The economics behind "Basic Economy" – A masterclass in price discrimination
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The economics behind "Basic Economy" – A masterclass in price discrimination
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Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#2I 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.
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#3I 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?
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#4It'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.
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#5I 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 l…
Southwest just started charging for checked bags after over a decade of being the airline that doesn't do that.
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#6I 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?
> All told, is all this chicanery benefiting airlines?
I am pretty comfortable it contributes to revenue and profit outcomes the board likes.
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#7I 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 l…
Southwest just started charging for checked bags after over a decade of being the airline that doesn't do that.
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.
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#8I 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?
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
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#9I 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?
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...
Re: The economics behind "Basic Economy" – A masterclass in price discrimination
#10It 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.