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The argument has some holes. First, the conclusion that baggage fees are a good deal doesn't follow since the baggage fee shortfall is accounted for in the pri
by dwg 11y ago
The argument has some holes.
First, the conclusion that baggage fees are a good deal doesn't follow since the baggage fee shortfall is accounted for in the price of the ticket. A more valid conclusion is that travelers who don't check bags are subsidizing travelers who do.
Second, opportunity cost is used to conclude that the fees are a good deal. However, most travelers won't travel without baggage and since baggage fees we're most likely just a way to raise prices without raising the ticket price per se, it's a wash.
I suppose it would be different if the article made a case for cheaper, carry-on only flights which sell the cargo space for shipping. Does something like this exist? Seems to be a good business opportunity if not.
- pedalpete 11y agoAgree, just because you are using an asset (the travelling space) and charging two different prices for it, doesn't mean one is getting it cheap. When bookstores started putting coffee shops in them, the coffee shop only took a small portion of the bookstores footprint. Though the revenue per square foot was larger for the coffee shop, they don't just say 'we should charge more per book because of the revenue difference to the rev/sqft in the coffee shop. Seriously flawed logic.
- danwyd 11y agoThe point is that there's a serious opportunity cost. By prioritizing customer service (to some degree), airlines can't charge sell space to businesses moving cargo for a higher margin. The coffee shop argument doesn't really work because you can't keep scaling it. At a certain point people want space for books. But given that there's a space shortage on international flights, there's probably room for airlines to make more money by charging for freight instead of taking your luggage.