Airlines are charging solo passengers higher fares than groups
thriftytraveler.comI feel like people are suspending their reasoning in order to maximally shit on airlines in this thread (because yes, they do have a history of predatory pricing practices).
The problem with this isn't the difference in prices - charging less for buying in bulk is a normal thing that's probably been done by merchants since the invention of money.
The problem with this is the lack of communication. There's no advertisement of a bulk/family discount at any point during the pricing process, you just see a different price. That's the problem here, not the price difference itself.
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.
My theory is that most same-day travel is for business, and businesses are far less price-sensitive than consumers and will just pay whatever.
I suspect this is what's going on here. Most solo travellers are for business, not consumers for holidays. The price difference here is huge – almost half – which is far beyond a bulk discount, we're talking about 1 person vs 2 people.
That's also why none of this is advertised: it's not a discount, but a "we think you can pay more, so we'll charge you more" type of thing.
Is that a good/bad/ethical/predatory thing? I don't know. Leaves kind of a bad taste for me though.
At times it has also been common for airlines to charge lower prices for round trip tickets that extend over a Saturday. The thinking being that business travelers usually return home on Thursday or Friday and they're less price sensitive so airlines could use that as a way to discriminate. Leisure travelers typically stayed through a weekend and received lower prices.
My anecdotal experience is that this sort of discount doesn't really exist any longer. At least it isn't obvious to me when I book for the most part. Saturday night stay discounts for flights used to be very pronounced.
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 producers "grab" some of that consumer surplus for themselves (as "price" is not a horizontal line anymore, but gets closer to the demand line).
So this is bad for consumers, good for producers. However, the producers can use the surplus to subsidize products for poorer consumers, so that a higher quantity of goods is sold.
Having said that, the airline market is very weird (oligopoly character, very perishable goods, ...)
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.
That’s not the way to look at it. The airline has a total cost hurdle for the flight to make sense. If they don’t cover that the flight doesn’t happen. So in a very real sense, your seatmate paying half what you are could be the difference between the flight going or not. As long as they are covering the direct costs of their flight (fuel, etc.) they are helping the flight take place at all. Since the assumption is the business travelers ‘really, really want that flight’ everyone benefits here.
It’s not so much “subsidizing” as maximizing revenue by charging as much as each individual consumer is willing to pay instead of a flat price. Albeit the outcome is very similar.
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!"
Everyone knows airline transport is a service, not a good.
> 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'll charge you more" type of thing.
A surcharge for X vs a discount for ~X is the same thing, it's just how it's presented.
Technically all of this is advertised, it's published in GDS. People just don't really want to read the fare rules because it's boring and a ton of reading.
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.
> "we think you can pay more, so we'll charge you more" type of thing. Is that a good/bad/ethical/predatory thing?
Econ101 says it’s a bad thing because of the deadweight loss occurring versus a single market price.
It also arrogates a lot of consumer surplus to the producer (the airline), which many would argue is bad from an ethical and inequality point of view.
The only real question here is why hasn't competition driven this 'discount' away? In a perfect market it shouldn't be possible for this to exist, right? I am not a fan of airlines because, among other reasons, it often appears that demand and competition aren't driving price.
> I am not a fan of airlines because, among other reasons, it often appears that demand and competition aren't driving price.
First off airlines are an extremely low margin business.
AA's net margin is 1.26%, Delta's net margin is 5.91%, United's net margin is 6.43%, Alaska's net margin is 2.86%. These aren't exactly blockbuster SaaS numbers.
Demand and competition absolutely drive price reductions - competitive routes have much lower revenue per available seat mile - and adjusted for inflation air travel is wildly cheaper than it used to be. Since 1995 the cumulative inflation-adjusted price of domestic air travel is down almost 37%. [1] Thanks to competition you can fly from SFO to NYC for $99, non-stop, next month. On the other hand SFO to GUM is $1662 ($1100 on a half round trip basis), because there's no competition.
Airlines with both a domestic and international route network tend to lose money on their domestic routes and make up for it on their flagship international routes, but even still, they make most of their money on frequent flier programs and credit card relationships.
St Louis Fed has a good write-up on the economics of air travel. [2]
[1] https://www.bts.gov/content/annual-us-domestic-average-itine...
[2] https://www.stlouisfed.org/publications/page-one-economics/2...
Net margin does not include executive compensation and other "flexible" expenses so it only measures how profitable the business is to shareholders, not how much cheaper it could be in a free market.
It doesn’t seem to be that widespread - mostly being confined to short one way trips. There is no evidence of it happening on international or return flights.
It feels more like a test of a strategy to fill middle seats.
> Is that a good/bad/ethical/predatory thing?
It is a natural result of our economic system. Economists call it "extracting consumer surplus," and there are several mechanisms companies employ to get the population to pay them the maximum amount of money. Airlines indeed use the information they have about you and the flight you're booking to guess the maximum amount you'll pay- and that's the price they show you.
Obviously we, as consumers, feel taken advantage of because we wish we could pay less (and keep the surplus to ourselves). But this is going to happen in any capitalist system.
> Is that a good/bad/ethical/predatory thing? I don't know. Leaves kind of a bad taste for me though.
It can be an equitable thing as families traveling usually have less income per head than individuals.
Some companies more or less do the same thing with their "enterprise" software.
All airline pricing is unadvertised and not communicated. They also sell through lots of independent agencies and channels.
It would be weird to specifically advertise this. Unlike say, buying a second pair of shoes - not many people will buy an extra plane ticket to save 30% off both.
The thing I find interesting about a lot of things like this is that they feel like a holdover of half the era where negotiating prices was normal: today, for most people in the US, most shopping is just a matter of going somewhere and paying a set price and you don’t argue with the seller to get a better one. B2B transactions still usually involve a negotiation, I think, but it’s basically gone for consumers.
With something like airfares, the business is still doing its half of negotiations: collecting bits of data about the buyer to determine a price; but, crucially, there’s no real way for the buyer to “talk back” and so the process seems arbitrary.
>The thing I find interesting about a lot of things like this is that they feel like a holdover of half the era where negotiating prices was normal: today, for most people in the US, most shopping is just a matter of going somewhere and paying a set price and you don’t argue with the seller to get a better one. B2B transactions still usually involve a negotiation, I think, but it’s basically gone for consumers.
Not really. The "negotiation" is still there. Time limited discounts weed out consumers who need something immediately. Coupons weed out people who aren't willing to put the legwork to find them. Loyalty programs and app-based offers (eg. McDonalds) take all of this to the next level by sending targeted coupons based on whatever demographic/behavioral information they can glean from you.
Yeah, but it's not routine. I don't go into Walmart and quibble unlike some Middle Eastern bazaar. I probably do some negotiation at the car dealer (which, incidentally, many people on this board probably hate or with a job offer--ditto). And coupon stuff is mostly pretty low dollar; the grocery store flyers I get go in the trash.
>but it's not routine
Retailers often have weekly sales. If that's not "routine" what is? Is it only "negotiation" if it's happening on a per customer basis? Moreover apps with targeted offers is literally doing that. The company is assessing a given customer's willingness to pay, possibly on a daily basis, and sending offers/coupons in response.
It's price discrimination in that different people have different tolerances for spending time and energy on hunting for deals. I'm sure not lining up at 6am for Black Friday sales though I may take advantage of a President's Day sale if I need some large electronics anyway. It's not really negotiation as the term is normally used. The process is pretty different.
>It's price discrimination in that different people have different tolerances for spending time and energy on hunting for deals.
I never argued it's not price discrimination. In fact I was arguing the opposite, that price discrimination is the same as "negotiation", and it's alive and well in modern times. It might not be "negotiation" in the sense there's two parties going back and forth, but the end goal of negotiation is price discrimination. If coupons and apps do the same thing, does the fact that you're not talking to a salesman really matter?
It is completely different psychologically when you’re not determining the price at a personal level in the context of a single transaction.
> not many people will buy an extra plane ticket to save 30% off both.
That was kind of the premise of a movie I watched last night where a couples retreat offered a group discount for 4 couples or something.
So I could see it being "Bring your friends for 30% off!" being a cool summer promotion to beach destinations or something.
No, but some people might move their flight a day or so if they can save 30% by booking together with someone else.
As I understand it, prices are generated by algorithms on the spot, and may change any number of times during a day.
You can't advertise prices that constantly change.
Airline ticket prices have been highly individualized for at least a decade. I live a nomadic lifestyle and I'm often traveling with friends from various countries. We can sit next to each other in the same café and search for the same plane tickets on the same website at the same time, and get entirely different price offers. This is one of the reasons that I never buy plane tickets without using incognito mode or some sort of private browsing, but even doing that affects the price that you're offered.
I've also heard that depending on what country you're buying from the price changes, but using VPN I've never been able to replicate the results. Pricing based on individuals sounds illegal.
It's definitely the case that a round trip going from A to B to A can have a very different price than a round trip going from B to A to B using the same routes.
> Pricing based on individuals sounds illegal.
It happens in every car dealership. And in enterprise sales. And in some countries in nearly every market and store.
This is the wrong comparison though. Merchants offer bulk discount to incentivize customers to buy more units of whatever they’re selling. I can’t buy more than one seat on the plane of its just me traveling. I can’t utilize the ‘bulk discount’ if I’m not traveling with anyone
Group discounts are pretty common for all kinds of services, they are pretty comparable to bulk discounts for goods. You might not use two seats on your own but you might bring along a friend.
The shadiness and manipulation, and extraction at every step, while monetizing or cutting every possible part of the experience and aggressively underpaying every employee.
This list of practices may sound like “shitting” on the companies but is just that - a list of their normalized practices.
It's intentional and working as designed.
The same way they have been observed to offer higher prices to iPhone users at times
They come up with schemes to rake in money based on market segmentation they run numbers on and have their booking systems setup in a way to make price comparison "difficult" for a normal user.
Are these discounts compared to prices before the change or did they raise the price for individual travelers?
Are grocery store discounts for six packs compared to prices before the change or did they raise the price of single items?
Here they don't even advertise it as a discount, so there's no ethical problem with raising the individual traveler price by x and lowering the family price by y so that the total profit remains the same.
There is absolutely an ethical problem with charging people different prices for the same exact product/service
> There is absolutely an ethical problem with charging people different prices for the same exact product/service
One, there isn’t. One party undercutting another for the same product is how competition generates consumer surplus.
Two, it isn’t the same product. When I fly with my family, we check in together. We board together. I collect their docs on my phone and double check they have them on theirs. I turn down upgrades so I can sit with them. If there is a change, it takes one customer service agent maybe 10% longer to adjust everyone in bulk. I’m not incurring 4 or 5x the cost on the airline for 4 to 5x the revenue, this is why bulk discounting exists for everything.
This isn’t an ethical problem. If it’s triggering an ethical system, that’s more damning for the system than for Delta. This is a communication and brand problem.
Mm, it feels unfair. I was trying to reason through why I think it's an ethical problem and that's what I've come up with. You're not treating people equally - whether it's in person bartering where you make assumptions about them based on snap judgements or via airlines seen here.
There's an even bigger fairness issue when there's such a huge data knowledge gap between the parties, both knowing that there is this hidden price structure as well as knowing a ton about you. So there's privacy implications too.
Edit: it's not undercutting. It's price discrimination. You know the thing people fucking hate when trying to buy a car. Half the reason people liked buying Tesla is cause the price is the price is the price.
I think this is a framing issue.
Is it fair to charge people with different sized families different prices (per unit) for toilet paper?
vs.
Is it fair to charge people different prices (per unit) for different sized packages of toilet paper?
The former makes it seem nefarious but the latter is commonly accepted as fair. Same for airline tickets - if there's a discount for buying in bulk that's just as fair as a discount for buying toilet paper in bulk.
> It's price discrimination. You know the thing people fucking hate when trying to buy a car
Transparent pricing worked as a positive differentiator for cars. (Saturn. Tesla.)
I believe airlines have tried their hand at it. But it doesn’t budge the needle. If there is a single enduring truth to at least American airline demand, it’s that most consumers will pick the cheapest ticket. Almost nothing else matters, when it comes time to pay for it, to almost all of the flying public.
> If there is a single enduring truth to at least American airline demand, it’s that most consumers will pick the cheapest ticket. Almost nothing else matters, when it comes time to pay for it, to almost all of the flying public.
Perhaps that's because all the U.S. airlines have engaged in such a race to the bottom on quality that there's no other distinguishing factor. I'd happily pay more for a more pleasant experience, but no one offers it.
They do. But it's a big premium. Which I might pay for especially long haul international but I probably won't for a domestic flight.
> it's a big premium. Which I might pay for especially long haul international but I probably won't for a domestic flight
Sure. That’s the point. So the market rewards the carriers who can cut prices lowest.
What I would be curious about here is whether this single/double discrimination extends to Delta’s loyal customers. (My hunch is no.)
> Perhaps that's because all the U.S. airlines have engaged in such a race to the bottom on quality
Nope. The rule is proven by the exception. When carriers and new entrants have tried to disprove it, it’s generally proved true.
> I'd happily pay more for a more pleasant experience, but no one offers it
Between premium seats and private charter it absolutely exists. Most people can’t or won’t pay it, however, because it’s not worth that much to them.
That's because premium seats are ridiculously priced compared to the advantage they offer and compared to the cost to the airline. If you could purchase e.g. 10% additional seat pitch for 10% extra (and even that would be unfair without an additional 10% baggage allowance and so on) then you might have an argument.
There hardly is such thing as "discounts" in airline pricing. I mean, formally, there is, there's a lot of them, but, well, it's complicated…
In all honesty all this thread is people complaining about something they don't have a clue about. Airline pricing is insanely complicated, and this is for a reason. Airlines are not a luxury business, they barely manage to survive. If not all this dynamic pricing, special contracts with agencies, etc, they'd have to charge so much for a seat that you wouldn't pay and all this travel industry you are accustomed to simply wouldn't exist. The whole business is built on making somebody who crucially needs to fly pay as much, as he can, and then to make price attractive enough for the rest of us so that you can sell the rest of the tickets, so that flight can make any profit. And in the end, margins are super thin in this business.
Also, your question implies that you imagine that there is some simple enough "true price for a seat", which is so far from the truth, you have no idea. If you actually look at the price breakdown for a given ticket, there are literally dozens of components in it. It's not unusual that so called "fare" of a ticket (which is, like, "just price") may be literally $1, and the rest of $300 is various taxes, surcharges and payoffs I won't even try to start to explain here.
I mean, really, people here truly have no idea what they are complaining about. Airline pricing is not a thing you should hate.
>> In all honesty all this thread is people complaining about something they don't have a clue about.
Considering that I saw the same uproar on 4 major travel blogs: Thrifty Traveller (who originally reported this), One Mile at a time, Enilria and View from the Wing.
I'd hardly call it people complaining about something they don't have a clue about.
This pricing practice of charging more for solo travellers is new, deceptive and even travel bloggers who are thought leaders are upset by this.
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.
Same with points systems. Why am I forced to understand your made up currency and status system to get the full value of my money.
There might be some benefits to price discrimination (which is in effect what a point systems achieves) but the collective time wasted dicking around with points isn’t worth it. Make all point systems illegal.
To get full value of your money takes time and information in every market. It’s not unique to this space.
If you want to buy anything and just pick the first option then you probably will have worse results than someone that did research. Or someone that used coupons. Or someone that waited for a sale. Or someone that bought used. Etc etc
We obviously shouldn’t make all those behaviors illegal. There is an inherent time/money trade off in life. It’s actually the whole basis for economic activity (ie it’s why employers are able to pay you to do stuff for them) so stopping it would probably be quite bad.
