by empathy.
|
| But I'm not sure affordable flights is a public good.
| Certainly I _want_ air travel to be accessible to more
| people; it shouldn 't be the kind of thing only well-off
| people can do. (When I was a kid in the 80s/90s, we didn't
| have the money to fly, which limited our vacation choices.)
| But I'm not convinced that regulation should aim to
| "redistribute" cost so that people like myself should pay
| more for flights so others can pay less; that doesn't feel
| like it benefits me or the "public", really.
|
| In general, though, I think the market is actually working
| for once. Airlines have unbundled a lot of things, and then
| there's basic economy as well. Even with airline
| consolidation, (inflation-adjusted) fares are pretty low,
| and if you want a basic economy fare, or even a regular
| economy fare (but without checked baggage or refunds or
| changes), you can get a pretty good price.
| ggm wrote:
| Thats a fair point. I think you may be right this falls
| on the test of public interest, where minimum seat
| dimensions and exit/emergency safety doesn't.
|
| I don't personally LIKE LCC and the unbundling, I tend to
| believe evidence that when you are driven to LCC pricing
| and then factor back in the unavoidable costs it can be
| more expensive than the cheaper bundled product from
| mainlines.
|
| Maybe the limit of regulatory control here should be
| "final total cost must be shown before committing" so
| that all taxes, airport levies, state charges, and other
| unavoidable costs (card processing fees?) are shown in
| the pricing, because I am led to believe a $99 fare can
| wind up $150 or more once all the unavoidable extras in
| that price are factored in.
|
| Basically, I concede.
| GuinansEyebrows wrote:
| > Why should I support that it be forcibly bundled?
|
| we don't all need to benefit equally from every regulation
| all the time for that regulation to be a net positive for
| society.
| Spivak wrote:
| Because your ticket that includes it will be the same price
| as the ticket you're getting now that excludes it. That was
| broadly the point of the article-- the lowest tier fares
| didn't get cheaper, you just had to pay more to get what you
| had before.
| djoldman wrote:
| It appears that taking advantage of human imperfections and
| irrationality are taking up more and more of companies'
| strategies and time.
|
| You've got folks thinking constantly about advertising, pricing
| strategies, dark patterns, network effects that prevent or
| discourage churn, etc., in ways that tend to exploit flaws in the
| consumer's decisioning process or gaps in their knowledge, to the
| consumer's disadvantage.
|
| It feels rare to see an actual new valuable product or
| improvement.
| bix6 wrote:
| Spot on. Surfline gave us a bunch of new features over the past
| year but you have to pay more for them. Gone are the days of
| delighting your customers -- gotta take every penny you can
| from each market segment.
| bluGill wrote:
| You can find people back in 1880 (probably before, but that is
| as old as I've seen something) saying much the same thing. Yet
| we have had a lot of innovation since then.
| slg wrote:
| I think the biggest change in general corporate management in
| my lifetime was the deprioritizing of the concept of goodwill.
| I'm not naive, businesses have always prioritized profit.
| However, there used to be this idea that pure profit
| maximization ruined your brand and reputation. You didn't want
| to be known as the asshole company that nickel and dimes
| everyone or has draconian policies that make people hate
| dealing with you. Now the corporate mindset is seemingly that
| if anyone leaves any interaction with you with any positive
| feelings, you didn't squeeze enough money out of them.
| cosmic_cheese wrote:
| It may just be a misperception on my part, but it appears to
| me that on average publicly traded companies are more likely
| to engage in this behavior and to greater extents than
| private companies. Startups can be pretty bad about it once
| the VCs come knocking, too. Maybe bootstrapped and private
| forever is the way.
| amonroe805-2 wrote:
| Broadly agree, with the one caveat that private-equity-
| owned businesses seem to be even worse than public
| companies in this regard.
| robbiewxyz wrote:
| My gut is this comes down to lack of real antitrust
| enforcement. If your customers have no choice but to come
| crawling back to you then why treat them well?
| supertrope wrote:
| I have no love lost for airlines but they operate in a
| commoditized industry where customers sort tickets by price.
| All of the fat in the industry has been squeezed out and they
| have to claw for $20 here and there on a sale.
| dkjaudyeqooe wrote:
| > All of the fat in the industry has been squeezed out
|
| I don't know where you live but in the US this is patently
| not true.
|
| Airlines are an abusive oligopoly there, with landing slots
| and the like cementing control of certain markets for certain
| airlines.
