7 ms·

If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fa

If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares. Consider the success of airlines like Ryanair which charges for every possible amenity and slight convenience. United Airlines has largely been the laggard in the industry in the past 5 years even though their stock price has risen 200%, that is 50% less than their peers like Delta and Alaska Air group who have risen closer to 400% in the same time period. If flying the friendly skies took them into bankruptcy, what could they have done that would've kept them afloat while maintaining a "regulated" carrier status?

kelnos 10y ago
This is the thing that always bothers me. By _far_, when (at least US domestic) travelers book flights, their main and often only consideration is ticket price. People claim to be annoyed by baggage fees, not being able to select their seat ahead of time, no or limited food, paid in-flight entertainment, overselling, etc., but they refuse to vote with their wallets and pay more for better service. We've made this bed, and now we're apparently pissed that we have to lie in it.
- willvarfar 10y ago
  United also threw off a $1000 ticket first-classer this week: http://losangeles.cbslocal.com/2017/04/11/another-passenger-complains-of-alleged-mistreatment-by-united-airlines/ http://losangeles.cbslocal.com/2017/04/11/another-passenger-... They alienate those who are not considering the ticket price too.
  - Hydraulix989 10y ago
    I've been demoted from first class before during boarding, but that's because I snatched the upgrade for $50 during same day check-in.
- wvenable 10y ago
  The real problem is that the pricing is so complicated that it's almost impossible to pay more for better service. In my last flight, I would have paid to select my seats if it was reasonable but there wasn't any to actually do that which didn't cost a disproportionately huge amount and wasn't bundled with other perks. When flights have a 50% swing in pricing for seats without any add-ons -- who knows what's going on.
- farzadb82 10y ago
  I feel that part of the problem here is that booking sites don't tend to be fully transparent on how much any given flight really costs, beyond the initial ticketing cost. Extra costs are typically hidden and the UX is optimized for finding the cheapest possible ticket price, ignoring fees and overhead. Tangentially, in some ways, its a fact of reality in the US that the price you see will almost never be the price you pay, which is generally higher. Americans seem to accept this as a norm and it still baffles me even after 17 years.
- panzagl 10y ago
  I'd blame corporate purchasers who blindly enforce lowest price policies over the actual flyer. United has figured out how to save my employer money by sacrificing my comfort and convenience.
- fefzero 10y ago
  The bar for basic service has dropped so far that you are no longer treated like a person if you don't pay for the extras. My wife and I saved up for a resort trip for our ten year anniversary only to find that our 4-hour flight included a seat without enough leg room for me to sit while the person in front of me reclined into my lap (I'm 6'2"). The passenger in front of me wanted to stay reclined and the flight attendant could only offer me a seat upgrade to sit by myself in a section with more leg room. Not my only bad experience with them but United was far worse than any other recent trip I've had. We're pissed because they set the bar so low we have to trip on it. Those of us who don't fly often have no idea how bad it's gotten compared to how things used to be.
  - fefzero 10y ago
    This about sums it up for me: "Nor does United seem better for its employees, who used to own the airline, but are now stuck enforcing cruel and arbitrary rules, and assessing the punitive fees. They are cast as wardens, trying to keep unruly passengers in line."
  - Hydraulix989 10y ago
    That's an experience that isn't really unique to United though, the major carriers all have nearly the same legroom (+/- 1"). As a 6'1" passenger, I can tell you that your claim that you "couldn't sit" while the passenger in front of you was fully reclined is a gross exaggeration. Sure, I empathize with you that it was uncomfortable, and rest assured, you were paying an extremely bargained price for your airfare. Basic economics also comes into play here: There are Economy Plus seats if you want a more luxurious amount of legroom.