In general markets are pretty good at arbitrage. If you can get a $50 discount for a product by doing X, someone is going to set up a service whereby they do X for you, resell the product for a $45 discount and put $5 in their own pocket. At which point nobody would pay full price to the original seller and the convenience fee for not doing it yourself is $5 instead of $50.
The problem comes when the original seller doesn't want their price discrimination scheme to be thwarted by efficiency-improving arbitrageurs and takes measures to prevent that, because that's rent-seeking behavior and shouldn't be tolerated.
Being the status quo doesn't change that it's an inefficient waste of resources. That's still true.
The airline wastes resources on their end, and so do the consumers. They're both doing what they're incentivized to do, but that's not what's actually efficient for society. The whole point of a good economy is that these two are always pulled into alignment (Efficient Market Hypothesis), but ours has failed in this case.
It was fascinating to chat with the software engineers at ITA Software.[0] Turns out flight routing (which everyone knows "should be" just a simple A*) is actually NP-Hard because of how convoluted the airline pricing systems are. At that company it was obviously a group of super smart people solving super hard problems..... and for what?
This is Kurt Vonnegut Jr's "Dynamic tension": muscles working against muscles, with no work being done. This is what Bullshit Jobs (good title, disappointing book) should have been written about.
To quote Eisenhower, this (lesser) scourge also
Maybe an outright ban isn't the best intervention (and maybe it is), but I'm certain denial of the underlying problem will yield us zero progress.signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.[0] https://news.ycombinator.com/item?id=29425650 or https://en.wikipedia.org/wiki/ITA_Software
They also have the poorest who have cheap credit cards subsidize the richest who have the best cards and receive most of the rewards. The inequality is baked into the system.
Which is adjacent to: Nearly everyone loses, because the house knows the odds and controls the terms and conditions of the rewards.
> 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
Right. This isn't about interchange fees. But you're right I wasn't clear. It's the points/rewards/miles systems that are.
You talked about "the poorest who have cheap credit cards subsidize the richest who have the best cards". The point of the thread I cited is that in general credit cards make money from both poor and rich people alike, and make more money from rich people, and neither one is subsidizing the other in any framing of it. It doesn't matter whether you're talking points, miles, or any other form of rewards; there's no degree to which credit card reward programs have anyone subsidizing anyone else.
It’s not false. Patrick disagrees with it. The atlantic doesn’t. The general consensus is with the Atlantic, but it’s not a clear cut subject.
You are interpreting "demonstrates to be false by citing sources and providing evidence" with "disagrees with". The thread I linked to is an instance of the former, not the latter. See the citations and graphs from that thread, showing the data that credit card companies make much more money from wealthy people than they do from poor people, and neither one is subsidizing the other.
If you're going to claim "the general consensus", [citation needed]. A more likely claim is "more people have read the misinformation from the Atlantic than have read the correct refutation from a domain expert on credit cards", which is sadly probably true.
I don’t know why you’d trust the guy that works for a credit card processor telling you that credit cards are fair, actually.
And Twitter doesn’t show threads unless you’re logged in btw, so you just linked Patrick’s opinion.
This is not an argument from authority (though I would in fact give some credence to a domain expert with a demonstrated reputation for diligence and accuracy, here). This is an argument backed by evidence refuting an article not supported by evidence.
(Also, the argument is not "credit cards are fair". The argument is "credit card reward programs are not a subsidy of the rich by the poor".)
> And Twitter doesn’t show threads unless you’re logged in btw, so you just linked Patrick’s opinion.
Fair point, thank you.
Some highlights of the thread, assuming that each directly linked tweet can be loaded:
Citation for people with more money spending more: https://x.com/patio11/status/1902556736956903589 (linking to https://www.bls.gov/cex/tables.htm ).
The rich are paying far more of the "payment system overhead" of merchants than the poor are: https://x.com/patio11/status/1902556925826416841 and https://x.com/patio11/status/1902557078222176449 and https://x.com/patio11/status/1902557151807119735 and https://x.com/patio11/status/1902557413275775295
Identifying the key question: https://x.com/patio11/status/1902557654603415768 and https://x.com/patio11/status/1902557795800498477
Quoting and questioning the Atlantic's claim that rewards programs aren't funded by interchange: https://x.com/patio11/status/1902558008283992313 and https://x.com/patio11/status/1902558055310434325
Citation refuting this: https://x.com/patio11/status/1902558157169152158
Quoting relevant charts and data from the citation: https://x.com/patio11/status/1902558268070711311 and https://x.com/patio11/status/1902558360530002094
Claim (not specifically citation-backed) that in fact one group getting a subsidy is lower-income consumers during macroeconomic shocks: https://x.com/patio11/status/1902559088631771397 and https://x.com/patio11/status/1902559166729802088
Observation that while wealthier people get higher-reward cards supported by interchange, poorer people get free checking supported by interchange: https://x.com/patio11/status/1902559216214134798 and https://x.com/patio11/status/1902559349655982387 and https://x.com/patio11/status/1902559372758155325 and https://x.com/patio11/status/1902559469470412913
Refutation of another part of the Atlantic article (article claims credit-card companies "make lucrative deals with airlines and hotel chains", but credit card companies pay for those deals, not the other way around): https://x.com/patio11/status/1902559896400203987 and https://x.com/patio11/status/1902560051644002726 and https://x.com/patio11/status/1902560160632963217 and https://x.com/patio11/status/1902560257282335024 and https://x.com/patio11/status/1902560386395545603 .
Thanks for the detailed comment!
Patrick’s argument is flawed because it assumes that if the interchange fee pays more than the cost of providing benefits, then it’s not a “subsidy”.
This is false because the interchange fees, and in fact all of the fees, have to pay for the entire company’s operations, not just for your points program. Without more detailed data it’s not possible to rule out the possibility that points programs are a subsidy for the rich.
The second assumption he makes is that volume is the same across the board. It’s not, there’s way more customers on the lower end, and the company charges them even more fees. So sure, rich customers individually pay more interchange fees, but the company could still be making most of its money from poor customers.
Unfortunately without knowing the CC company internals we have no way of knowing. Which means that Patrick’s opinion while being an educated guess is still just a guess, so it doesn’t refute anything.
> This is false because the interchange fees, and in fact all of the fees, have to pay for the entire company’s operations, not just for your points program.
Sure. But the default and reasonable presumption is that at that scale, companies do things because they're profitable; in this case, they implement rewards programs because they make more money by doing so. In particular, the default and reasonable presumption is that companies don't spend more money acquiring a class of customers than they expect to make from those customers. The claim by the Atlantic article is that credit card companies lose money on the rewards programs for rich people. There's no evidence of that, and some evidence to the contrary.
> Without more detailed data it’s not possible to rule out the possibility that points programs are a subsidy for the rich.
That's not where the burden of proof lies. Without more detailed data it's not possible to demonstrate that rewards programs are a subsidy. The conclusion is not presumptively valid.
I'm not suggesting, either, that the argument from the linked Twitter thread is ironclad, just that it's compelling evidence against.
> The second assumption he makes is that volume is the same across the board. It’s not, there’s way more customers on the lower end, and the company charges them even more fees. So sure, rich customers individually pay more interchange fees, but the company could still be making most of its money from poor customers.
"more customers on the lower end" is in fact refuted by the data; see figure 2 (F) in the linked paper.
"making most of its money from poor customers" might be true, but note that figure 2 (E) is scaled by "percentage of average daily balance", and if you were to view it in absolute terms, it seems less likely to be true. Even if it were true, though, it's not evidence of a subsidy of rich customers by poor customers. The credit card companies very obviously think that rich customers are profitable to acquire and keep, or they wouldn't pursue them so heavily. The evidence from the thread supports that claim.
The argument being made in the thread is, precisely, if the rewards program pays for itself an individual customer, that customer is not being subsidized in any way.
If you want to claim that the rewards programs offered to richer customers aren't in fact profitable for the credit card companies, that seems like an even more extraordinary claim, and not one that seems to have supporting evidence.
Alternatively, if you want to define "subsidy" so broadly that any business making more money from one group of customers than another is having one group of customers subsidize the other, even if they are making money from both, then I'd question your definitions and use of evocative terminology. They're spending money to get a group of customers, and if they're spending more to get those customers than they make from those customers, they wouldn't spend it in the first place; if they're spending less to get those customers than they make from those customers, then those customers are not being subsidized.
I don’t think that’s a reasonable assumption. Companies take losses on all the time.
Think about airline points programs. Strictly speaking the airline is losing money on it, but they judge that overall it’s worth doing.
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 people pay more in absolute terms, so they're not getting "subsidized". Maybe this is just word lawyering over what "subsidize" means, but most people would characterize this arrangement as at least "unfair", even though rich people are paying more in absolute terms.
He also points to some graphs about how from the point of the view of card issuers, the middle customers are actually the ones being subsidized, not the rich or the poor. That might be true, but is totally unrelated to the original original point, which is about what effective price (ie. price paid - cashback) consumers are getting at shops. Moreover, the fact that they're getting a subsidy from the card issuer doesn't preclude from them getting a subsidy from the store itself.
> 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.
>rich people spend more in total at the store so their interchange costs are more than made up for by actual spending
Suppose people making $1M+ are taxed at 20%, and everyone else is taxed at 25%. Ignoring the small segment of people making just under $1M, most people would at least characterize this as unfair. You could plausibly this isn't a "subsidy", because the $1M earners are paying more taxes in absolute terms. However it doesn't really refute the argument that the $1M earners are paying "less". Maybe "subsidy" is the wrong word for this, but it's pretty clear this is what detractors of credit card are pointing out.
> Suppose people making $1M+ are taxed at 20%, and everyone else is taxed at 25%.
That model is not analogous to the credit card situation, in multiple ways. Among other things, it's framing this as a "tax" (which isn't inherently the right model), and presupposing that the origin of the "tax" is the credit card interchange, and mapping the "rewards" programs to a discount on the "tax" but not mapping anything else (e.g. free checking or the availability of credit instruments that wouldn't otherwise be available) to that, with a lot of assumptions about which parts of the overall system to include and map, and which parts to leave out. The net result seems like a cherry-picked conclusion to fit an agenda. If you decide in advance what you want the model to show, you can make a model to show it, but that doesn't mean that model is an accurate representation of the system.
When I said "rich people spend more in total at the store so their interchange costs are more than made up for by actual spending", I mean that on balance, they are not "costing" the merchant more, they are giving the merchant more money.
Card companies/issuers charge interchange so that the credit card company makes money; they don't do it with the primary goal of funding rewards programs, or free checking, or the other things they do for marketing purposes. That would be like saying "the primary reason this company charges for their product is to spend money on marketing programs". Credit card companies didn't pick their interchange rates on the basis of funding reward programs, specifically; they set their rates to make money for themselves.
Also, to the best of my knowledge, current law no longer allows credit card companies to prohibit merchants from charging a premium for using credit cards, or for using specific credit cards. (Credit card companies used to do this, which effectively made them a cartel engaging in price-fixing.) e.g. there is nothing preventing merchants from charging less to people with cards that cost less to accept, such as debit cards or less "premium" credit cards. In theory, doing so might create competition for cards with lower interchange, or incentives for people to stop using rewards cards. In practice, however, merchants don't do this. Given that, you could just as easily portray this as a model where merchants are choosing to value the custom of higher-income people (e.g. because they spend more) over the custom of lower-income people. I don't think that's an accurate model either, though.
I think it is reasonable to observe that credit card companies have way way way too much power to set prices for merchants, and treat that as a problem worth solving. I don't think pitting low-income and high-income people against each other is a productive way to solve that. The point of my previous comment, and of the thread I linked, was that neither low-income nor high-income people are on net "making money" from the existence of interchange or from any form of rewards programs. Credit cards make money from both low-income and high-income people alike, and make more money from high-income people, and neither one is subsidizing the other.
(Also, I'm very rapidly reaching my limit for how much energy it's worth investing into a conversation. Frankly, at this point I think anyone interested in the evidence or the accuracy of any particular model has that information available, and anyone interested in pre-deciding a conclusion without caring about the evidence has had that option the whole time, and I don't see much value in continuing. There doesn't seem to be disagreement here on the point that credit card interchange is too high, and that's not a good thing. There's disagreement on whether it's either accurate or useful to frame that as a subsidy from poor people to rich people. By "accurate" I mean "is it actually an accurate model of how the system works, for the purposes of understanding and changing the system", and by "useful" I mean "does that model actually help effect change, rather than just provoking outrage". I don't particularly think the framing as a "subsidy" serves either of those purposes.)
>That model is not analogous to the credit card situation, in multiple ways. Among other things, it's framing this as a "tax" (which isn't inherently the right model), and presupposing that the origin of the "tax" is the credit card interchange, and mapping the "rewards" programs to a discount on the "tax" but not mapping anything else (e.g. free checking or the availability of credit instruments that wouldn't otherwise be available) to that, with a lot of assumptions about which parts of the overall system to include and map, and which parts to leave out. The net result seems like a cherry-picked conclusion to fit an agenda. If you decide in advance what you want the model to show, you can make a model to show it, but that doesn't mean that model is an accurate representation of the system.
That's a lot of words, but I don't see how it refutes the core point which is that "rich" cardholders pay 1% (or whatever) less on their spend than someone paying with debit or cash. All you did is handwave a bit about how interchange fees aren't really like a tax, and how the logic is "cherry-picked".
>Card companies/issuers charge interchange so that the credit card company makes money; they don't do it with the primary goal of funding rewards programs, or free checking, or the other things they do for marketing purposes. That would be like saying "the primary reason this company charges for their product is to spend money on marketing programs". Credit card companies didn't pick their interchange rates on the basis of funding reward programs, specifically; they set their rates to make money for themselves.
Again, this is a lot of words but I don't see how this refutes the claim that rich cardholders get 1% back but poorer people paying with debit/cash do not. Moreover, if you're sufficiently cynical, you can claim that the government levies taxes so they "make money", not "with the primary goal" of funding schools and roads.
>Also, to the best of my knowledge, current law no longer allows credit card companies to prohibit merchants from charging a premium for using credit cards, or for using specific credit cards. (Credit card companies used to do this, which effectively made them a cartel engaging in price-fixing.) e.g. there is nothing preventing merchants from charging less to people with cards that cost less to accept, such as debit cards or less "premium" credit cards. In theory, doing so might create competition for cards with lower interchange, or incentives for people to stop using rewards cards. In practice, however, merchants don't do this. Given that, you could just as easily portray this as a model where merchants are choosing to value the custom of higher-income people (e.g. because they spend more) over the custom of lower-income people. I don't think that's an accurate model either, though.
The fact that merchants are freely choosing to give rich cardholders subsidies doesn't diminish the fact that rich cardholders are being subsidized. It might be better than some imaginary system where they're forced to subsidize rich cardholders, but detractors of cashback/rewards programs oppose such programs existing at all.
>Credit cards make money from both low-income and high-income people alike, and make more money from high-income people, and neither one is subsidizing the other.
