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Airlines are charging solo passengers higher fares than groups

thriftytraveler.com

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Re: Airlines are charging solo passengers higher fares than groups

#411

Post by JoshTriplett »

gruez wrote: post #405
JoshTriplett wrote: post #351

Earlier quoted context omitted.

> They also have the poorest who have cheap credit cards subsidize the richest who have the best cards and receive most of the rewards. This is false. https://x.com/patio11/status/1902555603534295115

I don't find the thread convincing. The "standard" argument is that grocery stores bake in a 2% (or whatever) interchange rate into their prices, but only rich people get 1% (or whatever) back in cash back, whereas poor people don't. As a result, poor people are paying 1% higher prices on goods compared to rich people. Patrick doesn't really dispute this, but tries to argue that this doesn't matter because rich peopl…

> The "standard" argument is that grocery stores bake in a 2% (or whatever) interchange rate into their prices, but only rich people get 1% (or whatever) back in cash back, whereas poor people don't. As a result, poor people are paying 1% higher prices on goods compared to rich people.

And the thread counters that in several ways: rich people spend more in total at the store so their interchange costs are more than made up for by actual spending; and poor people are getting different rewards in exchange for the interchange system, such as free checking/banking (which was made free by using interchange fees to subsidize it so there aren't monthly fees).

To be clear, I'm not suggesting that the financial system overall is particularly fair. If you want cases where it's extremely unfair, a target-rich environment would be bank accounts that have fees that just so happen to disproportionately affect poorer people (e.g. overdraft fees).

But credit card reward programs aren't a case of transferring money from poor individual cardholders to rich individual cardholders; credit cards are a case of transferring money from poor and "rich" cardholders to ultra-rich credit card companies. The right target for the ire, there, is the credit card company, not the "rich" individual cardholders. This is a standard divide-and-conquer tactic: better to pit low-income and high-income people against each other, rather than cast attentions on the very large companies that have constructed a system to profit heavily from both of them.

Re: Airlines are charging solo passengers higher fares than groups

#412

Post by arcticbull »

jdeibele wrote: post #408
arcticbull wrote: post #382

Earlier quoted context omitted.

> I once tried to book a flight with the same-day return; the price for the return flight was mad expensive. The same return flight was a few hundred euros cheaper if you booked the initial flight a day earlier. Minimum stay durations, like advance purchase restrictions, are a common part of fare construction. > That's also why none of this is advertised: it's not a discount, but a "we think you can pay more, so we'l…

I didn't know what a GDS was. Apparently it's a Global Distribution System and there's 4 major ones, including Sabre which I've heard of and 3 that I haven't. I don't know how a normal person would have access to any of them. They're described as being offered via subscription to businesses. https://www.bookingninjas.com/blog/gds-system-top-reasons-wh...

You can find the fares on expertflyer.com if you're curious but you can also see the fare rules usually during the checkout flow.

[edit] You can probably see them on ITA Matrix too, I can't remember.

Re: Airlines are charging solo passengers higher fares than groups

#413

Post by AStonesThrow »

soperj wrote: post #115
n8cpdx wrote: post #20

Earlier quoted context omitted.

Traveling solo is already brutal because hotels and Airbnbs are priced on the assumption of two travelers. Traveling solo essentially costs double automatically because of lodging, and it kind of sucks there’s a double whammy with airfare where, unlike lodging, the penalty doesn’t actually make any sense. I guess as a family be grateful that all hotel rooms come with a 50% (or more) discount per traveler?

Why wouldn't you just stay in a hostel? or rent a room on airbnb?

It may have been 5 years ago or so, yes late 2020, when I had a ridiculous idea to visit Hollywood to see a concert. And I considered staying in a hostel in the area.

"Hostel" may mean different things in different parts of the world. When I was growing up, I heard about "youth hostels" that were mostly in Europe and mostly providing inexpensive accommodations to college-age people who were backpacking through the continent or had a Eurail Pass for traveling, etc. But I have never stayed in one.

