4 ms·

So people should have to buy more expensive services, bundled in a way they don't like, want or need, just so others can have the price for those services hidde

So people should have to buy more expensive services, bundled in a way they don't like, want or need, just so others can have the price for those services hidden in the overall price? Why? If somebody wants to carry a lot of luggage on, or eat a bunch of in-flight meals, that's fine. Doesn't mean they get to demand that these things be included always, for everybody. We could demand that complimentary champagne and cheesecake be included in a flight; that doesn't mean that it wouldn't cost money or that people who didn't want it wouldn't be paying for the people who do. It doesn't help people, especially those with less money, to demand that only comprehensive and luxurious services be available.

whiddershins 10y ago
Are you replying only to the comment, or to the article as well? Because the article makes the point that these basic fares are simply a way to increase prices. As for your reaction to the comment: you make really great points while maybe neglecting to acknowledge that many services are cheaper at scale. So by providing them to everyone as part of a bundle, the overall cost is way lower for everyone. The iPhone might be a great example of this.
- snrplfth 10y ago
  I was responding to both. I simply do not agree with the idea that, if they were required to bundle these services together at some set level of service, that this would somehow make airlines unable to increase the prices. What I suggest is happening here is that the airlines would have increased their bundled prices, but aware of how price-sensitive flyers are, and how many of them are willing to forgo extra services, they've decided to unbundle instead. I mean, what's stopping them from just raising prices for bundled services? Nothing, besides competition. The fact that these services can be paid for separately is not some way for them to "get you" somehow, it's just unbundling. Yes, there's theoretically economies of scale for some things. But there's also a lot of potential advantages to pricing specific services - especially for things like luggage, where capacity per passenger often has hard limits. If there really are economies of scale, I suspect the airlines themselves will find them more effectively than blanket regulations requiring a particular service level. How is the iPhone an example?
  - dagenleg 10y ago
    The reply by "whiddershins" is spot on, but I will elaborate a bit. The first point is that you are very quick to label all paid services as "luxury". Sure, champagne is a luxury, but what the companies are doing is taking what used to be a "normal" service, stripping it of anything they can think of and declaring it the new "normal" and all those stripped thing a "luxury". I don't think being able to sit without discomfort or choose a seat is really a "luxury". Regarding the example he gave - I am not sure how the IPhone applies, but I think another example would be the healthcare. When everyone pays for his own healthcare through a system of private insurers you get the horror that is American healthcare. When people just pay taxes, which collectively pay for medical expenses you get Western European system.
    - notheguyouthink 10y ago
      I mean, it's all luxury as far as i'm concerned - and in the right of the provider to decide on packages. If they want to offer terrible seating for not-cheaper prices, let them - the market (consumers) should be able to decide not to use them. This is a very different argument to me than healthcare though. In my world view, healthcare and education have widespread, socially beneficial properties. I pay my local taxes to fund a highschool that i don't have kids in, because i don't want morons in the work force next year. Likewise, i want to pay more taxes for healthy educated people in the work force, because i feel it benefits me. This is very different than how much an airline is charging for their service. An airline is no different than a hotdog vendor to me, and they should be able to charge whatever they want for their services. Granted, i will admit that there is a bit of a slippery slope - a good example being Comcast. I loathe Comcast's business practices because we (many of us) feel trapped by them, as we only have one choice, due to the difficult nature of laying pipes. Same goes for airlines i imagine. If all airlines started to gouge us, many people can't simply drive instead - so clearly some regulation is needed in the case of airlines that the hotdog vendor doesn't have to worry about.
    - snrplfth 10y ago
      I am not labelling all paid services as luxuries. But some are, and different people will consider different things luxuries. I mean, what is discomfort? (Should seats be leather, say? Should they recline? How far?) How much is choosing a seat worth? Some people really like an aisle, some like a window, some don't care. When you decide that a particular service is required to be included, you're saying that people that don't want it will have to pay for it anyways. I don't see why that is the default argument that doesn't have to be defended, while not having to pay for something you don't want is the idea that has a high burden of argument. The heart of the argument made in the article is that somehow, by unbundling services that were bundled, airlines are somehow able to raise prices above what they were otherwise able to do. I don't think that's true at all. I mean, I sure like a pop and a box of chocolate-covered raisins when I go to the movies. Therefore I demand that all movie tickets include food. I like to watch streaming videos on my phone. Therefore I demand that all phone plans include unlimited data. I like big comfortable seats and laptop plugs when I travel on the inter-city train. Therefore I demand that municipal buses include these things. You see where this goes? And US healthcare is totally not the same. Firstly, the majority of US healthcare expenditures are tax-funded, about 65%, mostly through Medicare, Medicaid, tax subsidies and other programs. Secondly, it is effectively cartelized by the government, through incentives that make it extremely tax-advantageous to get healthcare through employers, to limits on the training and numbers of doctors that drive up prices, to now, a system of exchanges that require that people purchase insurance from approved insurers at government-set prices. It is so, so incredibly far from "everyone pays for his own healthcare through a system of private insurers".
- pc86 10y ago
  > Because the article makes the point that these basic fares are simply a way to increase prices. That's not inherently a bad thing. Companies are allowed to raise prices. If the prices are noncompetitive, then people will choose other carriers. Flight is not a right, nor is flight at a given price point. If there is room for cheaper airlines to capture fares at $300 while AA/DL/etc are charging $350, they will do so.