You're committing the same mistake that you allege me doing above (ie. "If you decide in advance what you want the model to show, you can make a model to show it, but that doesn't mean that model is an accurate representation of the system."). In particular, you're restricting yourself to only analyzing the revenue/expenses from the card issuer's perspective, and not analyzing how much the customer ends up paying. It's possible simultaneously for a card issuer to be making money off of rich people, and for poor people to be screwed over by the interchange fee system. An overly simple model that demonstrates this would be a population divided into "rich" and "poor", where "rich" people use credit cards with 1% cashback and 2% interchange, and "poor" people use credit cards with 0% cashback and 0.1% interchange. In this model, from the perspective of the bank, they're clearly making more money off "rich" people in both absolute and relative terms (2% - 1% cashback = 1% profit, compared to 0.1% interchange for "poor" people). However the rich would still be paying a lower effective price for whatever they're buying at the stores.
Of course, this analysis leaves out a bunch of details, but neither Patrick's thread nor your comment tries to refute why the model above is wrong, why we shouldn't use "effective price" (ie. price paid - cashback) as the thing to analyze, or we why we should focus on some other metric (eg. card issuer profit) instead. All he did was point out some other metric and say "but these metrics say they're making money off rich people as well, so you're wrong!", without trying to refute the original claim. It's like arguing with a "replace income tax with tariffs" proponent, and having him respond to your claim that tariffs are regressive with "yeah but rich people still pay more in absolute terms so it's not regressive!".
Leaving aside other inaccuracies in the model, and leaving aside insulting non-responses like "that's a lot of words" that inherently penalize analyses of a complex system and favor oversimplified models even when incorrect...
The cherry-picking in question, here, is that you are choosing a model that claims the rewards being paid to richer people are a subsidy of the rich by the poor, by attributing one input to one output, while ignoring everything else in the system. Think about double-entry accounting for a moment: would it be reasonable to point to one inflow and one outflow and say "this inflow paid for that outflow!" as a serious model, without looking at anything else in the system? And in particular, would it be reasonable to claim that as the "core point" and demand that people refute that point while ignoring any evidence invalidating the oversimplified "one inflow, one outflow" model that privileges that point and treats it as the core point?
To draw an analogous argument, which is faulty for the same reason the credit card rewards "subsidy" argument is faulty: if a store offers a "bulk discount", is that a subsidy from poor people (who may not be able to afford to buy or store in bulk) to rich people (who on average can do so more easily)? Using the same modeling you're describing would paint it as such: poor people pay more for the same goods. I would argue that it's more accurately modeled as an incentive offered by the store that they see as on net bringing in more revenue? Do you expect that the store, upon receiving that higher revenue, needs to use it to somehow lower the prices paid by poorer people to compensate? And if they do not use it as such, and instead pocket that additional revenue or use it in some other way, does that suddenly make this a subsidy from poor customers to rich customers?
I am, in general, in favor of the argument of analyzing a system's net effect and not just its intentions. But it's faulty to analyze a subset of the system and then attribute fault or foment outrage based on that simplified model of the system.
If you want to argue that the entire system is not the perfect system, or that it could be improved, you'll get no argument from me. If you want to argue that, in general, "having money is a massive advantage for getting more money", again, that's entirely true right now.
If you want to argue that you've shown a specific subsidy of the rich by the poor, I think you haven't given evidence to support the validity of that model. And in particular (and to my mind the more important aspect of that argument insofar as the point of arguing about systems is to evaluate potential changes to them), if you want to argue that in a different system with no interchange, poor people would pay less for the same goods than they do in this system, I think you'd need more of a model of the overall system to successfully argue that. In particular, among other things, 1) would merchants actually make more in that alternate system rather than making less (which the observation that merchants make more money from higher-income customers calls into question), and 2) would merchants actually pass that savings on, specifically, to lower-income customers, which the observation that they don't currently charge different prices for different customers calls into question, and 3) would some other part of that system change as a result that makes things worse in other ways, such as products like cards or checking accounts (a checking account is a credit instrument) no longer being available to people with lower income or lower credit scores?
I'm not making this argument because I think the financial system is perfect and shouldn't be changed, or that the financial system overall is fair. I'm making this argument because the oversimplified model that foments outrage by claiming a subsidy of the rich by the poor is a bad model for the purposes of reasoning about the system and attempting to make it better. Criticizing that model and arguments based on that model isn't based on wanting to preserve or advocate for the status quo, it's based on wanting to accurately model the world as a step towards evaluating potential improvements.
What are your thoughts on trickle down economics, then? Everything you said above seems suspiciously similar to the reasoning use by advocates of lower taxes to "grow the pie". After all, it's not like billionaires use that much roads, schools, and defense compared to the typical American, definitely not as much in relation to how much more income/wealth they have. Maybe we should give them a "bulk discount" on taxes, in the hopes that it increases the tax take overall? You said something earlier about how taxes totally can't be compared to interchange rates, but your exact reasoning is unclear.
Is this just word lawyering over what "subsidize" means? I can understand how strictly speaking, rich people getting more cashback (or lower taxes) isn't exactly a "subsidy", because they're still paying more than "their share" into the system, but most people would still think the arrangement is unfair. Call it "regressive" or whatever, but I still think it's a valid complaint.
Every argument I made in this thread was about private companies, who have every incentive to only take customers who make them money; that's especially true if they're spending marketing money attempting to pursue such customers. I am making no claim or argument about government spending, which has fundamentally different strategies and goals.
> Is this just word lawyering over what "subsidize" means?
Insofar as words have meaning, possibly. Before arguing that one group is subsidizing another, you'd first have to argue that one group is being subsidized. Leaving aside the original meanings (which only describe public funds in the first place, which this isn't), and interpreting the apparent meaning, the claim is apparently that credit cards lose money on rewards programs for rich customers, and those programs are thus subsidized, and specifically that they're subsidized by poor customers. If that were the case, they wouldn't have those rewards programs. (I'm not claiming that no company in the world has ever spent marketing money they didn't have to or spent it unwisely; I am claiming that an absurd amount of analysis has gone into the finances of rewards programs, in particular, and it is extremely unlikely that card companies are spending more to acquire a class of customers than the revenue they get from that class of customers.)
Now, more broadly, if you want to claim that credit card companies make more money from poor customers than rich customers, that would not be too surprising of a claim. (It's not obvious if the evidence supports that, and it seems like it may not be the case, but let's set that aside for a moment.) That's not a subsidy, and I wouldn't even call it "regressive", any more than I'd call a company that makes more money from rich people than poor people "progressive".
If you want to say that, in general, the practices of credit card companies and the financial industry are not fair to lower-income people, I would agree with you there. I don't think any subsidizing is going on, and I don't think rewards programs are a redistribution program; any such claim would imply taking a loss on a class of customers but keeping those customers anyway. But I absolutely would support a claim that (for instance) credit cards are predatory. Or, for instance, that airline miles programs are deliberately confusing and misleading and to a first approximation no customer "makes money" on those either.
>Every argument I made in this thread was about private companies, who have every incentive to only take customers who make them money; that's especially true if they're spending marketing money attempting to pursue such customers. I am making no claim or argument about government spending, which has fundamentally different strategies and goals.
A government might have different goals than a profit making corporation, but when it comes to revenue generation much of the principles are similar. The demand curve vs the laffer curve, or the idea of giving discounts in the hopes of increasing absolute profit (or in the case of governments, tax revenue less any government services/transfers). Therefore I'm not really sure why you can't compare rich people getting cashbacks to rich people getting tax breaks.
>Insofar as words have meaning, possibly. Before arguing that one group is subsidizing another, you'd first have to argue that one group is being subsidized. Leaving aside the original meanings (which only describe public funds in the first place, which this isn't), and interpreting the apparent meaning, the claim is apparently that credit cards lose money on rewards programs for rich customers, and those programs are thus subsidized, and specifically that they're subsidized by poor customers. If that were the case, they wouldn't have those rewards programs. (I'm not claiming that no company in the world has ever spent marketing money they didn't have to or spent it unwisely; I am claiming that an absurd amount of analysis has gone into the finances of rewards programs, in particular, and it is extremely unlikely that card companies are spending more to acquire a class of customers than the revenue they get from that class of customers.)
I'm not sure how you got the impression that the argument was ever "credit cards lose money on rewards programs for rich customers". The linked atlantic article specifically says that it's not the case:
Moreover the article is pretty specific on what they're against:“When you talk to rich people who pay off their balance, they think that credit-card companies are losing money on them, and they’re the ones subsidizing the people who carry a balance,” Klein explained. “It’s the exact opposite.”
In other words, they're not claiming that card companies/stores are losing money to "fancy cardholders", or that they're even making less money from them. They're decrying the fact that everyone pays the same markup on interchange, but only the rich get "juicy perks and cash returned to them". You might quibble on the use of the word "subsidize", but the article is pretty clear on what's happening, and it's unfair to dismiss it with a "this is false".In 2023, these swipe fees amounted to more than $224 billion, driving up retail prices by $1,700 a year for the average family. Everybody pays more for their goods; only fancy cardholders get juicy perks and cash returned to them.>I don't think rewards programs are a redistribution program; any such claim would imply taking a loss on a class of customers but keeping those customers anyway
Defining "redistribution" is non-trivial, especially for businesses with high fixed costs and low marginal costs. For instance, suppose we define "redistribution" to only mean when a customer brings in less revenue than his marginal costs. That sounds reasonable, but it leads to some absurd conclusions. The most extreme example of this would be F2P games, where the vast majority of income comes from a tiny segment of the player base, "whales". The rest either spend trivial amounts or nothing at all. Given the economics of online games (high fixed costs to develop, low marginal costs per player), using the strict definition of "redistribution" above would imply the whales are not subsidizing all the other players. But this description doesn't feel correct, or at least doesn't tell the whole story. If all the whales evaporated there's no way the game would stay afloat, so it's reasonable to argue that in some sense, the whales are paying for everyone else, even if no "subsidy" (in the strictest sense) is going on.
The richest pay for the best cards and presumably buy enough appropriate goods to make the best cards worthwhile.
The entire point behind reward cards, is to track every purchase you make. They're the original evil tracking device, so the airline makes money with those points.
They do it by selling data, by points expiring, and by often only allowing points when seats would be empty otherwise.
And often retailers pay more at POS terminals!
This all ties into any rewards program. It's part of the package, even if points are granted for use.
> And often retailers pay more at POS terminals!
This is really the whole point. The sale of data is much less lucrative than the purchases by the customers themselves, especially for the "nicer" cards.
If you are a CC company with wealthy clientele, they tend to spend more. This means that retailers are willing to offer deals/rewards to attract those clients, and also that you want to offer rewards to keep those clients.
This is why e.g. American Express has cards with great rewards, high annual card fees to keep the riffraff away, and retailers willing to take a larger % cut in order to have those cardholders shop at their store where they presumably purchase more.
> This is why e.g. American Express has cards with great rewards, high annual card fees to keep the riffraff away, and retailers willing to take a larger % cut in order to have those cardholders shop at their store where they presumably purchase more.
At the high end it actually diminishes. Rewards cards targeting middle of the distribution are more lucrative, generally. Citi Double Cash gets you 2% cash back on purchases whereas the Amex Platinum gets you 1X on all spend worth at most 1.25% (and 5X on airfare).
For most purposes, a free 2% cash back card is probably optimum. I have another relatively low fee card for various reasons. If I still traveled enough to justify an airline club card (as I used to), I might have that.
I would say unless you find playing the miles and points game to be very enjoyable, which I do, you're better off with a cash-back card. For most people the Citi Double Cash at 2% is a great bet, if you have $100K in investments with them, you can get 2.625% back via Bank of America's Unlimited Cash Rewards card.
> high annual card fees to keep the riffraff away
It’s more a sunk cost/commitment thing. Their approvals department keeps away low and inconsistent spenders.
Not saying you're wrong exactly, but https://www.bitsaboutmoney.com/archive/anatomy-of-credit-car... does a good job of explaining the mechanics of rewards programs. It is more complicated/interesting than what you describe IMO.
Evil tracking is half of it, but the nominal "loyalty" benefit is there too. If I have a bunch of points with one company, I'm likely to accept a slightly worse deal from them relative to a competitor where I have none in the hope that I'll acquire enough for an award.
Non rewards credit cards also track purchases. It’s a revenue stream few companies are just going to leave sitting around.
> Why am I forced to understand your made up currency and status system to get the full value of my money.
You're not forced. This allows them to make extra money from people who don't bother, and offer discounts to price conscious people.
Time is money. Convenience too.
They make extra money from fools thinking they can beat the system, not from the people that avoid it.
If points systems caused losses then nobody would have them. They’re money makers, and that money is coming from someone’s pocket.
> If points systems caused losses then nobody would have them. They’re money makers, and that money is coming from someone’s pocket.
It sounds like you believe the losses are coming from the people who _have_ the points? That doesn't seem likely to me.
It would be a better analysis to say "it's complicated" -
* Business travelers earn personally-owned points on their company spending. In this case, the company might be paying higher prices but the individual is being incentivized to continue that because the miles are essentially a kickback.
* Personal travelers have an incentive to travel with the same airline for more points, so a kind of lock-in for either (1) those who are not as sensitive to price differences or: (2) those for whom the benefits of the points are high enough to outweigh some higher costs acquiring them.
* In the same vein, a points system that encourages a traveler to stay with the same airline can give _that airline_ greater profits from _that consumer_, even if on a per-flight basis the airline might hypothetically be making less. It's like Costco selling stuff for a cheaper unit price.
We could argue about the monetary value of points, but I don’t think we would get anywhere.
Instead I’d rather focus on human nature and induced behaviour.
When mcdonald's offers 2 burgers for the price of one, they make money because people who wouldn’t normally eat at mcdonald’s show up.
When airlines offer points, they make money because people who normally wouldn’t book flights end up booking them. Even if the points are a good deal, you end up spending more money than you normally would because you’re enticed by the points.
The incentive is right in the term loyalty points. Tending to stick with one airline, if you travel a lot, has all sorts of status and rewards incentives. Which you can augment with things like branded credit cards, etc.
Sure, if you value those things then by all means, but it’s strictly speaking a poor financial decision
For people who travel by air a lot, even things that make that travel even marginally more comfortable are worth it.
Not really. I fly a lot. Lounges are entirely superfluous. Business class is overkill when premium economy exists. Boarding early is silly, the plane takes off at the same time.
People just like feeling like they’re special, and they think points are a cheaper way of getting special treatment. In practice they’re not tough.
> Business travelers earn personally-owned points on their company spending. In this case, the company might be paying higher prices but the individual is being incentivized to continue that because the miles are essentially a kickback.
Yes and tax authorities should fix that loophole.
I think you missed the last bit of GP's sentence (even though you quoted it literally on your own):
> to get the full value of my money.
No one is forced to understand the system, but that means leaving some indeterminate amount of money/value in the hands of the predatory airline.
I didn't.
If you wanna save money, you figure it out. If you don't wanna figure it out, you leave money on the table.
They're selling (negative) convenience, but that's pretty much by design.
Selling negative convenience very succinctly describes the issue.
You already have to spend time researching airlines, buying tickets in advance, etc. but now in addition to that there is a completely contrived layer of bullshit I need to know about.
You can extend this concept even further and imagine literal series of hoops that you must jump through to earn “cash back” on your ticket at the end of the flight.
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.
The whole point of the free market is that you don't have to figure out what it actually costs to provide a good/service in order to determine a fair price because if a price isn't fair then someone else an provide the same good/service for cheaper and win all the customers. In practice of course there is no such thing as a free market but a buyer being able to figure the lowest price a vendor will accept was never part of it.
> Why is anyone forced to reverse engineer the pricing scheme?
