Free Market: Airplane Style

How many times have I been flying and need to get off that plane to make my gate?  Plenty.  And how many times did I muse, “I’d pay $50 to be that first guy off?”

Again, plenty.

And, as is the case with me, I began to imagine a world where the seats in a plane could be offered on the open market.

I never figured out exactly how it might work, but say you were arriving at your destination, say Minneapolis, and you didn’t need to be anywhere for three hours.  Why, you might be willing to TAKE $50 to be the last guy out.

Or, conversely, you do need to hit your business meeting or make your connection, that fifty might be a small price to pay.

The wonders of the market.

Well now it seems that just such a market is opening for seat location.  Not front or back like I envisioned, but aisle and window – which, really, is just a natural extension of my brainchild:

Airlines are reserving a growing number of window and aisle seats for passengers willing to pay extra.

Now I’m sure that we’re gonna get the usual hand-wring about greedy airlines and all sorts of nonsense about corporate profits.  But what we DON’T point out is the insatiable greed of the consumer.  It’s the consumer that has this never ending desire to find the absolute cheapest fare on the internet.  What with Orbitz, Amazon, Expedia and everything, the consumer is driving the airlines to produce the lowest possible basic fare so that they appear near the top in search windows.

If, instead, airlines could set their fares without fear of greedy consumers comparison shopping, why, the fares would include all these “extra add-ons” and there wouldn’t be such agitation.

But we don’t live in such a world.  We do live in a world where people do act in there own self interest.  And when it comes to airplane tickets, they react in the same manner as they do when they purchase gas or corn or housing; they shop for the best deal.

So, the good news is that if you wanna sit net to the window so that you can get a little sleep, you can.  And if instead, you are willing to pay a little less for your ticket, you can do that as well.

Once again, the market delivers.

7 responses to “Free Market: Airplane Style

  1. And they should charge for carry-on unless you fly 30k+ miles/year. I’ve had a number of flights get held up because some dumb-dumb wanted to cheap out and sneak their oversized suitcase on the plane so they wouldn’t have to pay the extra $50.

    • I’ve had a number of flights get held up because some dumb-dumb wanted to cheap out and sneak their oversized suitcase on the plane so they wouldn’t have to pay the extra $50.

      I wish they would go the other way and build the price into the ticket and reduce it for taking a center seat. But then they’d lose the lower price ranking on the Orbitz.

  2. Ok….you happen to have hit on one of my favorite topics here….so I am compelled to comment.

    Yes, the fare in aggregate is cheaper if you are sitting in a non premium center seat, but that’s just the airline charging incremental fees. Your fare didn’t go down as a result of you selecting the center seat (or preferring not to pay the upcharge.)

    If two people, let’s call them “Karyn” and “Phil” are traveling on the same flight – let’s say for sake of argument our hypothetical travelers booked with same restrictions, fare classes, etc (which in and of itself is a WHOLE separate ball of confusing wax). Karyn wants a nice seat, because she’s spoiled. Phil doesn’t mind sandwiching himself in between two large Midwestern men. When they made this trip years ago, they both paid 1000 dollars each. Now, in the era of premium seating, Karyn and her fancy seat would spend 1100 and Phil in his restroom-adjacent seat would still spend 1000. So on average, the fares have increased. If the free market were fully at play, wouldn’t the average fare have stayed at 1000, since Phil should have spent only $900 for his ticket with crappy seat assignment?

    The fair market is certainly at play here as the airlines have discovered all sorts of nifty ways to charge for “add-ons” that used to be included in the regular ticket. So yes, they have monetized part of their service and sure, if there is demand, it will continue to be monetized.

    And by the by, Orbitz was created by a consortium of airlines as a way to get a foothold in the burgeoning online ticketing market, with the nice little benefit of not having to pay any agency or booking fees. And oh, by the way, bookings on Orbitz just happened to disproportionately favor the airlines which created it…. It was the airlines’ way of competing in the free market with other online booking agencies and they did a great job with it….

    • but that’s just the airline charging incremental fees. Your fare didn’t go down as a result of you selecting the center seat (or preferring not to pay the upcharge.)

      Sure. However, fares aren’t in a vacuum. Tickets go up for all kinds of reasons; fuel, demand, extortion to the pilot, flight attendant and ground crew unions and government actions that “protect the consumer.” You think charging airlines thousands of dollars if they’re late is going to reduce fares?

      When they made this trip years ago, they both paid 1000 dollars each. Now, in the era of premium seating, Karyn and her fancy seat would spend 1100 and Phil in his restroom-adjacent seat would still spend 1000. So on average, the fares have increased. If the free market were fully at play, wouldn’t the average fare have stayed at 1000, since Phil should have spent only $900 for his ticket with crappy seat assignment?

      Right. So let’s say we have 24 rows, 6 seats each. $1000 a pop is $144,000 in revenue for the plane. After taking into account all the added costs, the airline figures that they have to raise that from $144,000 to $145,200. They could dived that across all seats in which case we go from $1,000 a seat to $1,008.33. However, airlines don’t wanna show up 8 bucks and change higher on Travelocity so they have to figure out another way.

      They come up with a method whereby they can charge some people and let others fly for the same price, even though prices go up.

      So, they take the first 12 rows, and charge 25 bucks for the window and aisle. Boom, 1200 bucks just like that. In essence, the rest of the plane is flying for 8 dollars cheaper.

      And by the by, Orbitz was created by a consortium of airlines as a way to get a foothold in the burgeoning online ticketing market, with the nice little benefit of not having to pay any agency or booking fees.

      I am not moved by an argument that, at it’ core, is really calling foul for a company selling it’s own tickets.

      And oh, by the way, bookings on Orbitz just happened to disproportionately favor the airlines which created it

      Yes. The same could be said of TV advertising too.

  3. Curious – why is it that seats to and from DFW remain some of the highest-priced seats on the market today? Would we attribute this to free market forces? For example, price out YEG-PUJ vs. DFW-PUJ, or LAS-DFW vs LAS-CHI. You used to be able to find a flight on Southwest for under $100, and American Airlines used to compete well in the DFW market as it was their hub.

    Now that AA has its financial troubles, however, they don’t seem to be discounting as much so I believe the other airlines have colluded to keep their prices artificially high through that hub knowing that AA can’t/won’t compete. For the small business traveler, this sucks.

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