|
| Ticket prices are much higher than they used to be and are
| much higher than Europe (for instance).
| paxys wrote:
| Low effort, AI generated, catchy title. Perfect recipe for making
| it to the top of news aggregators.
| gruez wrote:
| >AI generated
|
| What's your basis for this?
| meepmorp wrote:
| "AI" the new "shill"
| nohat00 wrote:
| * lots of redundant prose
|
| * vaguely incoherent temporal claims
|
| * outdated coverage of Southwest
|
| * formatting usage of bullet lists and random bolding smells
| a lot like an O3 "deep research" report
|
| * unnamed author
| sct202 wrote:
| I was thinking it could be AI just from the bullet points bold
| statement colon structure, but there's a lot of grammatical
| inconsistencies that I'm not sure an AI would do; for example,
| the writer's periods and commas are sometimes inside the
| quotations, sometimes outside, and sometimes both inside and
| outside.
| w29UiIm2Xz wrote:
| When authoring the article, add grammatical inconsistencies
| to make the contents seem more organic.
| jakub_g wrote:
| Uh, it felt weird indeed reading those super verbose
| descriptions of what airline X did in year Y and what they
| changed in year Z, repeated like 5 times in slightly different
| words.
|
| Note: it's a content marketing article on a blog of a company
| dealing with airline refunds, so it makes sense, you're
| probably right.
| cadamsdotcom wrote:
| This always happens when growth of a good or service slows but
| the provider is still expected to keep delivering growth.
|
| Historically it has led to finding efficiencies - but that takes
| R&D, not just financial engineering.
|
| In the near future humanity will to do a mix of three things: a)
| accept that growth is over (it's not, this is temporary until the
| next thing is invented), b) find a way to return to the frenzy of
| innovation that pushed us to expect growth (likely by leaning
| back in to R&D), and c) legislate the types of squeezing we'll
| tolerate (as the EU is doing)
|
| Companies that invest in R&D need to start winning to kickstart
| growth again. Big companies can do it - eg. Google Gemini is
| topping leaderboards.
|
| While you wait for a return to R&D, contemplate the miracle of
| the complex economy that led us to the point where lower middle
| income people can have a Basic Economy seat on a tin can in the
| sky.
| legitster wrote:
| Very unpopular opinion, but I personally find price
| discrimination somewhat appealing. Both me and the richest person
| on the plane get to the same destination at the same time. And
| yet he payed 4x as much for the same privilege. It's one of the
| few forces left in the economy that actually reduces inequality
| (somewhat).
|
| I'm an absolute cheapskate and I love flying, so I never really
| fall for the need to upsell. I'll fly with my family and not pay
| for assigned seats (I've joked with gate agents "I dare you not
| to sit me next to my children" - in reality they are happy to
| make sure you sit together anyway).
|
| I get that people value different things differently, but with so
| much price discrimination the value gets more efficient and you
| increasingly get exactly what you pay for - no more or less.
| Which just unlocks the hacker ethos in me.
|
| At the end of the day, you are paying for insanely fast travel
| across the sky. It's a miracle, let alone at the insanely low
| prices you can get these days.
| tossandthrow wrote:
| I don't think it is an unpopular opinion at all.
|
| The airline sector had this memory of its "hey days" - but the
| price has conviniently been forgotten.
|
| From my perspective I would love if the airlines would skip
| entertainment systems and food on long haul flights. I use my
| phone for l entertainment, and see the value of airline food as
| a negative value (i try to fast when I travel, but I am bad at
| declining food).
| tines wrote:
| I too was initially wondering what the problem was with price
| discrimination---it seems like it's just offering a worse
| product for less money, so everyone gets to choose.
|
| But from what I understand, the article is saying that the
| problem is that the worse product is _artificially_ worse, in a
| way that is not commensurate with quid pro quo consumption like
| we're used to.
|
| If I pay less for a Macbook with worse specs, that's "good"
| price discrimination, because Apple gets to give me something
| of intrinsically lower value that it cost them less to produce,
| and I give them something of lower value (less money) that it
| cost me less to acquire.
|
| But an airline _creating_ a bunch of hoops for you to jump
| through (the article lists "no advance seat assignment, no
| ticket changes, last boarding group, baggage restrictions") in
| an effort to cause people whom they can juice for a little more
| cash to identify themselves, is scammy and scummy behavior. I
| don't want to see companies purposefully making my life worse
| in order to juice me for as much as they can.