Because you can save money by getting a cheaper flight by understanding how pricing works and adapting your purchasing strategy. Many consumer are willing to spend time and effort getting a better deal.
Again, not seeing the “forcing” in that choice of time and effort.
The thing you're being forced to do is to choose between paying the higher price without screwing around and screwing around in order to pay the lower price, because the option to pay the lower price without screwing around was taken away.
This can be true even if the lower price is nominally a discount. Before everybody would pay $100. Now you can pay $80 by screwing around but have to pay $150 otherwise, and the screwing around is $40 worth of inconvenience. $40 is less than the $70 difference between $80 and $150, but $80 plus a $40 inconvenience is a higher cost than the original $100 uniform price, and obviously so is $150.
Because lack of transparency in pricing affects competition.
Which is bad for consumers and the broader economy.
Especially when your industry is so "critical" that it has repeatedly received bailouts from the government.
Airfares were much more expensive when the government regulated them.
This is a half-truth. The flying experience was much different back then. As another commenter posted, airlines competed on amenities then, they compete on prices now. Look at the ads from that era; you see full roasted turkey being served and even an in-cabin piano bar! Your statement lacks nuance and is comparing apples and oranges to shoehorn in a “regulation is bad” narrative.
You get what you pay for.
In the US, government-regulated fares meant that fares were basically static on a given route. The only way to bring passengers to your airline was to serve places nobody else did, or to offer extras that slightly offset your profit in the hope that you'd get more, regular customers.
Since air travel was substantially more expensive then than now, the amenities gravitated to what attracted the most frequent fliers: businessmen. So stewardesses (they certainly weren't called flight attendants then) had weight limits, age limits, and if-you're-married-you-must-quit deals, and as a glance at some 1970s uniforms will show you, they were basically hiring models who happened to have the right skill set (usually at least one would be a trained nurse, and they all had to be reasonably confident) to dress them in revealing outfits. Like Hooters for travel.
If that's what you want, great. If you'd prefer other amenities... maybe not.
It has never struck me as coincidental that smoking was banned on US aircraft before no-smoking policies became nigh-universal at restaurants, but in just about the right timeframe for airplanes to shift from a boys' club to a place that catered to families.
If you want to pay more to get more, there are a lot of options, starting with coach plus (coach seats, business class legroom, priority boarding) and going through first class before branching out into niches like all-first-class flights (JSX is an airline in the US for which this is the business model; they fly smaller regional-size planes, and the reduced capacity legally allows them to skip the whole TSA and terminal experience and just let you on the plane if you show up and buy a ticket twenty minutes before departure) and then on into the various levels of chartered and truly private aviation.
You do, definitely, get what you pay for, but sometimes you don't need a Michelin-starred meal experience. And when that's the case, you've got cheaper options that didn't exist before deregulation (except for Southwest, which avoided problems by not making interstate flights at all in the early days.
A former co-worker who lived in Singapore at the time told me that that the deal with Singapore Airlines "flight attendants" was you got the job after college and then got married and left.
This would be better phrased as you don't get what you don't pay for - that's the only part that is guaranteed.
Not with price controls.
Are you referring to bailouts for airline operators or Boeing?
We can debate seat pitch I guess but economy seating hasn't been great for decades and something like United Polaris is better than Pan Am first class ever was even if food is arguably a downgrade.
Both
Boeing is, for better or worse, pretty critical to our military. I'm not sure why they'd consider any one airline company critical though.
Because most airlines have become monopolies at their respective hubs so their loss would severely inconvenience a ton of people so government is encouraged to prop them up.
For example, if Delta went under, Atlanta, Detroit and Salt Lake City would lose a total of 50%+ of their flights. That would be absolutely devastating.
Devastating to individuals sure. I hold a pretty high bar when it comes to something being truly critical enough for the government to bailout, economic concerns never meet that bar for me.
If we allowed markets to become monopolized we have to deal with that when the bill comes due rather than kick the can down the road.
If Delta went under another carrier would buy their planes and gate access at those airports, it might be chaotic for a short time but if there is enough demand to fly from point A to point B someone will provide the flights.
If Delta went under, one or more airlines would rapidly go "hey, there's a proven demand that's suddenly unmet", and there would very quickly be replacement flights.
Airline ticket prices are flat since 2000, which is down almost 50% after inflation. https://fred.stlouisfed.org/series/CUUR0000SETG01. So I say let them keep doing what they're doing.
Is that accounting for things like bag fees and “fuel surcharges” that used to be in the ticket price?
Fuel surcharges are generally accounted for as part of the fare on revenue tickets, they're a way of extracting additional revenue on award tickets. However, all the major US rewards programs don't charge fuel surcharges anymore. Air Canada gave up on it too. The only one of note is Alaska and American redemptions on British Airways.
On domestic tickets there's no YQ, YR or embedded Q surcharges anyways.
Domestic airfare in the US is down 36% adjusted for inflation since 1995. [1]
Even base tier status concentrated flying with any one carriers get you a waived checked bag, and so does pretty much any airline credit card. So basically you shouldn't pay more than $95 a year in checked baggage fees.
US airlines generally have sub-5% net margins which is why they find themselves in creditor protection every decade or so when the market turns. There's a long-running adage about investing in airlines.
[1] https://www.bts.gov/content/annual-us-domestic-average-itine...
Bag fees are fairly small compared to the ticket price and obviously don’t make up for a 50% decrease.
> Bag fees are fairly small compared to the ticket price…
$70 ($35 both ways) on a $300 flight isn't that small. And again, that's not the only fee.
See also: hotels adding "resort fees".
People who fly any amount don't pay for checked bags if they check anything at all.
People pay billions in bag fees alone every year. https://upgradedpoints.com/travel/airlines/us-airlines-highe...
It’s hardly the only fee, either.
Which doesn't contradict what I wrote. I daresay a lot of families who travel once a year at Christmas pay bag fees for their big bags. Lots of people who travel on a regular basis don't. And a lot of it seems to be on discount airlines. (Which I admittedly never fly.)
It actually literally contradicts what you said. People flying any amount (at christmas with their family) are paying bag fees.
US airlines recorded $5.1 billion in checked baggage fees according to your article. US airlines recorded a revenue of $275.3B in 2024. This accounts for 1.8% of revenue. A further billion was change fees.
Net profit was $6.7B meaning literally all of their net revenue (a total of 2.25% of gross revenue) was accounted for from these ancillary fees.
But their inflation-adjusted cost went down 36% since 1995.
There were a total of about 1 billion emplanements by US carriers in 2024, ish, so we're talking about a total of about $6 per passenger per year. They really are insignificant.
Excuse me. I should have said any significant amount. Those people flying every month or two mostly do take measures to have free baggage assuming they have checked baggage at all.
You can pretty easily get a good airline price by following a few best practices. If you are a person who wants the best deal, you grind for it.
It’s no different than clipping coupons or waiting till closing time to get pastries at a discount.
Also, just because something is legal, doesn’t make it ethical, moral or fair. It is just that, legal
And groceries are planning a similar strategy!!
Uh… It's not that you are wrong, but then you can also just abbreviate it to "capitalism is bad, because <…> it forces a non-negligible number of humanity [like all of it] to waste time and/or energy <…> and just generally waste human potential on something that should be a simple commodity"
I mean, yeah, sure. Capitalism is totally stupid and wasteful and evil. Any proposals? Oh wait, no, I'm afraid I don't really want to hear any proposals on this subject. I sincerely wish we don't have to live in interesting times. (Alas, I'm afraid it's past the point we could wish that anyway, so…)
Either the DOT or FTC should require that all airlines charge the same price for the same class of service on the same flight. Allowing this to continue is just a normalized, predatory, dishonest, unethical scam under the guise of "capitalism".
Flights are definitely not a "simple commodity"
Lol, downvotes.
One flight will get you to your sister's wedding on time. The other won't. They don't have equivalent value, they can't be freely exchanged.
I think this is fair play, they can charge how they want (within reason) and it’s not too different than other bulk discounts.
But someone should totally make a site for finding strangers to book the same flight with :)
I personally think it's fair if they charge by weight. The post office does it, why not airlines?
Unsurprisingly airlines imposing a fat tax is not an optimal marketing strategy.
As someone who's not overweight I don't think I would care. What I really wish they'd charge for is overhead luggage. I wish they'd charge so much that no one bothers with it.
Is there any reason or are you just generally a sadist?
Overhead luggage is the only place you can take anything fragile. You have no control over how your checked baggage is handled and anything you have to take with you into the cramped seating space will get squished.
One reason that I would value is that it would speed up boarding and deplaning. As you correctly point out, the prevailing overhead luggage system provides a benefit to some travelers, potentially to the detriment of others. It's a tradeoff.
I seriously doubt it would make much difference for deplaning - people already stand in the isle with their luggage out of the compartment long before the doors open.
For boarding it might speed things up but often boarding is done before all checked luggage is loaded so it will probably not let you take off faster either.
I agree that it wouldn't cause the doors to open any sooner for deplaning, but once they did, people could just ... leave. The people standing in the aisle with their luggage out of the compartment are the ones who started in the aisle seats. People in the other seats need to get out, reach up, pull down, get organized. Sometimes they have to salmon their way back from their actual seat to the compartment several rows behind them because that's where they had to stow their carry-on because the people seated in row 30 put their bag over row 16 when they boarded[1].
Similarly, for takeoff I agree that it wouldn't necessarily save time, net. But it would help with the frustration of standing in line, backed up on the jetway while everyone is struggling with setting up the initial conditions for the deplaning scenario I described above. At least people could get seated sooner and be comfortable for longer while they're waiting for takeoff.
[1] Based on a true story.
What if larger sizes of clothes were priced higher, since they use more material? I wear a small in almost every case so wouldn't affect me, but man it'd be nerve wracking for a lot of Americans.
In most cases the cost of fabric itself is a pretty minor part of the garment price- you're paying for someone to design the clothes, assemble them, ship them, and operate a store that sells them, and those costs are pretty much the same for small and large sizes. Adjusting the price based on the amount of fabric used would probably end up being a dollar or so for the things most people wear on a daily basis.
Unusually large or small sizes can end up more expensive (and/or only manufactured in limited quantities) because they're not commonly bought and they take up space on the shop floor and in inventory which could be used for things with higher turnover. (Edit: Also at the extreme ends of sizing simply enlarging or shrinking the pattern won't work well, you have to redraft it so it sits correctly on a petite or plus-sized frame).
Shipping and even assembly costs should scale with size.
They already are?
Mostly they don't.
lol. Having done the laundry, I think women's clothing has significantly higher cost:weight ratio.
That's comparing apples to oranges.
Some shoes (Meindl Boots) actually go up in price for larger sizes (>46 EUR, 13 US I think) due to the additional cost of material.
if you are very tall they charge a lot extra for having tall sizes... what are you talking about??
You mean mass.
Otherwise I would buy seats for my personal helium balloons on either side of me.
Are you at all concerned the airlines will remove the air from the cabin if you try this, just to emphasize that you’re not going to get a refund this way?
Anyway I’ll be across the aisle with hydrogen balloons paying less than you either way. Enjoy your flight!
I’ll be up in first class with my negative mass doppelgänger who travels with me so we both get a free flight.
I’ll ask the pilot how this is going to affect weight and balance to take my mind off the implication one of you is made out of antimatter.
> personal helium balloons
Not allowed because they're too big to be carry ons.
And I think that you may mean volume.. :-)
Mass and volume both count, in an aircraft, don't they? And many oversize humans present logistical and safety challenges:
- Taking up more than one seat with girth, needing a seatbelt extender.
- Fitting through narrow passages, tight turns, limited headroom
- An unconscious person may need to be lifted, and transported somehow
- Toilets and life vests and other safety equipment, rated for your "standard average man size"
- Total mass of passengers/cargo, and its distribution on the aircraft itself
Elevators in the US have a maximum weight and maximum occupancy rating.
Arguably, if obesity is a disability, then appeal to the Americans with Disability Act or similar regulations, but from a standpoint of safety and the common good, it does not seem unreasonable for airlines to charge extra to cover their expenses above.
Moral argument: it's a sexist strategy. Yet another situation where men pay more and get worse service.
Economic argument: fat people are more likely to make use of on-board food service despite high markup, so you want as many of them as possible.
Speaking as a fat person, air travel is horrible and I'll happily drive a couple thousand miles to avoid flying.
On a flight to Greenland I spent six hours smashed up between the window and a stranger (constant, sweaty, skin-on-skin contact) because they put three fat guys right next to each other on a full flight. I'd rather have taken a couple months of vacation and ridden the icebreaker in.
> they put three fat guys right next to each other
Much better than subjecting someone who has made better life choices to the consequences of yours.
Is it, though?
I don't particularly want to make life choices based on what's most economically efficient for airlines, but you do you I guess. And while my being fat is definitely a result of my life choices, that's certainly not the case for all of us.
Regardless of what size you believe everyone should be, the airlines have to deal with the size that people actually are. They have made the choice to size their seats in a way that causes this problem. They could have just plastered "no fatties" at the ticket counter, or maybe had a section of seats reserved for fat people at a somewhat higher price point and required people over a certain size to use them, but instead they've chosen to sit us all together. And they do so with the knowledge that judgemental assholes will just blame the fatties instead of them.
But keep playing their game, you appear to be good at it.
The airlines are dealing with the size people are by, in your example, preventing those oversized for their chosen seat from negatively impacting others.
> And while my being fat is definitely a result of my life choices, that's certainly not the case for all of us.
It literally is. No matter the genetic predisposition, you need a caloric surplus to get fat.
> They could have just plastered "no fatties" at the ticket counter, or maybe had a section of seats reserved for fat people at a somewhat higher price point and required people over a certain size to use them, but instead they've chosen to sit us all together.
They do provide bigger seats at a higher price point though. You have chosen not to make use of them and then blame the airline. If you are big enough that sitting next to someone your own size causes you discomfort then you would be encroaching the space of someone smaller sitting next to you. That wouldn't be fair to them.
I mean, it is kind of optimal. Fat guys will experience constant, sweaty, skin-on-skin contact in a flight anyway, so placing them together reduces the total constant, sweaty, skin-on-skin contact experienced.
A fat guy next to a skinny person doesn't experience skin-on-skin contact. Which is why I do everything I can to get an aisle seat and hope the middle seat is empty or has a skinny person in it.
I'm a regular guy and I have experienced skin on skin contact when someone overweight is next to me on a plane. Why should I have to endure that ?
Ask the airline, they're the ones that choose narrower seats than the manufacturer's recommendations. I assume this was a budget flight or one of the airlines like American Eagle that service smaller airports?
Having wider seats than necessary would mean less passengers per flight, ergo unnecessary ticket price increase.
Narrowing them further can allow even more people to fit, uncomfortably. The fact that you have any space at all is because larger people have to fit somewhere.
yeah sure, we should thank them.
Fly business class next time.
No business class on the Pituffik rotator. The only other option is flying through Copenhagen (good luck getting the company to pay for that) or sitting in a jump seat on a C130 with your shins against the cargo.
> Yet another situation where men pay more and get worse service.
Is this some kind of satire? In many cases (for a whole slew of things), I feel like men pay less and get better service.
What are those cases? Vanity products where perfectly comparable cheaper options are available?
Any amount of premium is worth not having a random stranger on your itinerary.
You're going to end up sitting next to a stranger anyway if you're flying alone. Nobody says you have to become friends, but I wouldn't mind having in common with my seatmate that we're both the kind of people who don't take the standard option at face value.