whiddershins 10y ago

Are you replying only to the comment, or to the article as well? Because the article makes the point that these basic fares are simply a way to increase prices. As for your reaction to the comment: you make really great points while maybe neglecting to acknowledge that many services are cheaper at scale. So by providing them to everyone as part of a bundle, the overall cost is way lower for everyone. The iPhone might be a great example of this.

snrplfth 10y ago
I was responding to both. I simply do not agree with the idea that, if they were required to bundle these services together at some set level of service, that this would somehow make airlines unable to increase the prices. What I suggest is happening here is that the airlines would have increased their bundled prices, but aware of how price-sensitive flyers are, and how many of them are willing to forgo extra services, they've decided to unbundle instead. I mean, what's stopping them from just raising prices for bundled services? Nothing, besides competition. The fact that these services can be paid for separately is not some way for them to "get you" somehow, it's just unbundling. Yes, there's theoretically economies of scale for some things. But there's also a lot of potential advantages to pricing specific services - especially for things like luggage, where capacity per passenger often has hard limits. If there really are economies of scale, I suspect the airlines themselves will find them more effectively than blanket regulations requiring a particular service level. How is the iPhone an example?
- dagenleg 10y ago
  The reply by "whiddershins" is spot on, but I will elaborate a bit. The first point is that you are very quick to label all paid services as "luxury". Sure, champagne is a luxury, but what the companies are doing is taking what used to be a "normal" service, stripping it of anything they can think of and declaring it the new "normal" and all those stripped thing a "luxury". I don't think being able to sit without discomfort or choose a seat is really a "luxury". Regarding the example he gave - I am not sure how the IPhone applies, but I think another example would be the healthcare. When everyone pays for his own healthcare through a system of private insurers you get the horror that is American healthcare. When people just pay taxes, which collectively pay for medical expenses you get Western European system.
  - notheguyouthink 10y ago
    I mean, it's all luxury as far as i'm concerned - and in the right of the provider to decide on packages. If they want to offer terrible seating for not-cheaper prices, let them - the market (consumers) should be able to decide not to use them. This is a very different argument to me than healthcare though. In my world view, healthcare and education have widespread, socially beneficial properties. I pay my local taxes to fund a highschool that i don't have kids in, because i don't want morons in the work force next year. Likewise, i want to pay more taxes for healthy educated people in the work force, because i feel it benefits me. This is very different than how much an airline is charging for their service. An airline is no different than a hotdog vendor to me, and they should be able to charge whatever they want for their services. Granted, i will admit that there is a bit of a slippery slope - a good example being Comcast. I loathe Comcast's business practices because we (many of us) feel trapped by them, as we only have one choice, due to the difficult nature of laying pipes. Same goes for airlines i imagine. If all airlines started to gouge us, many people can't simply drive instead - so clearly some regulation is needed in the case of airlines that the hotdog vendor doesn't have to worry about.
  - snrplfth 10y ago
    I am not labelling all paid services as luxuries. But some are, and different people will consider different things luxuries. I mean, what is discomfort? (Should seats be leather, say? Should they recline? How far?) How much is choosing a seat worth? Some people really like an aisle, some like a window, some don't care. When you decide that a particular service is required to be included, you're saying that people that don't want it will have to pay for it anyways. I don't see why that is the default argument that doesn't have to be defended, while not having to pay for something you don't want is the idea that has a high burden of argument. The heart of the argument made in the article is that somehow, by unbundling services that were bundled, airlines are somehow able to raise prices above what they were otherwise able to do. I don't think that's true at all. I mean, I sure like a pop and a box of chocolate-covered raisins when I go to the movies. Therefore I demand that all movie tickets include food. I like to watch streaming videos on my phone. Therefore I demand that all phone plans include unlimited data. I like big comfortable seats and laptop plugs when I travel on the inter-city train. Therefore I demand that municipal buses include these things. You see where this goes? And US healthcare is totally not the same. Firstly, the majority of US healthcare expenditures are tax-funded, about 65%, mostly through Medicare, Medicaid, tax subsidies and other programs. Secondly, it is effectively cartelized by the government, through incentives that make it extremely tax-advantageous to get healthcare through employers, to limits on the training and numbers of doctors that drive up prices, to now, a system of exchanges that require that people purchase insurance from approved insurers at government-set prices. It is so, so incredibly far from "everyone pays for his own healthcare through a system of private insurers".
pc86 10y ago
> Because the article makes the point that these basic fares are simply a way to increase prices. That's not inherently a bad thing. Companies are allowed to raise prices. If the prices are noncompetitive, then people will choose other carriers. Flight is not a right, nor is flight at a given price point. If there is room for cheaper airlines to capture fares at $300 while AA/DL/etc are charging $350, they will do so.