    - douche 10y ago
      The really fun times are when your shoulders are wider than the seat is, and you're in an aisle seat. Every time the drink cart goes by or someone heads for the bathroom, you get trucked. I'm just waiting for the natural evolution of this system, where everyone takes their seat, and knock-out gas is piped in.
- ghaff 10y ago
  Exactly. As a mostly business traveler, I'd be delighted if there were no options other than business class service with champagne and caviar for dinner. (OK, I generally prefer beer and I'm not a huge caviar fan but the principle still applies.) But most people traveling for personal reasons (and many traveling on business) choose or are required to choose the rock bottom price which results in not only stripped down amenities but also a general focus on cutting operational costs to the bone. Furthermore, the big legacy carriers are still generally more attractive to regular business travelers because of their loyalty programs which insulate them from at least some of the worst aspects brought on by competition on price. (In that they get a somewhat better class of service without paying for it directly.)
oconnore 10y ago
> If we as consumers are voting with our wallets The article discusses how the Justice department approved a series of mergers between the major carriers that significantly reduced consumer choice. It's funny that this "vote with your wallet", "capitalism at work" rhetoric never finds fault with these near-monopolies. You can't have it both ways: either the justice department needs to do its job splitting up big business to preserve competition and consumer choice, or we need to regulate the market so that consumers are treated fairly despite their lack of choice.
- yock 10y ago
  You can't talk about busting up near-monopolies without first considering the market environment which created those near-monopolies. I don't see too many people asking how we got here in the first place. Without those questions (for which I have no answers) we're doomed to end right back up here.
  - oconnore 10y ago
    The whole point of capitalism is that you solve those problems from the bottom up, not from the top down. Pick one.
    - Thrymr 10y ago
      Are you confusing the free market with capitalism here? Capital is striving to destroy competition; in a truly free market, consumers will counterbalance that if it is not in their interest (e.g. favor smaller airlines that give better service).
      - droopyEyelids 10y ago
        How could consumers possibly counterbalance a monopoly? The whole point of a monopoly is that you remove choice from the consumers while creating barriers to the entry of competition.
    - deleted 10y ago
      [deleted]
acchow 10y ago
like Ryanair which charges for every possible amenity and slight convenience. We've decided we like price discrimination (why charge every ticketholder for a bag of pretzels when we can charge only those that want it instead?). But we don't like violence or aggression. I think the "new norm" of low-cast airfare we like is the price discrimination - not the violence.
- tyingq 10y ago
  A little more is coming out about how violent it was: "The man who was dragged off a United Airlines flight suffered a broken nose and concussion and lost two front teeth" http://www.latimes.com/business/la-fi-live-stream-david-dao-presser-20170413-story.html http://www.latimes.com/business/la-fi-live-stream-david-dao-... And the United CEO seems to have finally clued into the right message: "We are not going to put a law enforcement official to take them off," Munoz told ABC's "Good Morning America" on Wednesday. "To remove a booked, paid, seated passenger -- we can't do that."
mnglkhn2 10y ago
As per Matt Levine's newsletter on Bloomberg: " ... According to Bloomberg, four of United's top five shareholders are also top-five holders of American. Three of them are also top-five holders of Delta Air Lines Inc. United's top 10 holders own about 49.8 percent of United Stock between them -- and about 51.6 percent of American and 37.6 percent of Delta. American was up 3.8 percent yesterday. ... " As you can see, boycotting does not necessarily improve things. Just shifts them around a bit.
- tyingq 10y ago