If anything, booking together with a stranger would allow you to leave an empty seat between you which is less likely to be filled than if you leave two empty seats next to you.
And the service could even be set up to give you some choice over the stranger (at the expense of less matches) like setting a maximum weight.
Any time I do select a seat in advance, I try to pick my window seat where someone already has the aisle one. It works surprisingly often to get an empty seat in the row!
I've always thought there's a difference between who you book with and who's on your itinerary. Very rarely do I say I'm traveling with anyone unless we're staying in the same room. I guess these fares do specifically state that, but I have a very hard time imagining anyone at the gate would care, they're typically doing the bare minimum as they should.
A company can figure out the premium and just average it out across the pax who book thru them. Further they could risk-manage no-shows or other bad behaviour based on ratings and feedback. It's just wasting everybody's time to go thru intermediaries.
Do they have to show up? What is the carrier policy on travelers that “miss their uber”?
No they don't, but they paid for a ticket, and any insurance amount is probably more than the discount of flying in a group.
Hi it's John! Is that you, Steve?
Why?
Because they may change their plans. They could be a no-show (which will affect your return flight). They could call and change the flight without your knowledge. They could add extras to the trip and charge it to your card.
People are flaky, and being on the same itinerary with the same PNR as someone else means your trip is in their hands.
Some sort of service that sat on top of bookings would have its own set of terms and conditions that you agree to, which would at least disincentivize them from acting against your interest.
Imagine realising that everyone on Earth you don't know is a random stranger with that mentality, even surrounding you on a non-private flight.
I can foresee that backfiring when you miss your connection and end up having to stay somewhere unexpected overnight, and then the airline will only pay for one room for both of you.
Traveling together does not imply that you're rooming together. It's probably a bit of a fight with the airline to get them to pay for it, but then everything is a bit of a fight with the Airline.
Sounds like the pretext for the opening of a great film.
lol I love that concept! Replying here so that I’m reminded of the idea in case I get the time
That would be a useful and funny site
Ride-Along Roulette
AirUandMe
OnlyPlanes
Tbh this makes perfect sense. As someone who worked in airline revenue management for 11 years, it always seemed a little odd that the sales tactics people use everywhere else - group discounts, BOGO, etc - weren't being used by airlines (yes, group bookings could often get discounts, but usually for much larger groups).
What's remarkable here is that airlines waited this long to do it. Sad news for me as a usually solo traveler who prizes flexibility, but I understand airlines wanting to prioritize groups and more locked-in fares.
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 advance. Auctioning off unsold seats. Selling itineraries with multi-day layovers in a 3rd city (basically adding a second destination to a vacation). Lots more with a bit of creativity.
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, but I assume there is some adverse selection included in how they need to price those fares.
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..."
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.
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.
A lot depends on your travel habits. Credit on my usual airline (United) is pretty much a no-brainer within the year--I'll use it barring circumstances where losing some airline dollars are the least of my problems. Less so than it used to be but still.
For hotels, I still tend to pay the premium. I don't expect to cancel but, especially for an extended city stay, it can be a fair amount of money and the premium usually isn't that huge.
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.
> As someone who worked in airline revenue management, it always seemed odd that the sales tactics people use everywhere else weren't being used by airlines
Remember the really old days when air miles were awarded solely by distance flown rather than by dollars paid? This made no business sense. It meant that someone who flew the cheapest tickets could rack up as many points as a last-minute first class business traveller who spent massively more ticket.
With the airlines I’m familiar with, it seems that pricing anomaly has been corrected. Air miles are much more correlated with the price of the ticket these days. Eg., you don’t even get air miles on the cheapest tickets on one airline I know.
But I still wonder why the airline industry created an air miles formula so disconnected from the value of the passenger in the early days.
Because of the difference between:
"Congratulations! You flew 100,000 miles with us!"
"Congratulations! You spent $100,000 with us!"
The first mileage program was introduced only a couple years after deregulation, so it probably made a lot more sense at the time as a rough proxy for revenue, and revenue management at the airlines wasn’t nearly as sophisticated as it is today.
Alaska still uses miles flown. It’s pretty annoying since I’m doing some short hop flights with them that cost a lot and I get basically nothing for it.
I actually prefer the miles per $ model since it seems more fair for everyone. Obviously it’s less exploitable but that’s exactly the sort of thing everyone is complaining about.
In the early days you didn't have the internet where people would share every tiny anomaly, allowing thousands of people to exploit them. Even then, you had a few people realize they could do mileage runs, but it was considered additional revenue and the perks of doing so weren't valued nearly as highly as they are today.
I usually expect to see BOGOs, group discounts, etc advertised. If airlines showed the seat price along with a group discount I don't think people would have a problem with the price difference.
When I'm in the store and I see 3 for 2 or whatever, I can think, yeah, ok, I'll be using three of 'em soon enough, fine I'll get 3.
But when I travel, it's not like I'm gonna call up my buddy and ask him if he'll join me on a flight so I can get a better ticket price. And if I'm going on vacation with my family, I'm not going to buy individual tickets, like why would I do that?
If these things aren't advertised or even made visible in any way other than the user happening to discover them, they're not sales tactics, they're just scumbag business tactics to prevent pricing transparency.
I find it weird that this is news and not:
- That it's still way cheaper in most instances to book a return (especially where the "trip" straddles a weekend) rather than a one-way fare when travelling long haul - even if you just throw away the return flight.
- That you can sometimes get access to totally different inventory by booking a package including accommodation, even if that accommodation is one night in a shared dormitory in a hostel (which you just don't go to).
At least group discounts have a recognizable economic rationale. But in these examples you are getting a strict superset of the same SKU (OK, maybe the change rules might be a little tighter, but not in a way that's perceptible) for less money.
I've definitely come across the one-way flight costing more than a return
My guess is the airlines think one-way people are business folks (so the price doesn't matter because it's getting expensed), whereas return travelers are paying their own way
I vaguely remember London subsidising tourist flights. That would require knowing when the tourist arrived and left.
Do you have any examples of a one way direct being more expensive than a round trip, with both of them sharing the same outgoing flight?
I had this a year ago on ZRH->SFO.
One way business 6,032 Swiss francs.
Round trip business (with a return 6 months later) was 2,530 Swiss francs. So I screenshotted the horrible one-way price to go in my expense report, and then booked the round trip ticket.
> So I screenshotted the horrible one-way price to go in my expense report, and then booked the round trip ticket.
So… you committed fraud? Cool?
I’m all for sticking it to the corporate overlords, but careful how far out you stick your neck.
No, I was meant to book a one-way ticket, since I was moving offices. But I had to have evidence to show that booking round-trip was cheaper in case anyone questioned why I had purchased round-trip instead of one-way.
Try London to Washington, DC and watch your eyes pop
You might be able to find an airline where it doesn't happen, but you will definitely find airlines where it does. Just verified with Delta and British airways and Lufthansa
If you're not seeing them you're probably looking at domestic or nearby routes. Try transatlantic.
US to Europe open jaw can be weird. I've done somewhat crazy return to origin European city (typically Heathrow) to avoid. And then I've had times when it's been perfectly reasonable.
It’s not uncommon with flights to Europe. I believe within the US it doesn’t happen though.
Isn’t it a waste to book accommodation and not use it? If it is a popular place, maybe they’ll give it to walkins or something, but otherwise?
Isn't it a waste to spend more for a flight when you could get the same flight for less if you also booked an accommodation you don't plan to use?
I meant the accommodation going to waste (unused), which could be used by someone else.
But yes, in terms of money, it sure is waste to pay more for the flight.
Don’t forget they oversell flights anyway – it’s very likely someone else will use it even if you simply don’t show instead of canceling the ticket.
My home is empty nearly 70% of the time. Surely that is more wasteful than not using a dorm bed once per year
Singapore Airlines has been doing (used to do?) do this for ages: "GV2" was a Great Value fare for 2 people, "GV4" for 4.
I also don't find this particularly outrageous. Lots of companies do volume discounts, and traveling as a family gets very expensive very fast.
Finally, the fare bucket system used to price flights usually works the other way to penalize groups. If there's 3 seats left in the cheapest bucket, and you try to book for 4, you don't get 3 cheapest plus 1 more expensive, your entire group gets priced at the more expensive bucket.
I don't have any data, but it wouldn't at all surprise me if single/business travelers are way more likely to cancel or change flights, and this is just pricing that into the ticket cost.
I'm skeptical. Not sure why as a solo traveler I'd be more likely to cancel than a family vacation. If anything, more can go wrong in the case of the latter.
Business traveler maybe. Not my money and business stuff happens. (Usually they want you to book non-refundable because it comes out ahead in the end.)
> If anything, more can go wrong in the case of the latter.
Which is why the people involved take good care to prevent anything from getting in the way of those plans.
If you miss your flight when travelling solo, you disappoint only yourself. With a family the number of disappointed people increases accordingly.
Canceled flight is not canceled trip. For refundable trips at least, solo travelers are more likely to cancel and book another flight. Source: done this myself.
I've flown a good number of transatlantic routes with my family, and I've also flown over alone.
From my anecdata, being single greatly increases your chances of being bumped off a full flight. And it's a lot cheaper and easier to compensate/redirect one person than a family of four.
You aren't really "bumped". They are legally allowed to oversell the plane. You were never getting on the plane in the first place. They just use weasel wording language like the flight being "full" when they communicate it
I did once have an airline offer me something like $1500 USD and 50,000 bonus miles if I was willing to cancel my flight, but that was days in advance.
> You were never getting on the plane in the first place.
I'm not sure that's true. The airlines are gambling that at least one person will miss the flight for whatever reason, and they'll get away with overbooking.
But, of course, when they loose that gamble, it's really a passenger that looses. The house always wins.
> You were never getting on the plane in the first place.
Not always the case, you could be physically removed from the plane because the flight is full:
https://www.flyertalk.com/articles/overbooked-united-flight-...
I suspect they also empirically have less price-sensitivity on average, for a variety of reasons
Changing/cancelling flights is not usually for free.
I did it for free once, but I think the airline was just bad at math. I flew most of the legs of my flight. Then the last leg a hurricane showed up and they offered me an opportunity to rebook since it was likely to cancel the flight.
When I rebooked, the airline gave me a credit for the round trip flight in total. I only had to book a one way ticket on the last leg, so I obviously was able to "afford" the flight without additional expenditure on my part.
Yes, it's already baked in. A cancellable ticket is more expensive.
Less than 20% of legacy carrier tickets are basic economy, and even ULCCs don’t always charge a fee anymore. So by numbers, it is usually for free.
Not where I live at least, by any means.
"Penalizing solo travelers" is a hell of a spin on quantity discounts. If this isn't click bait what is?
You can call it penalizing solo travelers, you can call it inventivizing group travelers. If you look at them relative to each other, both are true.
This just in: Airlines penalize those not traveling for bereavement.
Airlines don't provide bereavement discounts anymore.
Delta does.
Yup. It's funny how this stuff evolves.
You used to see "surcharge for visa" but visa made that illegal.
So now you see "discount for cash/debit", and everyone is happy!
Unfortunately you don't see that in the EU because the EU would rather have centrally controlled financial transactions than act in the interest of the citizens.
Visa isn't happy. But fuck them in particular.
Huh if this becomes mainstream there's an opportunity to make a social media website to purchase in groups and make friends for the flights
Good idea in principle. In practice this could invite unscrupulous actors, or people who flake out at higher rates than close family -not that families can’t flake out, but I’d imagine it’d be a lower incidence.
There are already websites, like Going, for getting flight deals. As a solo traveler who doesn’t have to coordinate with anyone and can pack light, I can jump on the deals when they come up and save a lot more than what a regular price group rate probably is. Looking at my upcoming trip, I got it for 50% off the current pricing, for solo or a couple.
Coordination with others also makes booking take longer and tends to fix dates and locations, which makes it hard to grab a deal when they come up.
I "used" Scott Cheap Flights in 2018 for a few years and never found a good deal
You have to invert the order of how most people plan travel.
Typically people plan in this order:
1. Where to go
2. When to go
3. Check airfare
Flip it on its head:
1. Keep an eye out for cheap flights from your home airport
2. Pick one of those destinations
3. Choose when to go
Not exactly inverted, but the flight goes from last to first.
I had Ireland in my head for my next trip, but then Italy showed up last week. That sounded pretty good, so I checked the dates and found a flight that fit in my schedule, and booked it.
It’s not great for getting a flight around a conference, wedding, or some other event you are planning around. But when you know you want to take a vacation to somewhere and sometime this year, it can cut flight costs in half.
A single flight ends up paying for the cost of the subscription 10x over, and then some.
Also, it could be somewhere near where you want to go. I had tickets to Croatia about 5 years ago, but hand to cancel due to the pandemic. I didn’t know anything about Croatia when I booked, but I figured the worst case scenario was I catch a quick ferry or flight over to Italy once I’m there. Once you’re over there it’s cheap to go one country over. That flight to Croatia was $289, that cheaper than a flight to Nashville for me, which is only about an 8 hour drive.
I did the same thing when I booked a flight to Sweden. I didn’t know if I’d like it there, so from there I booked a connection to Copenhagen for next to nothing. I spent a week in Copenhagen, but then ultimately did go back to Sweden for week, which I ended up loving. I’m glad I didn’t spend the whole trip in Copenhagen.
Another deal I got that stood out was to Tokyo. I think I paid around $550 give or take. A coworker of mine has family there and goes on a regular basis, he was floored by that price. He always pays over $1k, and usually closer to $1,500.
Ultimately it’s just an alert service for flights that are abnormally low. If you have a specific destination in mind, Google Flights is pretty good at showing when the cheapest time to travel is, giving a booking date of today. Of course it fluctuates over time, which is where the alerts come in.
It’s saved me thousands. Though I probably would have only taken about 20% of the trips I have without it.
Thanks yeah that was my strategy I'm flexible with travels, I remember setting Paris and Lisbon after to see what flights I could have. Maybe it was focused on USA. Maybe their emails was getting my SPAM folder, IDK what happened but I never found what I was looking for.
I got my own flight tickets by looking on my own though.
550 USD for Tokyo is so cool, wow
This must be a new thing, because I've experienced the opposite. I needed to book 7 tickets, and the price was much higher than a single ticket. So I ended up adjusting the quantity and saw the price increase at around 4 tickets. So I ended up splitting the purchase into two transactions. However, after purchasing the first 4 tickets, the following price for single ticket was now slightly increased - so they were really playing some games or perhaps there was limited availability that was adjusting prices real-time.
They are trying to charge as much as possible while filling the plane. If you take too many seats they need to up the price for the next person because someone needs to say too expensive and not fly on that plane
Many airlines operate on the following model. Imagine the plane has a hundred economy seats. The seats will be split into groups of 10, each group has it's own price.
Group 1 seats cost 100 dollars Group 2 seats cost 110 dollars ... Group 10 seats are 350 dollars
Your group order got the last seats in group N and the first seats in group N+1
This is where the myth of "booking late gets you the cheapest seats" comes from. If an early booking passenger cancels their Group 1 seat it becomes available to buy again and it is still a group 1 seat even if every other seat has been sold. So late cancellations can make cheap seats available again.
I had the same with just two tickets. We ended up booking them separately because it was cheaper. It was a modest difference but still.
I would guess this is about middle seats. No one wants them but if you’re part of 2+ party you’re much more likely to take one. The alternative is two aisles side by side but those are tricky to get as the plane fills up.
