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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

#31

Post by gruez »

grugagag wrote: post #26
Henchman21 wrote: post #12

Earlier quoted context omitted.

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.

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.

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#32

Post by Zak »

kube-system wrote: post #25
Zak wrote: post #5

Earlier quoted context omitted.

Southwest just started charging for checked bags after over a decade of being the airline that doesn't do that.

> over a decade over half a century!

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#33

Post by sct202 »

paxys wrote: post #16

Low effort, AI generated, catchy title. Perfect recipe for making it to the top of news aggregators.

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#35

Post by daedrdev »

pasquinelli wrote: post #19
onlyrealcuzzo wrote: post #9

Earlier quoted context omitted.

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...

> 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.

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#36

Post by tines »

legitster wrote: post #24

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 f…

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#37

Post by bix6 »

djoldman wrote: post #10

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…

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#38

Post by nohat00 »

gruez wrote: post #18
paxys wrote: post #16

Low effort, AI generated, catchy title. Perfect recipe for making it to the top of news aggregators.

>AI generated What's your basis for this?

* 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

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#39

Post by wagwang »

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.

Re: The economics behind "Basic Economy" – A masterclass in price discrimination

#40

Post by bluGill »

djoldman wrote: post #10

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…

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.
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