4 ms·

A bit of math: “No carry-on fees” simply means everyone pays carry-on fees

5 points by mwsherman 17y ago

pedalpete 17y ago
Maybe you know more about the airline industry than I do, but I disagree that ' airlines like to break out fees is so that they can offer a lower base ticket price'. Airlines didn't lower the cost of tickets when they started charging for checked luggage. They started charging to increase revenue. Your ticket price didn't decrease when airlines stopped serving meals, they just used the cost savings to reduce operating costs. Let's not confuse competitive pricing with cost based price reductions. They are two different things. Further more, you mention a person 'taking up more room in the cabin' should cost more. Well, I weigh less than the average American who the ticket price is charged for. Should I pay less as it costs less fuel, I take up less space, I move faster than the larger person sitting to my left?
dasht 17y ago
I disagree with the analysis: Of necessity, airlines enjoy small, government-granted oligopolies on various routes. That is to say that passenger air travel bandwidth along various routes is finite and heavily regulated. The public (via the government) allocates and rations that bandwidth among the carriers. (That is why airlines are in the regulatory category of "common carriers".) Because of those oligopolies, and in some cases de facto monopolies, airlines are in a unique position to price gouge and to use discriminatory pricing. Charging for carry-ons, which are vital to many kinds of travel, easily has the potential to be an example of gouging with discriminatory effect. For example, one can easily imagine a scenario wherein travel becomes hugely less expensive for BigBig Inc. (who can negotiate a big discount on carry-ons with their purchasing leverage) than it is for Ma-n-Pa LLC. At the end of the slippery slope, the oligopoly power of the airlines would translate into an oligopoly of consumption, at which point the public's interest in granting these routes to airlines has been corrupted. Yes, even without carry-on fees BigBig Inc. still has purchasing leverage but common carriers are regulated so as to limit the size of that price discrimination. The situation could be compared to another kind of common carrier: providers of land-line telephone service. They too are granted monopolies and oligopolies in various markets (out of a historical engineering necessity). The regulations permit them to gouge and discriminate with fees for features that are deemed inessential - such as call-waiting or caller-id reporting. At the same time service deemed essential, such as basic "life-line" service, are price-controlled legislatively (on the theory that the right-of-ways granted to the phone companies, such as the use of utility poles, ultimately require a license from the public).

5 points by mwsherman 17y ago

Maybe you know more about the airline industry than I do, but I disagree that ' airlines like to break out fees is so that they can offer a lower base ticket price'. Airlines didn't lower the cost of tickets when they started charging for checked luggage. They started charging to increase revenue. Your ticket price didn't decrease when airlines stopped serving meals, they just used the cost savings to reduce operating costs. Let's not confuse competitive pricing with cost based price reductions. They are two different things. Further more, you mention a person 'taking up more room in the cabin' should cost more. Well, I weigh less than the average American who the ticket price is charged for. Should I pay less as it costs less fuel, I take up less space, I move faster than the larger person sitting to my left?

dasht 17y ago

I disagree with the analysis: Of necessity, airlines enjoy small, government-granted oligopolies on various routes. That is to say that passenger air travel bandwidth along various routes is finite and heavily regulated. The public (via the government) allocates and rations that bandwidth among the carriers. (That is why airlines are in the regulatory category of "common carriers".) Because of those oligopolies, and in some cases de facto monopolies, airlines are in a unique position to price gouge and to use discriminatory pricing. Charging for carry-ons, which are vital to many kinds of travel, easily has the potential to be an example of gouging with discriminatory effect. For example, one can easily imagine a scenario wherein travel becomes hugely less expensive for BigBig Inc. (who can negotiate a big discount on carry-ons with their purchasing leverage) than it is for Ma-n-Pa LLC. At the end of the slippery slope, the oligopoly power of the airlines would translate into an oligopoly of consumption, at which point the public's interest in granting these routes to airlines has been corrupted. Yes, even without carry-on fees BigBig Inc. still has purchasing leverage but common carriers are regulated so as to limit the size of that price discrimination. The situation could be compared to another kind of common carrier: providers of land-line telephone service. They too are granted monopolies and oligopolies in various markets (out of a historical engineering necessity). The regulations permit them to gouge and discriminate with fees for features that are deemed inessential - such as call-waiting or caller-id reporting. At the same time service deemed essential, such as basic "life-line" service, are price-controlled legislatively (on the theory that the right-of-ways granted to the phone companies, such as the use of utility poles, ultimately require a license from the public).