I thought everybody booked aisle and window and left the middle unbooked. If you get lucky, you have an extra seat; if not, the middle seat will almost always be willing to swap for one of the other two and you can still sit together.
Nope. If an empty row is available, book the middle seat. No one wants to sit next to the weirdo who chooses the middle seat first.
But then if the plane is full you are stuck in a middle seat whereas, like gp pointed out, choosing window + aisle for a two-person booking almost always lets you fallback to window + middle or middle + aisle if the middle seat does get filled so there is really no risk in taking the chance.
I do this but I’ve been told other’s views on it range from “seems fine” to “this makes you a terrible person”
The business traveler who is less price sensitive and almost always books a solo itinerary.
> less price sensitive
As a business traveler I actually want the price to be as high as possible while satisfying the company rules on airfare. The fare is fully reimbursed, so a higher fare means I get more points on my credit card.
Now the company rules on airfare will probably reference something like the least-cost logical fare. So it is in a business traveler's interest for all airlines to raise prices simultaneously.
Business travel is weird.
It's a shame this is so far down the page (at least for me, at this moment) because I'm fairly certain you are exactly right.
HN comments vote need more than 40 minutes to stabilize
It's also literally in the article itself:
"It's just another way for airlines to continue 'segmenting' their customers, charging business travelers paying with a corporate card more while offering a better deal to families on the exact same flight."
All my solo flights over the last year were wedding related. That is probably a huge cash cow for the airline and hotel industry. The hotel is basically never full even with the hotel block so it is probably a very welcome cash infusion for them at an otherwise sleepy locale.
Airlines are always doing a negative to consumers. Squeezing passengers, gouging, treating them like they're numbers on a spreadsheet - knowing their options are limited - seems modus operand by the airlines.
We need a passenger bill of rights, not just for the airlines, but also how passengers are treated in airports, by security, and concrete cause of action for consumers when airlines misbehave.
This is no different than spending 98c per roll to buy 32 rolls of toilet paper vs 1.33$ per roll to only buy 12.
We have a Sam's Club membership because buying in bulk is cheaper.
Edit: checked prices Sam's vs Meijer
Yep, we gotta make all tickets much more expensive.
This reminds me of the story of Frank Lorenzo, union-busting airline exec who effectively fabricated the story of how airlines were all "struggling" as businesses to force government support of anti-union practices. It's a bit of a tangent, but the talk page on his wikipedia is one of the more fascinating fights between editors and paper doll accounts I've ever seen:
I'm not sure if this is driven to incentivize having children, but the more general point of incentivizing children for the good of society is a valid one. A society that stops having kids (or importing them) will cease to be a society before too long.
Or, a society will just start having children again once the population gets small enough that having children becomes a more optimal decision or the supply of things that make having children optimal is increased...
What is next? Charge iPhone users more than Android users? Charge users with email address on custom domain more than on free emails? Charge Jews more than Mexicans?
You go to a bakery and he charges more because you wear a suit. You go to Europe, a guy in front of you buys a bread for €1, but same bread is €3 because you are tourist? Then you go to buy a toilet paper and same thing happens again because your ass is worth more?
I had a different experience with Ryanair. When you book solo, they show you price with a tooltip: "last 2 tickets for that price!"
If you are going to book for 3 passengers they charge three of you with the next level, more expensive fare.
But so far my favorite is they force you to buy seat if you travel with infant. You cannot select free random seat as their planes have rules to allow infants only on the seat near the window.
I would just buy two seats and sort it out on the plane. It's not like they can separate you.
Companies give quantity discounts. Shocking!
The more people they can fill the flight with the more lucrative it is to fly that route, it makes perfect sense. Just like milk prices are more expensive the less you buy, per liter.
Anyone being upset about this is just looking for reasons to be upset and maybe should go outside more and get a hobby.
I wonder if this could be abused by purchasing 2+ refundable tickets, and then canceling all but 1.
Fully refundable tickets are an entirely different fare (and much more expensive)
US carriers are the absolute worst trying to squeeze every penny while the service has become worse. Flew through Japan on a Japanese carrier and the difference was insane. Japanese carrier was customer centric at every step.
it's crazy how if you just want a ticket now it could be say $700 but if you wait the same trip can take $150 different providers, I was the former just got something listed on Google Flights with SouthWest but yeah
this might be a good thing if viewed from the opposite perspective: people with kids/elderly parents usually can't afford to pay as much per person as people traveling alone for fun/corporate travel.
Seems intuitive: the group passengers are likely to have to cough up another 5-10% more at the time of check-in, in order to sit together, so it all evens out.
This is good. Almost all price discrimination is good.
Larger groups are more price sensitive. They should pay less because they have more buying power when they buy ahead.
> In this case, the rationale for charging solo travelers more is fairly clear: It's just another way for airlines to continue “segmenting” their customers, charging business travelers paying with a corporate card more while offering a better deal to families on the exact same flight.
I think the explanation is wrong and the author is jumping to conclusions. Airlines have long offered "bulk" discounts. Their goal is to fill as many seats on a flight as possible. What we are seeing here is their group pricing creep into their direct sales.
Airlines should grow up and start charging by weight just like carriers do for every good except passengers (flat rate shipping boxes excluded.)
If you also get seat sizes/pitches that match that price then I'm all for it.
Remember Accompany.com and Mercata and other group-buying websites from the 90's dotcom boom? Time for those again?
Curious if any others are priced out of traveling? I haven't seen family in 3 years.
Would this be allowed for international flights under IATA's fare rules?
I think they because so custom in their pricing that is becoming insane... I wish they are more predictable in how much things cost, it is almost like weather, how much will airfare cost.
If you can predict consumer demand, trade policy, interest rates, and money printing schedules then you can predict prices. Problem is we can't predict any of those things.
Cell phone lines only $30/line when you buy six. What, you don't have a family of six? Weird.
Or when you switch to an MVNO :)
Then it's one line, $10 / month.
For the privilege of using the hand-me-down data of carrier's network (i.e. getting deprioritized in any situation where the network is congested)
USMobile gets you Verizon’s network at the same priority as Verizon customers. $390/year for “unlimited” data (but really 100GB/mo at high speed).
Yep, that’s who we use. It is half the cost of VZW’s cheapest plan with more data and better QCI. The latter aspect turns out mattering a lot more than I thought.
Why is American cell phone service so expensive?
In comparison to what..? Vietnam? Canada?
Other G7 countries. Unlimited data is about $15 a month in the uk, 150G is even less
I love how the author thinks they've discovered something super secret, when they have in fact just learnt about "Group Discounts".
Author will lose their mind when they buy 10+ of the same thing from AliExpress.
From the conclusion, they seem pretty confident that this is not "business as usual":
> Whenever this pricing strategy began, this is a massive change in how airlines set prices – and one that will likely catch many travelers off guard.
> Unlike shopping at retail stores or Costco, bulk discounts are unusual for airlines – at least not just for booking just two passengers instead of one. And these higher fares for one passenger are the opposite of what we typically see, where travelers booking for two passengers or more wind up getting charged more per person than a single passenger.
> Unlike shopping at retail stores or Costco, bulk discounts are unusual for airlines – at least not just for booking just two passengers instead of one. And these higher fares for one passenger are the opposite of what we typically see, where travelers booking for two passengers or more wind up getting charged more per person than a single passenger.
This isn't strictly true. Airlines have long offered bulk pricing through travel agencies and booking partners.
This was prevalent until the early 2000s, it is far less common today. Corporate discounts used to exist based on guaranteed minimum legs in some time period. This ended when airlines discovered only flying full planes made them more money, making bulk discounts more pain that they were worth.
It probably just depends on how full the flight is. If the plane is empty, there will be discounts for families, because they want to sell tickets, and families are price concious. Solo travellers usually are not.
If the plane is on a popular route, you'll pay through the nose, and there sure as hell won't be any group discounts. You'll pay almost full price for a two year old, because they know they'll fill the plane no matter what.
Airfare typically has group anti-discounts, where if you buy more tickets on a single reservation than tickets available at the lowest fare bucket, they’d sell you all the tickets at the higher fare instead of mixing fares
I bet most customers prefer that over finding out that they can't sit together.
That's my experience as well.
2 isn’t exactly what you’d think of when you think of “Group discounts”.
Buy one get one free
You've never seen a 2+1 free or 3+1 free pricing in stores? We have them frequently here in Europe on some things. This is same thing and tbh I am surprised it took so long.
And as a father of 2 small kids not complaining at all, having multiple kids these days is brutal also financially, any small thing that helps is very much appreciated.
> You've never seen a 2+1 free or 3+1 free pricing in stores?
Yes and as a solo person I can choose to buy those and take advantage of it in the same way a family can. Usually it's consumables like a 6 pack of bagels or something that might cost $5 which I'll 100% use.
This airline approach comes off much different, because as a solo traveler there is no benefit or reason why I would ever buy 2 tickets to save $80 per ticket since I wouldn't get any value from it and the cost of 2 tickets even with a discount will be greater than 1 non-discounted ticket.
Most airlines seem to also charge to pick your seats. I wonder if people who travel as a group end up paying that discount back to sit together.
If you regularly eat bagels for three persons you might also be able to take advantage of a second airplane seat all by yourself soon.
On a more serious note, group discounts for services are very common and usually not something you can take advantage of as a solo customer.
This is different than most group discounts because the airlines aren't advertising it or making a big deal that they're doing it.
They'll be devastated when their large group has a gratuity included at the celebration dinner, though.
Good.
it truly is unfortunate how society punishes you for being single. Insurance, tax, credit worthiness, even health care.
i wonder how low birthrate societies like Japan or South Korea are like, is it worse to improve birthrates? or is it better because being single isn't an anomaly?
More importantly, the number of single/solo people isn't even low in the US. If i had to ballpark it, at least a quarter of the population is like that. Lots of married people travel solo for business for example. Why aren't some airlines playing capitalism well by offering "business elite" flights where solo travelers get a loyalty discount and there are no children on the flight? Not for all destinations but at least popular ones like to vegas or NYC <-> LAX.
Airlines already do that for business routes. Just in the other direction on pricing.
Pre-Covid there were a couple airlines playing around with business class only flights from NY to LA.
Solo business travelers are where the money is made. The rest of the seats tend to exist at cost or even below to fill up the plane. Airlines would be pretty foolish to try to lower margin on the least price sensitive class of traveler they service.
Business does volume discounts. News at 11.
I never would have understood this as a young, single person. Now that I have a family there are several times per year where we price out the cost of a solo ticket for one parent, the price of taking one or two kids, or the cost of all of us going for something. Having a quantity discount would absolutely tip the scales for us for certain trips.
People will look at this as penalizing single travelers and want everyone to have the lowest fare, but that’s not the real alternative. A flat fare would bring solo prices down and group rates up so the blended average is the same.
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?
It's probably also worth noting that the majority of these hotels and Airbnbs are also designed to accommodate two or more travelers. Thus the complaint isn't really "single-person rooms are priced that same as two-person rooms," but rather "single-person rooms don't exist, which means I have to pay for more space than I need." In this sense it's not really any different than any other product that you wish was sold in smaller quantities.
It's probably a bit of a mixed bag. Beds are reasonable for two people (Usually a queen/king or a couple queens). But there may be only one sitting chair. Two people can manage but hotels split the difference a lot of the time.
The difference in costs between accommodating one person and two people is pretty minimal. Even things like breakfasts are prepared in bulk.
Most single people own and sleep in double beds, so there's no sense in which a double bed is "designed to accomodate" two travellers.
The issue is more that discounted single room rates would encourage unofficial double stays, which would lose significant income.
I doubt the difference is minimal. Forget the size of beds, the point is that a hotel with 200 single-person rooms has twice the beds, twice the bathrooms, roughly twice the walls, etc. than a hotel with 100 two-person rooms.
A hotel hosting 100 single people will be roughly the same size and operating costs as a hotel hosting 100 couples, even if the rooms had a 3’ bed rather than a 6’ bed And thus could be 3’ smaller
Right, but the former hotel has half the capacity as the latter.
At least here in Europe there are plenty of hotels with solo traveller rooms (<=120 cm beds). But still not uncommonly priced at 80-95% of a double occupancy doublebed-room.
I often book a double for myself (often for the same price or €10 more) for a bigger bed.
The room will be about the same size as a room with a double bed in, so 80% seems a massive difference
(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 privacy that you also seem to specifically need/want. but many solo travellers don't care to pay for that.
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.
There’s a very big difference between sharing sleeping space with multiple complete strangers and sharing space with family.
The point is you are paying for one bed, one living area, one bathroom, whether you are a single traveller or as a couple. I’m in a hotel room at the moment with a bed and a sofa, can host 4 people or me, it’s the same size. At breakfast I usually sit on a table which can seat 4, but certainly one that can seat 2. I use almost all the resources a couple do, and spend less at the bar in the evening, so I’d expect to pay the same or even more.
Hostels often offer private rooms, to varying degree of privacy. But i've certainly stayed at hostels that offer very comfortable single private rooms with private bathrooms for a third the cost of a local hotel room. Expensive for a hostel, but great value for the privacy.
But if you're traveling with your family, just get hotel rooms. Hostels only came up in the first place in response to a gripe about solo travel.
Cruises are especially bad for this. I’ve never gone, but I’ve looked at but after I had 3 independent people tell me to take one in the span of a few months. Most are priced assuming 2 people in the room and if you’re solo it seems like they expect you to buy 2 spots.
I’ve seen a couple where they have a few solo cabins, but the amount of effort to surface this stuff turns me off to the whole thing.
The only reason I’m still half looking is that it seems like the easiest way for a random person to set foot on Antarctica, which would be a cool thing to check off the bucket list.
>if you’re solo it seems like they expect you to buy 2 spots
Cruises are probably more complicated because they price things other than your cabin into the "experience." (Though I think the Queen Mary 2 a few years back was slightly less than 2x for just me.) But the random Marriott doesn't really care if there is one of you or two when it comes to pricing.
The other things priced into the "experience" are why I call out cruises separately. With a hotel, I get it, a room is a room. But a solo cruiser is eating half the food, drinking half the drinks, taking up half as many seats at shows...
Maybe that's the problem. Cruises rely on people spending a lot of extra money onboard the ship, or drink packages, nicer dinners, excursions, etc... fewer people doing that, with less social pressure to spend extra, means less money for them and they have to make it up somewhere.
Isn't the cruise capacity still limited by the number of rooms? So saving peanuts on drinks and cheap food probably doesn't make that big of a difference for them.
Why wouldn’t they care?
I imagine 2 people use roughly twice the bedding, towels, toiletries, etc., on average.
Well, they mostly don't. They're often using the same bedding. Most toiletries are squirt containers these days. I don't think toilet paper is that expensive. And another towel or two to wash is probably not a big deal. And to the degree the hotel has a restaurant or bar they probably come out ahead. Your hotel may take a different approach but it's near universal (perhaps outside of resorts) that hotels charge the same for 1 or 2 guests.
Citation needed. In my experience it's entirely the opposite: it's nearly universal that hotels charge more for two guests than one.
You can easily verify this on Booking.com, where the search results show price per room and how it varies based on how many people are in that room and whether they're adults or children.
Is this a non-U.S. thing perhaps? I’ve never in my life seen a U.S. hotel charge more for double occupancy, outside of special packages that include e.g. meals for each guest.
Price only varies for the breakfast-included option in my experience.
I don't care to do research. I will say when I book on Marriott.com there's never a difference. I don’t use booking.com much though.