  I think this particular incident will help, if only solely for the procedures around deplaning already seated passengers. Needs more analysis, but it sounds like the airlines are somewhat limited in invoking "interference with crew members" as a threat, since the door isn't yet closed. At a minimum, they're aware now of the potential PR backlash.
  - wccrawford 10y ago
    Sure, the same people get the money in the end, but if one of their 4-5 nearly-identical businesses takes a serious hit, and the others grow, then they're learned what the market is serious about.
    - tyingq 10y ago
      It's less money for them regardless of which business, because they'll have to actually offer compelling compensation for overbooking. That's assuming this ends in this passengers favor. If that happens, and the average traveler knows that saying "No, thank you" is an option for deplaning...well. Edit: Betting Congress will also soon raise the current $1350 limit per ticket on denied boarding. They love to find ways to seem like heroes.
- notahacker 10y ago
  I bet United's management don't hold stock in American or Delta...
dragonwriter 10y ago
> If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares. I think that's not true either; the ability to readily compare fares has led to opacity in pricing by moving a growing and shifting (and inconsistent among carriers) set of services out of the base ticket price into separately charged services. Interpreting market behavior as revealed preference assumes all the classical ideal market situations, including perfect information, which is particularly silly when the supposed revealed preference is for a status quo with deliberate selective opacity of key information.
skrebbel 10y ago
> Ryanair I'm not sure this comparison flies. You can say a lot of bad things about Ryanair, but in some respects they treat customers better than many airlines. Yes, they charge for everything, but as a Ryanair customer you expect that. Yes, the Dark Patterns on their website are inexcusable. At the same time, Ryanair doesn't overbook flights (they claim the hassle costs more than an empty seat). Ryanair has a pretty good on-time track records (partly due to underpromising, but still). Back on topic, Ryanair doesn't violently remove passengers from planes. Here in Europe we usually have 2 options: - Fly Ryanair/EasyJet/etc, pay to sneeze, but get from A to B - Fly BA/KLM/Lufthansa etc, free soda hooray, *maybe* get from A to B If I go on holiday I'm fine with BA as well. Free booze is nice and I'll survive the free hotel if they overbook me. No need to violently drag me off. But if I need to be somewhere at a certain time, I'll endure the crammed seats and pick Ryanair without a thought.
bogomipz 10y ago
>"If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares." The consolidation of the airline industry and resulting lack of choices in the US has made voting with your wallets quite ineffective. Airline's have been practicing something called "capacity discipline" that ensures that reduces the number of flights and ensures that planes are always nearly full. Where are you seeing these "ever lower" fares? US airlines are flying fewer flights and certainly fewer direct flights these days in a practice called "capacity discipline" which is designed to make sure the planes are as full as possible. The fares on a fuller flight tend to be more expensive than fares on empty flight. Also the reason why Ryan Air is so successful is not because they charge for every possible amenity but rather they have the cheapest labor costs in the industry Labor - 6€ per passenger [1] see the section"Operating Model: Execution": [1] https://rctom.hbs.org/submission/ryanair-the-lowest-cost-airline-in-europe/ https://rctom.hbs.org/submission/ryanair-the-lowest-cost-air...
seanp2k2 10y ago
More on airlines as an oligopoly enabling the poor treatment of customers with little consequence: http://fusion.net/airlines-can-treat-you-like-garbage-because-they-are-an-1794192270/amp http://fusion.net/airlines-can-treat-you-like-garbage-becaus...
charlieflowers 10y ago
But we are (I hope) voting with our wallets. We want low fares and decent treatment. The corps found it easier to lower fares than to achieve decent treatment. They failed to understand our votes. United is about to learn (when they shut their doors, I hope) that decent treatment was very important all along, and they screwed up badly by neglecting it. They got away with it for a while, but not anymore.