| legitster wrote:
| I think this is true in a general sense - buyers are always
| very susceptible to an upsell.
|
| But also in general people are very astute at booking
| flights. Maybe the first time someone flies Spirit Airlines
| they feel like they've been conned. But I think most buyers
| now are just very particular about their features (Google
| Flights and Kayak both make these restrictions very prominent
| during the booking process)
| collinmcnulty wrote:
| I'm not sure I buy the "artificially" as it implies that they
| have made things worse for Basic Economy in a way that
| doesn't relate to distributing a scarce resource. Boarding
| priority and such are scarce and it makes some sense there's
| a market price for them.
|
| I am however concerned about the "everything is for sale"
| mentality this has brought. It used to be that some things
| couldn't be bought with money, you had to wait in line like
| everyone else. More and more I see "pay to cut the line" and
| I think that drives class divisions and further damages a
| feeling of community and egalitarianism.
| stego-tech wrote:
| So aside from potentially allowing more price-limited consumers
| the ability to fly via Basic Economy fares, it's just
| enshittification of the Aviation Industry: worse products at
| higher prices.
|
| We really need to step up regulation to disincentivize "infinite
| growth" as a mindset and prioritize stable returns over time
| (e.g., dividends and profit sharing). Everything is slowly
| getting worse _and_ more expensive, and contrary to (seemingly)
| popular belief there is no "floor" to reach in this foolish
| pursuit. Businesses and capital will always pursue more money for
| themselves no matter the cost to consumers, workers, vendors, or
| governments, unless _something_ incentivizes more societally-
| healthy behaviors.
| wagwang wrote:
| Aren't flights at an inflation adjusted all time low and most
| airlines operating at a razor margin? Seems like the market doing
| their job. Also price discrimination sounds a lot worse than what
| it really is? Idk, I don't like that air travel is so easily
| accessible but, the pricing stuff is the least of our worries.
| kelnos wrote:
| > _Also price discrimination sounds a lot worse than what it
| really is?_
|
| I usually think of price discrimination as the first- or third-
| degree types (how they define them in the article), that is,
| charging people different amounts based on how much you think
| they are willing to or can pay, not on any differentiation of
| the product. That practice always sounded dirty and dishonest
| to me.
|
| I wasn't aware that something like basic economy could be
| considered (second-degree, using their terminology) price
| discrimination; to me that's just offering a different product,
| with different features and different quality, at a different
| price. That honestly seems entirely reasonable to me; basic
| economy is just a different class of service, similar to how
| business class is different from economy class. I don't think
| of biz/first class as price discrimination; to me it's just
| selling a different, higher-quality product for a higher price.
| dkjaudyeqooe wrote:
| > Aren't flights at an inflation adjusted all time low
|
| Yes, due to improved technology and equipment and because
| prices have been historically very high.
|
| > most airlines operating at a razor margin
|
| No, many airlines operate in imperfect markets and reap
| excessive profits compared to other airlines.
| TheJoeMan wrote:
| With the oligopoly situation, us Americans don't usually have a
| point of reference, so here's one from a trip I've taken:
| Indonesia to Malaysia (DPS to KUL), an international 3 hour
| flight one-way, for $62 on Air Asia [1]. There is enough leg room
| that you can cross your legs, and they will feed you a meal!
| There may be some regional differences in "labor" like the US
| Major airlines claim, but I don't think enough to match the
| reality of their scalping.
|
| [1]
| https://www.google.com/travel/flights/search?tfs=CBwQAhoeEgo...
| kelnos wrote:
| > _With the oligopoly situation_
|
| I saw the article use the term "legacy carrier", and was
| curious about its actual definition, and while skimming its
| wikipedia article read that we went from ten major US carriers
| in 1991 to just four today (Alaska/Hawaiian, American, Delta,
| United). Oof.
|
| While many great things did come from deregulation, US
| airlines' tendencies to race to the bottom and consolidate are
| not among them. To be fair, though, the more consolidation, the
| less competition, and the less of a need for that race.
|
| So I'm not sure. Certainly labor costs elsewhere contribute to
| significantly lower-cost routes, and flights in the US are
| _way_ cheaper than they were in the 80s and prior, and I think,
| inflation-adjusted, they 're still historically very low,
| perhaps at their lowest. So what's more expensive in the US?
| Labor, certainly. Regulation imposes a cost, perhaps more of
| one here than elsewhere? Are many carriers in other places in
| the world heavily subsidized by their governments, so they can
| offer cheaper fares and better service?
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