2 vs 1 doesn’t significantly impact space or cleaning labor, unless you’re staying in a super minimalist itty bitty unit (which I rarely find exists anymore)
If there's two beds, maybe. If one bed, doesn't matter how many people sleep in it. Maybe twice the towels?
I'll say over the years most places do not respect the "if the towel is not on the floor don't replace it". I'm fine with reusing a towel to dry off twice, but some hotels change them every day, even when their signage is indicating a protocol to prevent that sort of waste.
There are a couple travel agencies in Ushuaia that sell open cabins at steep discount for cruises heading across the Drake Passage. If you've got a little flexibility in your schedule, you can set foot in Antarctica for a lot less than if you bought a ticket anywhere else.
also: be sure to make offerings to the sea gods before sailing because crossing the Drake Passage can be... exciting.
Go to Ushuaia, and book a normal ship just like all other folks do. You will have 100x more rewarding experience from all of it, guaranteed. Its not just destination but whole road to it that make such trips worthwhile and you will keep remembering it for rest of your days.
Cruises are for folks, how to say it politely... who gave up on any form of adventure or excitement in their lives. Dont be that person, not yet at least.
Ships going to Antarctica often offer single beds in shared cabins.
When I went there, I booked the cheapest bed (maybe $6500 in 2013) in a three-person cabin. It was early season and the ship wasn't full, so the company filled it with backpackers waiting for last-minute discounts in the hostels of Ushuaia. Because I had paid the full price, they upgrade me two classes to a much nicer two-person cabin. And then halfway through the trip, the ship delivered some staff to a museum. The other guy got their cabin, and I got the one we had shared.
I just invited myself along on a "girl's cruise" to Alaska that my wife was doing with her friend (who's actually my second cousin). As the third person in the cabin, my fare only cost $99, plus some fees, compared the several thousand each my wife and cousin paid.
There were quite a few solo travelers we met on the cruise, though - I think they mostly had solo inside cabins with no view.
It is strange balance, but in cruising there is expectation that money is spend outside the base fare on extra experiences. So getting double money from double occupancy is important. Cost of basic food doesn't scale that much. And these extra revenue opportunities is also why occupancy beyond double is so much cheaper.
Ease is relative especially considering cost, but that's the kind of thing that having a good travel agent is good for (eg: finding someone with knowledge of where to stay in Chile and who to hire for a charter flight or boat trip). Economies of scale kinda kick in though so a cruise is probably the least expensive.
Cruises are selling a set space rather than a service or trip per person. The extra incremental cost is minimal for the second person.
Also the more people on the ship means more chances of selling high margin add ons like drink packages, excursions and so on.
Some cruise lines, like Norwegian, have specific solo travel fares and cabins and even social events just for solo travelers
I don't really find this relevant in the US because airline pricing is already the ultimate brutal form of pricing. Not only are they allowed to bill you whatever they want, they are never under any actual obligation to put you on the plane.
This seems surprising to me. I was under the impression that airlines are pretty low profit margin industries, pulling in only around 3-4% in a decent year, and that of that the airline tickets themselves are the lowest margin items percentage wise, with other things like baggage fees being much more load bearing.
You are correct. As much as we like to bash airlines and their decisions, and liking low fares and quality service myself, it's objectively one of the worst businesses imaginable. Extremely high risk, low margin. Every year about a dozen airlines go bankrupt, get merged or bailed out. A small increase in the price of oil is a major risk for most of them.
Most of the more profitable markets have high competition not only by other airlines but also other forms of transportation. Very few airlines are swimming in cash and even those are only a couple bad years away from bankrupcy.
You'd like Milton Friedman and his take on pilot Unions too.
Knowing Friedman's other takes, probably not.
As the saying goes. The best way to be a millionaire running an airline is to start as a billionaire.
Airfare is the cheapest it has been in the entire history of commercial aviation except for immediately after 9/11 and the initial weeks of the global covid lockdown-- but both you and I know those periods don't count.
Most people are ok with terrible service because they save money.
Doesn't stop them from complaining, though.
And yes, "cheapest" includes taxes and all fees.
You can fly from New York to Paris non-stop for $150 if you are patient and flexible. (Please please please call me a liar.)
If you are not patient $500 is more typical.
Twenty years ago was a $800 ticket.
Thirty years ago that was a $1000 ticket.
What's your patient/flexible technique? Let me know.
And you are not a liar - but your claim isn't true at all in Europe - see increased per-flight legislated fees and the loss of budget airlines. Price of flights between 2 destinations has increased by 25-40% in the last 5 years in most of Europe.
Thanks to efforts like increasing the per-flight fees "because of high inflation" (these fee increases are still going up several years later): https://www.nationalgeographic.com/travel/article/why-travel... and loss of airlines like Flybe.
You can still get the madly cheap hop flights, but they are often pricing in income from our flights (or accepting even negative returns by pricing above the per-flight fees) because the planes need to be where you are going to fly a profitable flight later.
So the old status quo where genuinely cheap flights could be booked on a 7 day basis (e.g. cheap thursday-thursday flights) has been replaced by convoluted patterns to get the cheap flights (you usually need to leave on Monday, return on Saturday (if your source airport has lower demand than the destination) or vice versa. I suggest based on flights in the US becoming cheaper, that this is due to government intervention.
I get saving the environment and all that. But let me pay more taxes monthly, don't charge the airline £15 minimum making a bunch of flights unviable. Don't make booking a holiday or conference flight so unpleasant and annoying. I always have to tradeoff wasting a day or two with paying 50-150 euros extra.
It's not the worlds biggest problem, but making that decision is a regular additional dilemma I didn't want in my life. I wish for the days when you could get just normal timetabled flights at good costs if the month (e.g. February) was unpopular for travel. Now those months really aren't cheaper.
If calling you a liar gets me a no-stop ticket from America to Paris for only 150 bucks, then you're a liar.
All I did was go to Expedia and put in JFK and CDG and $149 on Tuesday, July 15th on Norse Atlantic Airways popped up. Return flights the next week were $200-300. Round trip with a one-week stay were ~$500.
Round trips in September are $386-500 depending on the day and duration of the stay. The $386 fare was for a tuesday-to-tuesday week stay and I might just take it, I will be bumping up against use-or-lose limits for PTO by then. There are fewer crowds in September and the weather is really nice.
They are a low profit business, and that kind of liberty is stuff that pushes their profits even lower. They also always fail to differentiate from one another and are always competing on only price and how much fees they can keep hidden.
Personally, I do argue that it's worth it having tickets 10% more expensive and forcing the companies to always allocate all passengers, treat people humanely and etc. It's even worth it the 25% increase to make them let people carry luggage and avoid all the troubles that come with the optionality. But most governments seem to disagree.
> It's even worth it the 25% increase to make them let people carry luggage
You are asking for people who fly without checked luggage (as I usually do) to subsidize you.
Sure, you would subside people flying with luggage. It also reduces the time planes stay on the ground, stops the fighting between passengers for the always full luggage bins, clears the seats in case of emergency, and eliminates the largest hidden fee companies manage to put on their prices.
Anyway, the fact that you just assumed I personally fly with luggage is weird.
A piece of luggage is on the same other of magnitude as the variance in human weight so either way there is plenty of "subsidizing" going on.
Depending on which party you're talking about (airport, airline, etc), a no-bag economy ticket is often below cost, which is made up in volume and extras.
The fact that their brutally anti-consumer business is also not even that profitable for them is really no consolation to the consumer.
Yes it is, because it's the reason why air travel is extremely cheap relative to historical norms.
That's actually exactly the consolation I look for as a consumer, thanks.
This is correct, the single passenger 'economy' ticket is usually a loss leader.
You can make the argument that airlines are companies that sell in flight beverages and also happen to fly a passenger airplane. The actual profit comes from an unusual sources, like deals with credit card issues for a "rewards" program that gives you frequent flyer miles
>Not only are they allowed to bill you whatever they want, they are never under any actual obligation to put you on the plane.
With exceptions, once you have paid for a ticket all commercial passenger airlines are obligated to transport you under their contract of carriage.
All airlines must do this, I even looked up the contract of carriage for the shittiest airline I could think of and Frontier has this to say:
>Involuntary -- If insufficient passengers volunteer, passengers who cannot be accommodated on the flight will be denied boarding and Frontier will provide transportation on a Frontier flight to the same destination. After a passenger’s boarding pass is collected or scanned and accepted by the gate agent, and the passenger has boarded, a passenger may be removed from a flight only for safety or security reasons or in accordance with Section 3 of this Contract of Carriage.
They must also compensate you. If being denied boarding delays you for 1-2 hours you get 2x the cost of the fare up to $1550 and 2+ hours 4x up to $2150.
And they still have to put you on a plane:
>A passenger denied boarding, voluntarily or involuntarily, pursuant to this section, will be transported on Frontier’s next available flight on which space is available and at no additional charge.
https://www.flyfrontier.com/legal/contract-of-carriage
Contracts of carriage are pretty much boilerplate but all of this is to say: if you pay, show up on time, and aren't denied boarding for a safety reason airlines are obligated to transport you to your destination.
(in the US)
"next available flight" could mean waiting 2 days in a random airport, hardly reassuring
One of my co-workers had a flight delayed so long that the alternative flight they offered would have him stay on the plane at the destination airport and begin his home journey immediately.
"denied boarding" seems pretty key here. What about when the airline decides you aren't on the flight in the first place?
> they are never under any actual obligation to put you on the plane.
It's true that airlines wield pricing power but their Contract of Carriage, buried under more fine print than a payday loan agreement, does impose obligations. Rule 21 of United's Contract explicitly allows refusal of transport, but Rule 4 confirms that a ticket with a confirmed reservation constitutes a binding agreement to provide service, absent violations by the passenger (like failing to check in). Rule 25 further mandates denied boarding compensation when overselling occurs, because even in brutal airline economics, a confirmed reservation isn't merely a suggestion, it's a contractual commitment, however creatively airlines may interpret "commitment." Of course, involuntary bumping, force majeure, and the ever-convenient "operational decisions" let airlines off the hook. But to claim they have no obligations is not true.
Some countries (e.g. Japan) charge per person in non-Western hotels. Even then, you may get different prices for a solo traveler because the lower overall price means they need to increase the per person rate to make enough margin with their fixed costs.
They do this in Mexico as well. Always just seems like an honor system thing unless they are checking people at the door to the hotel and/or room each time they enter, which only seems realistic in very small hotels who have no e.g. restaurant open to the public.
Otherwise can’t one just rent the room as a solo guest, and just have someone come through later, as long as there isn’t an obvious group activity going on inside the room?
Why do people put locks on glass doors? Society only works because of the assumption that ~90% of people will follow the rules.
Are you going to bring your own sheets and breakfast as well?
I don’t know about yours, but my spouse is OK with sharing sheets with me.
Depends on region. In many places a hotel room for two guests has two beds that are either separate or together. So make sure you book a king size bed, and also buy one of those fake moustache-and-glasses for your wife so nobody suspects anything at breakfast. Or she can wait in the room and you'll sneak some scrambled eggs and bacon from the buffet in your coat pockets for her.
Or they could just go eat real food instead of the bargain bin garbage served as free breakfast in most hotels.
> I guess as a family be grateful that all hotel rooms come with a 50% (or more) discount per traveler?
This is not always the case. A two-bedroom hotel suite on average costs more than two standard rooms. This happens because the vast majority of rooms are twin/double and cheap hotels often don't offer suites at all.
At a given location two travellers would be chosing from e.g 100 options and at least some of these would be budget/discount offerings. In the same location a family of four would have to chose from 10 options and likely none of them are budget/discount.
Now consider that you HAVE to travel during the school holidays so competition for these damn 10 options increases and the price for both hotels and tickets easily goes up 2-3x.
There are some situations where a family of four would get a better price per person but most of the time it's the other way round.
That doesn't make sense - the family in your example has 110 options whereas the single traveler only has 100.
You can make the same argument about food too: buying chicken at Costco is way cheaper per pound than in Whole Foods or Aldi. Are they also penalizing single people? No: buy more, pay less per unit.
You can’t freeze a hotel room.
The hotel also cannot easily split and recombine rooms and beds on demand. They have to decide upfront how many single-person and two-person rooms to build, based on what they perceive the market desires.
In my experience they often already come pre-frozen and room service will helpfully re-freeze them if you set a more reasonable temperature.
Hotel rooms can’t get spoiled.
You can always stay in Motel 6 for $20/night.
What packs do you buy where it is much more cheaper?
Frozen > 5kg or so?
I see people complaining a lot about single traveler (with their own room) surcharges on both group and self-guided trips. But, you're right, while per-person-double-occupancy rates make it explicit, it's pretty much the norm at most hotels whether stated as such or not.
Looks like the deal is to find someone else who wants to go the same way and then buy the tickets together.
I'm pitching the movie to the Hallmark channel right now.
In Japan, you pay by the person when it comes to hotels. Some will give you a slight discount for the second person. Others won’t.
> Traveling solo is already brutal because hotels and Airbnbs are priced on the assumption of two travelers
The cost for the hotel and Airbnb doesn't really change a lot, if there is more than one person staying in the room. More or less another set of towels and a bit more soap. Even providing rooms with single beds only brings down the costs marginally.
> Traveling solo essentially costs double automatically because of lodging
Travelling with somebody else brings costs down. Hotel rooms have the same surface for single and double occupancy (in fact they are usually the same rooms!). Even if you remove the surface of one single bed, the room stays almost the same. So, it’s much cheaper for 2.
provided you have someone to go with :)
When travelling on your own just go to hostels instead of hotels and you-ll both pay much less (prices normally are per person, not per room) and you'll meet more people who are open to interacting with other solo travellers.
How are 2 travelers priced in? If I rent a 4 passenger car are 4 people priced in?
Would a van cost more to rent then a sedan?
different scenario; more appropriate would be the same car with zero or 1,2, or more passengers.
yes (car rental prices are mostly a function of size)
Only when you're comparing the cheapest vehicles of each size, where the cost of the vehicle and maintenance is probably roughly in line with vehicle size. There are plenty of luxury and sports cars widely available for rent that will cost more than a minivan.
But in reality, rarely. The pricing is mostly a function of luxury AND space.
I’ve regularly seen larger cars with more capacity equal to medium sedans.
Why wouldn't you just stay in a hostel? or rent a room on airbnb?
For two reasons:
1. I don't want to stay in a hostel. See below for more on this; but, hostels, at least the ones I have researched, have bunk rooms and shared facilities. Hard pass for me.
2. I don't like sharing a bedroom and, especially, a bathroom in someone's home when they may be there. There's simply a different level of security (potentially false, I understand) in a hotel vs a rented room in a house.
Reframing it to how it sounds to me: you'd like to temporarily reserve a massive amount of real estate (relative to your human body) from a city's housing reserve and not be forced to pay any more for that than the family who would put 4 people in that same footprint.
Families who travel together also share rooms and facilities, so if that's a hard pass for you then you wouldn't be happy with the "discount" of traveling as part of a family either.
I appreciate the pedantry; but, there’s a significant difference between several random someone(s) having travelers diarrhea in a shared bathroom and my family.
The point is multiple people sharing facilities get discounts. It’s nothing more sinister than that. The hotel charges per room, and rooms include facilities. The costs for the hotel don’t depend on how many people are staying in that room.
Right, but my point is that you're now no longer complaining about the concept of offering discounts for room-sharing. Now you're complaining that there's no one you would be comfortable sharing a room with.
No; I’m complaining about the alternatives listed.