kelnos 10y ago

This is the thing that always bothers me. By _far_, when (at least US domestic) travelers book flights, their main and often only consideration is ticket price. People claim to be annoyed by baggage fees, not being able to select their seat ahead of time, no or limited food, paid in-flight entertainment, overselling, etc., but they refuse to vote with their wallets and pay more for better service. We've made this bed, and now we're apparently pissed that we have to lie in it.

willvarfar 10y ago
United also threw off a $1000 ticket first-classer this week: http://losangeles.cbslocal.com/2017/04/11/another-passenger-complains-of-alleged-mistreatment-by-united-airlines/ http://losangeles.cbslocal.com/2017/04/11/another-passenger-... They alienate those who are not considering the ticket price too.
- Hydraulix989 10y ago
  I've been demoted from first class before during boarding, but that's because I snatched the upgrade for $50 during same day check-in.
wvenable 10y ago
The real problem is that the pricing is so complicated that it's almost impossible to pay more for better service. In my last flight, I would have paid to select my seats if it was reasonable but there wasn't any to actually do that which didn't cost a disproportionately huge amount and wasn't bundled with other perks. When flights have a 50% swing in pricing for seats without any add-ons -- who knows what's going on.
farzadb82 10y ago
I feel that part of the problem here is that booking sites don't tend to be fully transparent on how much any given flight really costs, beyond the initial ticketing cost. Extra costs are typically hidden and the UX is optimized for finding the cheapest possible ticket price, ignoring fees and overhead. Tangentially, in some ways, its a fact of reality in the US that the price you see will almost never be the price you pay, which is generally higher. Americans seem to accept this as a norm and it still baffles me even after 17 years.
panzagl 10y ago
I'd blame corporate purchasers who blindly enforce lowest price policies over the actual flyer. United has figured out how to save my employer money by sacrificing my comfort and convenience.
fefzero 10y ago
The bar for basic service has dropped so far that you are no longer treated like a person if you don't pay for the extras. My wife and I saved up for a resort trip for our ten year anniversary only to find that our 4-hour flight included a seat without enough leg room for me to sit while the person in front of me reclined into my lap (I'm 6'2"). The passenger in front of me wanted to stay reclined and the flight attendant could only offer me a seat upgrade to sit by myself in a section with more leg room. Not my only bad experience with them but United was far worse than any other recent trip I've had. We're pissed because they set the bar so low we have to trip on it. Those of us who don't fly often have no idea how bad it's gotten compared to how things used to be.
- fefzero 10y ago
  This about sums it up for me: "Nor does United seem better for its employees, who used to own the airline, but are now stuck enforcing cruel and arbitrary rules, and assessing the punitive fees. They are cast as wardens, trying to keep unruly passengers in line."
- Hydraulix989 10y ago
  That's an experience that isn't really unique to United though, the major carriers all have nearly the same legroom (+/- 1"). As a 6'1" passenger, I can tell you that your claim that you "couldn't sit" while the passenger in front of you was fully reclined is a gross exaggeration. Sure, I empathize with you that it was uncomfortable, and rest assured, you were paying an extremely bargained price for your airfare. Basic economics also comes into play here: There are Economy Plus seats if you want a more luxurious amount of legroom.
  - douche 10y ago
    The really fun times are when your shoulders are wider than the seat is, and you're in an aisle seat. Every time the drink cart goes by or someone heads for the bathroom, you get trucked. I'm just waiting for the natural evolution of this system, where everyone takes their seat, and knock-out gas is piped in.
ghaff 10y ago
Exactly. As a mostly business traveler, I'd be delighted if there were no options other than business class service with champagne and caviar for dinner. (OK, I generally prefer beer and I'm not a huge caviar fan but the principle still applies.) But most people traveling for personal reasons (and many traveling on business) choose or are required to choose the rock bottom price which results in not only stripped down amenities but also a general focus on cutting operational costs to the bone. Furthermore, the big legacy carriers are still generally more attractive to regular business travelers because of their loyalty programs which insulate them from at least some of the worst aspects brought on by competition on price. (In that they get a somewhat better class of service without paying for it directly.)

oconnore 10y ago

> If we as consumers are voting with our wallets The article discusses how the Justice department approved a series of mergers between the major carriers that significantly reduced consumer choice. It's funny that this "vote with your wallet", "capitalism at work" rhetoric never finds fault with these near-monopolies. You can't have it both ways: either the justice department needs to do its job splitting up big business to preserve competition and consumer choice, or we need to regulate the market so that consumers are treated fairly despite their lack of choice.

yock 10y ago
You can't talk about busting up near-monopolies without first considering the market environment which created those near-monopolies. I don't see too many people asking how we got here in the first place. Without those questions (for which I have no answers) we're doomed to end right back up here.
- oconnore 10y ago
  The whole point of capitalism is that you solve those problems from the bottom up, not from the top down. Pick one.
  - Thrymr 10y ago
    Are you confusing the free market with capitalism here? Capital is striving to destroy competition; in a truly free market, consumers will counterbalance that if it is not in their interest (e.g. favor smaller airlines that give better service).
    - droopyEyelids 10y ago
      How could consumers possibly counterbalance a monopoly? The whole point of a monopoly is that you remove choice from the consumers while creating barriers to the entry of competition.
  - deleted 10y ago
    [deleted]

acchow 10y ago

like Ryanair which charges for every possible amenity and slight convenience. We've decided we like price discrimination (why charge every ticketholder for a bag of pretzels when we can charge only those that want it instead?). But we don't like violence or aggression. I think the "new norm" of low-cast airfare we like is the price discrimination - not the violence.