When I surveyed a few hostels in Hollywood, it seemed that they were indeed targeting college-age people. Furthermore, they were cultivating a "package deal" atmosphere where there were day trips and coffee hours and programmed activities, for residents to do while they were there. And with limited privacy and shared facilities, there could be bustling activity and interruptions of sleep all night long. They did not seem like places to check in, crash overnight and leave in the morning. And that is probably calculated to appeal to the clientele who are not homeless and did not simply save up $40 by panhandling during the past week.

Re: Airlines are charging solo passengers higher fares than groups

#414

Post by n8cpdx »

patcon wrote: post #76
n8cpdx wrote: post #20

Earlier quoted context omitted.

Traveling solo is already brutal because hotels and Airbnbs are priced on the assumption of two travelers. Traveling solo essentially costs double automatically because of lodging, and it kind of sucks there’s a double whammy with airfare where, unlike lodging, the penalty doesn’t actually make any sense. I guess as a family be grateful that all hotel rooms come with a 50% (or more) discount per traveler?

(Saying all this with respect for those who value privacy more than me ) Hostels are for this market, no? Share physical infra (bathroom/heating/walls) with other humans (aka strangers) and you get the same family discount. You're not obligated to pay the premium unless you want your own bathroom and own personal space like families tend to want As in: families don't get a discount, they just amortise the cost of pri…

I’ve done hostel and like that option when there is a private room. I often/always travel with electronics and things that I want to feel comfortable leaving behind, and I don’t like leaving my laptop and game consoles unattended in communal spaces.

Re: Airlines are charging solo passengers higher fares than groups

#415

Post by dsr_ »

Uehreka wrote: post #402
FabHK wrote: post #380

Earlier quoted context omitted.

Just in terms of simple economics: Without price discrimination, there is one price, and then there are two triangles "left" of the price: What consumers would have paid, but don't need to, that's the consumer surplus (between price and demand), and what producers would have sold for, but got more for, that's the producer surplus (between price and supply). With price discrimination, what happens is that the producer…

I don’t trust that any modern company would actually “use the surplus to subsidize products for poorer consumers”, that sounds like the kind of College Economics fact that isn’t actually true in the real world.

It's the sort of thing that a strong regulator can mandate, but generally doesn't; and the sort of thing that an airline would promote heavily, but not in a way that anyone could rely on: "We donate tickets to Charity X who uses them to fly very sick children to world-class hospitals! Why not donate your airmiles right now, relieving us of some of this obligation without getting the usual tax deduction!"

Re: Airlines are charging solo passengers higher fares than groups

#416

Post by listenallyall »

sfifs wrote: post #322
listenallyall wrote: post #278

Earlier quoted context omitted.

There are lots of things airlines could offer, that they don't. They are all obsessed with "loyalty", why not sell travelers multi-packs (6 flights over the next 12 months) or subscription-like plans? Why a 24-hour cancellation period even for flights booked months ahead... they could certainly extend that to allow for "low-risk" booking or even charging a small fee for the right to cancel up to, say, 3 months in adv…

I've seen most of these in Asia. There's a lot of experiments going on.

Agreed. I participated in a points-based package that used to be offered by AirAsia. It was about $300 for 30 points. Flights between cities/countries were 1 to 3 points each, I probably got 3x my money's worth and still had about 4 or 5 points left over.

Re: Airlines are charging solo passengers higher fares than groups

#417

Post by listenallyall »

ghaff wrote: post #316
listenallyall wrote: post #278

Earlier quoted context omitted.

There are lots of things airlines could offer, that they don't. They are all obsessed with "loyalty", why not sell travelers multi-packs (6 flights over the next 12 months) or subscription-like plans? Why a 24-hour cancellation period even for flights booked months ahead... they could certainly extend that to allow for "low-risk" booking or even charging a small fee for the right to cancel up to, say, 3 months in adv…

United these days has AFAIK pretty generous cancellation though it's in credit rather than outright refund.