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.
Airplane travel doesn't mean you actually need to pay for accommodations - visiting friends and family is also a thing.
You could look at it that way, but in practice I don’t actually divide travel costs by the number of people who go.
It comes out of the family budget either way.
kids dont make any income. a weekend trip for 4 in the same timezone costs us $3k to 5k. a cross country trip is 10-20k.
DINK > Solo >> anything else
Hostels are wonderful for single traveling, though. And that's in spite of the fact that hostels also have bulk discounts.
> People will look at this as penalizing single travelers
> A flat fare would bring solo prices down and group rates up so the blended average is the same
So... it is penalizing solo travelers?
Everything hinges on filling the airplane as often as they can. A blend of solo and group travel is probably easier to fill planes. Looking at prices alone is only part of the picture, imo. Group travelers are also more likely to pay for at least 1-2 bags, which brings in some extra $$.
Group travelers also buy assigned seats more often.
To add on to this, the issue in the article is really more about one-way tickets than single passenger, if you buy a round-trip ticket for that flight the difference in price goes away. In fact, a single passenger round-trip ticket that includes the flight in the article is cheaper than buying the one-way ticket on its own (as in, both tickets _together_ are less than the one-way, it's cheaper to buy the round-trip and skip the return flight). Google suggests that one-way tickets get uniquely screwed because they're often used for business-related travel, but I don't really see anything definitive.
You can also get screwed in the other direction where groups are more expensive - airlines will sometimes bump every ticket in a group to a higher fare level even if they still list one or two tickets at a cheaper price for smaller groups.
Sounds like you’re only fine with it because you personally benefit from it.
Or it could just be a certain way of framing things?
But for the benefit of this debate I'll state my bias. Almost all my travel is as a group.
But in most other facets of life, we save by buying more, right? (buying wholesale, buying bulk, etc).
So I've actually had the other feeling... if I'm buying 4 tickets at once, can I get a bit of a volume discount? And I'm not sure that's what the airlines are doing here (I don't ascribe any altruism, it's probably more that families were getting cold feet with increasing prices), but I like that I get some kind of cheaper rate when I'm buying 4x of something, just like in just about every other purchase in life.
> People will look at this as penalizing single travelers and want everyone to have the lowest fare, but that’s not the real alternative. A flat fare would bring solo prices down and group rates up so the blended average is the same.
So it’s still penalizing being single. Single travelers are subsidizing group rates. They are being penalized for not buying multiple. You didn’t explain how it’s not a penalty to buy as one person
This makes no sense.
A solo traveler can decide to take a trip because they saw a good fare very trivially: you're not going on a trip with 2 days notice just because a fare "tipped the scale" when you need 10x the planning and logistics, and the airlines know that.
They're not doing it to entice families to travel, they just know solo travel is associated with higher incomes and want to extract more money.
Bulk discounts don't "penalize" smaller purchases, they reward larger purchases.
Companies offer bulk discounts on basically... everything.
This is like pointing out that the Dollar Store penalizes people for buying small quantities and thus suggesting that Costco should raise prices to "make it fair".
No, it is discrimination based on marital/family status.
If they were willing to sell me 5 flight coupons for a discount, that would be acceptable. There is nothing I can do as an individual to take advantage of the discount.
Nonsense. The airline doesn't ask your marital/family status. They simply offer a bulk discount.
By your logic, Costco is also "discriminating based on marital/family status" by selling bulk at discount. Costco doesn't sell "buy 1/5 a toilet paper package, come back and get the other 4 1/5 later". They sell the whole package up front, use it or lose it.
That's how bulk discounts work.
Heck, you could say that a gallon of milk discriminates against you because you have to pay way more to buy a pint of it, and you can't "come back later for the other pints at the same price".
This is absurdism to the highest degree.
You are welcome to book flights with friends, or even organize a flight-share program and go in on flights with strangers. Bulk doesn't discriminate. I know folks who go in together on Costco bulk because they can't use it all. Make the system work for you.
If it were the same, there would be no motive to do it.
One way or another, this increases profit for them.
That sounds a lot like a subsidy, which I'm generally not a big fan of. Sure you and I benefit from it, but it doesn't seem fair to a solo traveler.
That said, I have to imagine the reasoning behind it having to do with assuming some large percentage of solo travelers are on work expense trips, so squeezing the company for a few more dimes. The article assumes as much -
> It's just another way for airlines to continue “segmenting” their customers, charging business travelers paying with a corporate card more while offering a better deal to families on the exact same flight.
A lot of companies I've worked for don't even do corporate cards, they just tell you to pay for it and submit for reimbursement.
All of that rabble out of the way, it feels like it would be impossible to identify business vs leisure customers up front, so it sounds like solo leisure travelers are caught in the crossfire.
We as a society already penalize people without families:
1. Higher taxes and fewer deductions 2. Higher workplace performance expectations 3. Higher costs in every aspect of life 4. Fewer options eat out, expensive solo tickets at events etc.
This is just one more example in a long list of examples of how being by yourself is penalized in the society.
Yeah I used to think that until I had a family. In reality it's more like:
1. Taxes are more punishing because you're spending half your disposable income on children, and most of it probably comes from one earner. You can say "don't have children if you can't afford it" all you like, but you wouldn't be alive if nobody had children, so it's quite selfish of anyone to be anti-children.
2. For men performance expectations are the same but now you have to somehow simultaneously be at work and also pick up your children from school at 3pm. Oh and don't forget you have to somehow cover like 80 days of school holidays a year. For women... well you can legislate that being off work for 2 years doesn't matter all you want; in reality it is a major disruption to careers.
3. Childcare is far more expensive than any increased cost I experienced for being single, with the possible exception of not being able to share rent with a partner. But once you have children... rent for a family is more than double rent for a one bed flat.
4. Yeah price me up a skiing holiday for a family of 4. Now do it for a single person (and double it if you like).
The very reason that discounted family tickets exist is that families wouldn't buy any tickets otherwise because they would be too expensive. It's the same reason student discounts exist. It's called price discrimination.
I do agree it's pretty annoying and feels unfair though. The optimum group from a price point of view is really a couple, not a family.
> you wouldn't be alive if nobody had children, so it's quite selfish of anyone to be anti-children.
It gets into philosophical territory, but the default "having a pulse = good" thinking is pretty shortsighted IMO. Life is inherently suffering and no one got a yes/no prompt before being born.
While there are people who wish that "yes" was a "no" instead, they form an exceedingly small portion of the general population. Most people are happy they exist.
For a society it's not philosophical. If it wishes to exist past a few decades then it needs children, simple as that. Therefore societies are (and should) be skewed towards that.
I'll ask this in response: why does society need to exist at all?
Obviously ideas like yours are ingrained into us at a biological level and it logically makes sense if we want to survive as a species... but there is no inherent reason other than "just because" right?
Well yeah, because of our ingrained sense of morality & self-preservation. But we're talking about the policies of society so it's kind of pointless discussing them if you don't accept that society should exist in the first place.
Also... it's not society, it's the human species.
It's fairly irrelevant to the discussion. All societies that choose not to exist also choose for all their policies about (not) reinforcing children to not exist.
That's indeed a philosophical question. Should we even exist at all?
It's a strange thing of nature and evolution that it creates a species that can plan and execute its own intentional suicide.
“No children” and “single” isn’t the same, as evidenced by DINKs. That set aside, you’re just confirming that singles are (or should be) penalized.
Yes, that's just a necessity for the persistence of a society. Otherwise there's no point in even organizing as one. I'm not making a value judgment by the way, just an objective statement. I was also once part of a "DINK" and someone who thought would not have children, I have no qualms with that, but there's just no point in prioritizing that segment.
More like it gets into edgy teenager territory.
I think what's more angsty is replies like this. You can't possibly fathom anything other than the default so you fallback to slop like this.
Yes, life can suck and I'm not saying we need to suicide as a species because of that. But, individuals can experience a much larger percentage of suffering than joy. So is it unreasonable to at least consider that possibility rather than going "haha you were brought into this world, suck it up and be happy"?
you get a yes/no prompt every day after you are born though -- and most people keep saying yes until they're ripped out
> Yeah I used to think that until I had a family.
It is amazing how blatantly people will just admit "I agree with politics that benefit me even if they exclude others."
> Taxes are more punishing because you're spending half your disposable income on children
I probably spend on my dogs what you do on your children. Gosh life sure is hard because of my decisions. Where are my discounts and tax refunds?
> It's called price discrimination.
...and when is discrimination ok? Lets all say it out loud.
> dogs
Dogs are not people. Society does not rely on the continued existence of dogs. Do you see any governments enacting policies to make people have more dogs?
> when is discrimination ok?
When it makes things more moral/fair. Do you object to student discounts? Progressive taxes? You seem to be having a knee-jerk reaction to the word "discrimination". It's also called "price differentiation". Maybe that sounds less bad to you?
Who do you think will look after you when you are 70? Who will grow your food, make your car, fly your plane etc?
Is it possible to distinguish between society penalizing being single and society incentivizing having children? Since society's existence requires that people have children (even in the fairly short term, someone younger has to be around to take care of the older folks) it seems reasonable to incentivize it.
I guess it's all relative, lower taxes for A compared to B looks like higher taxes for B compared to A, but I suspect most of this comes from a) incentivizing people to form as many families w/ children as possible and then b) since there are so many families w/ children, people build businesses that assume most people will be in families.
I think even calling it "society incentivizing people to have children" is a bit of a stretch, since in most cases the tax advantages are unlikely to result in a net financial advantage given the financial costs of raising children. In most cases the thought isn't "I'm ambivalent about having children but I will do it for the financial benefits" and rather "I'd like to have children, but it's very expensive, and the tax advantages slightly lessen the expensive."
This has been my experience as well, childcare alone is a pretty big part of my budget. I am definitely not better off financially by having a toddler :D
I still think of it as incentivizing in the same way the EV rebate helped encourage me to buy my first EV, even if the cost of the car still was more than I would have been willing to pay for an ICE car. It made a difficult thing (slightly) less difficult.
Incentivizing doesn't have to mean that the incentive alone makes it worth to have children. It just means that it makes it a better deal than it would have been without the incentives.
Single also differs from being in a childless couple e.g. in your early 20s.
To get on the ladder today, 5 years sharing rent is priceless. Then once you do, you get child benefits. Many people are single late in life too. So I don't think it's something you can equate.
I went to buy tickets to a comedy show last year and they wouldn’t let me buy a single ticket. I had to buy 2. It quite literally doubled the cost, and then a seat went empty.
If someone were to buy 3 tickets, it could just as easily leave an orphaned seat.
I've never run into such a thing across many years. I buy single tickets to Broadway/West End shows a lot of the time and I often land great tickets.
I've seen it twice now, both times within the past couple years. I'm not sure if it is the venue of the performer that imposes it, but it's really bad. To get single tickets, people are basically left to sit and wait for all the other seats to be bought, then hope there are single person gaps they can fill.
how are there less options for people without families to eat out? I'm not following that part
Nicer restaurants often won't accept reservations for solo diners, leaving them to come at off-hours or eat at the bar.
Obviously that's a pure economic thing you can't get mad at as tables are designed for 2+ and you're trying to get in during a high traffic time.
You can’t eat out alone everywhere
This is extremely uncommon in my experience, to the point where I've really only heard of it happening secondhand. I've seen people eating alone everywhere from fast food to Michelin star restaurants and done it myself many times. Where have you seen it?
In my experience as well, never been denied dining. But... maybe different parts of the world have different customs.
I’ve eaten alone in hundreds of places in dozens of countries, not sure where these mythical places are.
"Table for one" is nearly always accommodated. Bringing a family of 4 or 5 out, and you're much more likely to be denied, or to suffer a long wait.
And, in fact, if there's a bar where they serve food that makes it even easier.
I mean, you almost always can? During COVID, there was a certain degree of reservations required--min 2 people. But it's pretty darned rare. And I say this as someone who has eaten out solo many hundreds of times. (And tend to eat at fairly decent restaurants.)
OTOH when you retire those other people's kids will be powering the economy that will be financing your pension.
It's not even retirement.
When a 25-year-old lands a senior role in 10 years at 35, it's because someone else's 13-year-old grew up, graduated college, and got hired as a junior. Promotions are 10% Crushing It, 90% dumping your grunt work on some poor sap too young to know better.
Society is a pyramid scheme, and, like all pyramid schemes, bringing more people in is ultimately more valuable than actually selling the LuLaRoe or whatever.
This makes sense because a healthy society needs families, especially young ones who can still make healthy children.
> Higher costs in every aspect of life
...except for the average $300,000 cost of raising a child in the US. That one would seem to rather balance out all those others.
That argument only makes sense if you see no inherent value in the child.
> blended average
...is of course great when you personally are on the side benefitting.
In other news, gas stations are selling individual cigarettes for $0.50 each
Apparently the article author hasn't heard about the concept of a "group discount"
The point is that the extent of the group discount is absurd. E.g., the ORD-LEX one, $214 for a single ticket, and then only $1 more for a second one.
I’ve been pricing tickets for a family trip recently and I have not seen anything that extreme.
That’s definitely a cherry picked example for the article, not the common scenario.
Yeah, typically groups pay more per ticket than individuals.
This is probably only on unpopular routes where they know they aren't going to fill the plane.
If you read the article than you'd understand it's about degree of discount to which two or more passengers are receiving. In some cases two tickets is almost as cheap as one ticket. If these prices converge it would actually make sense to buy two tickets for one traveler if you value comfort and can afford it.
Although in this case you actually have to be accompanied by another adult
Part of what makes it seem shady here is that airline ticket prices are pretty opaque. If they advertised it as a group discount, it would be received differently.
Airline pricing in general is pretty opaque. Not hospital pricing opaque, but still pretty opaque. It's one of the few things we regularly purchase where the price changes almost daily (both up and down). For example, bus and train tickets are pretty much the same price each day for the same route. For airlines, I'll often check the price on some future night to see if it is cheaper or not.
Like medicine, the price is a negotiation point in a complex web of probabilities. Air travel can be more transparent because the probability network is simpler and the spread is narrower, but they’re both dealing with realities of providing predictable service under volatile demand and group payer conditions.
Distance train at least may (or may not depending on location/country) be quite a bit cheaper for advance purchase but maybe doesn't fluctuate as much day to day.
Maybe even if it was a possibility before, it wasn't used and now airlines have enough data and market power to actually make different prices for groups
(By the way, if it's about inflating prices for individual, then it's not really volume discounting... it just appears this way on the outside)
Is volume-based discounts really that surprising?
Airlines need to be regulated and treated like public utility which is exactly what they are.
No they aren't. Public utilities generally give you only one choice of provider, which is why they need to be regulated because of their monopoly status.
When you fly, you usually have a choice between lots of airlines. So there's nothing "public utility" about it whatsoever.
Airports, on the other hand, are considered public infrastructure. There are also sometimes routes that are only served by one airline, which are sometimes regulated accordingly. But that isn't the general case, nor should it be.
Taxi companies, moving companies, and rideshare are all considered utilities and there are generally multiple choices of provider. Being a monopoly is not a requirement to be a utility.
None of those are generally considered to be public utilities.
Public utilities include things like electricity, power, gas, sometimes telecoms. Being a monopoly is an inherent part of it.
I don’t follow your logic.
Well I can't help you if you don't say which part you don't follow.
I think the governments only role is to guarantee the planes don’t fall out of the sky or crash into each other, and then the airlines can price compete.