Yes, most domestic US airlines have eliminated change fees. But as you point out, it's not possible to get your money back and it's not easy to make changes if you don't have an alternative trip in mind. Cancellability is valuable (see hotel bookings), and yet, people over-value the option - sometimes out of laziness, or they forgot, or they go with the original plan. I have difficulty believing airlines would lose very much if they offered full refundability up to about 3 or 4 months in advance, but they would probably get more bookings, most of which would likely not get cancelled.

Re: Airlines are charging solo passengers higher fares than groups

#418

Post by listenallyall »

zeroonetwothree wrote: post #359
listenallyall wrote: post #278

Earlier quoted context omitted.

There are lots of things airlines could offer, that they don't. They are all obsessed with "loyalty", why not sell travelers multi-packs (6 flights over the next 12 months) or subscription-like plans? Why a 24-hour cancellation period even for flights booked months ahead... they could certainly extend that to allow for "low-risk" booking or even charging a small fee for the right to cancel up to, say, 3 months in adv…

Alaska offers a subscription plan. Realistically most frequent travelers go for business and they don’t care about cost that much so subscription packs wouldn’t be valuable. That’s why loyalty programs instead offer non monetary perks or those that accrue to the individual (points).

I dont really buy into the businesses don't care about cost - maybe for top execs - but companies are obsessed with expense reports and accounting for every penny, reducing per diems, limiting hotel cost ceilings, booking through a specific travel agency, etc. And of course most companies are working overtime in every other department to slash costs, why would travel be spared? Being able to buy flights in bulk and save money seems like it would be highly appealing to finance managers.

Of course, there are exceptions. Governments seem to be some of the worst violators, they really do not care about costs and in many cases they egregiously throw money around for 5 star luxury hotels, first class flights, etc.

Re: Airlines are charging solo passengers higher fares than groups

#419

Post by listenallyall »

phil21 wrote: post #326
listenallyall wrote: post #278

Earlier quoted context omitted.

There are lots of things airlines could offer, that they don't. They are all obsessed with "loyalty", why not sell travelers multi-packs (6 flights over the next 12 months) or subscription-like plans? Why a 24-hour cancellation period even for flights booked months ahead... they could certainly extend that to allow for "low-risk" booking or even charging a small fee for the right to cancel up to, say, 3 months in adv…

Airlines do sell multi-packs with flexible rebooking. At least United and Delta did pre-covid, I haven’t had a use since then though. With even moderate airline status rebooking/cancellations work more or less as described. I can’t recall the last time I haven’t been credited for a flight I ended up not taking, even I did a full on no-show. Without status airlines sell refundable tickets with similar flexible rules,…

Yes most airlines have eliminated change fees, and rebooking isn't too difficult for business travelers. But that's not a refund, and people booking 6 to 12 months out tend to be families going on vacation or to a specific event. So if something changes, there isn't always something else to book, or at least not on that specific airline. Further, what you call "moderate" status - the lowest level - has been raised to require an enormous amount of spending on any one of the major airlines. And don't get me started with "you only need to spend 100k on their credit card..."

Re: Airlines are charging solo passengers higher fares than groups

#420

Post by wapeoifjaweofji »

twoodfin wrote: post #306
stmw wrote: post #194

Here is why I think these kinds of dynamic pricing practices are bad: it may be perfectly fair and legal, but it forces a non-negligible number of humanity to waste time and/or energy to figure out if it's happening, how to work around it if it is, and just generally waste human potential on something that should be a simple commodity.

Why is anyone forced to reverse engineer the pricing scheme? Simply decide if the ticket is worth the money to you. You typically have other airlines to compare to, other fares on the same airline for different itineraries, and other modes of transit entirely. Just because some people won’t buy anything that isn’t on a coupon doesn’t mean coupons are bad.

Many basic financial assumptions regarding the free market are premised on the fact that you can figure out the lowest price a vendor is willing to charge for a good and compare that with how much you're willing to pay for it. Obfuscating this is bad for consumers.
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