tyingq 10y ago
A little more is coming out about how violent it was: "The man who was dragged off a United Airlines flight suffered a broken nose and concussion and lost two front teeth" http://www.latimes.com/business/la-fi-live-stream-david-dao-presser-20170413-story.html http://www.latimes.com/business/la-fi-live-stream-david-dao-... And the United CEO seems to have finally clued into the right message: "We are not going to put a law enforcement official to take them off," Munoz told ABC's "Good Morning America" on Wednesday. "To remove a booked, paid, seated passenger -- we can't do that."

mnglkhn2 10y ago

As per Matt Levine's newsletter on Bloomberg: " ... According to Bloomberg, four of United's top five shareholders are also top-five holders of American. Three of them are also top-five holders of Delta Air Lines Inc. United's top 10 holders own about 49.8 percent of United Stock between them -- and about 51.6 percent of American and 37.6 percent of Delta. American was up 3.8 percent yesterday. ... " As you can see, boycotting does not necessarily improve things. Just shifts them around a bit.

tyingq 10y ago
I think this particular incident will help, if only solely for the procedures around deplaning already seated passengers. Needs more analysis, but it sounds like the airlines are somewhat limited in invoking "interference with crew members" as a threat, since the door isn't yet closed. At a minimum, they're aware now of the potential PR backlash.
- wccrawford 10y ago
  Sure, the same people get the money in the end, but if one of their 4-5 nearly-identical businesses takes a serious hit, and the others grow, then they're learned what the market is serious about.
  - tyingq 10y ago
    It's less money for them regardless of which business, because they'll have to actually offer compelling compensation for overbooking. That's assuming this ends in this passengers favor. If that happens, and the average traveler knows that saying "No, thank you" is an option for deplaning...well. Edit: Betting Congress will also soon raise the current $1350 limit per ticket on denied boarding. They love to find ways to seem like heroes.
notahacker 10y ago
I bet United's management don't hold stock in American or Delta...

dragonwriter 10y ago

> If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares. I think that's not true either; the ability to readily compare fares has led to opacity in pricing by moving a growing and shifting (and inconsistent among carriers) set of services out of the base ticket price into separately charged services. Interpreting market behavior as revealed preference assumes all the classical ideal market situations, including perfect information, which is particularly silly when the supposed revealed preference is for a status quo with deliberate selective opacity of key information.

skrebbel 10y ago

> Ryanair I'm not sure this comparison flies. You can say a lot of bad things about Ryanair, but in some respects they treat customers better than many airlines. Yes, they charge for everything, but as a Ryanair customer you expect that. Yes, the Dark Patterns on their website are inexcusable. At the same time, Ryanair doesn't overbook flights (they claim the hassle costs more than an empty seat). Ryanair has a pretty good on-time track records (partly due to underpromising, but still). Back on topic, Ryanair doesn't violently remove passengers from planes. Here in Europe we usually have 2 options: - Fly Ryanair/EasyJet/etc, pay to sneeze, but get from A to B - Fly BA/KLM/Lufthansa etc, free soda hooray, *maybe* get from A to B If I go on holiday I'm fine with BA as well. Free booze is nice and I'll survive the free hotel if they overbook me. No need to violently drag me off. But if I need to be somewhere at a certain time, I'll endure the crammed seats and pick Ryanair without a thought.

bogomipz 10y ago

>"If we as consumers are voting with our wallets, in most cases we're the ones who have accepted the new norm as acceptable in the spirit of chasing ever lower fares." The consolidation of the airline industry and resulting lack of choices in the US has made voting with your wallets quite ineffective. Airline's have been practicing something called "capacity discipline" that ensures that reduces the number of flights and ensures that planes are always nearly full. Where are you seeing these "ever lower" fares? US airlines are flying fewer flights and certainly fewer direct flights these days in a practice called "capacity discipline" which is designed to make sure the planes are as full as possible. The fares on a fuller flight tend to be more expensive than fares on empty flight. Also the reason why Ryan Air is so successful is not because they charge for every possible amenity but rather they have the cheapest labor costs in the industry Labor - 6€ per passenger [1] see the section"Operating Model: Execution": [1] https://rctom.hbs.org/submission/ryanair-the-lowest-cost-airline-in-europe/ https://rctom.hbs.org/submission/ryanair-the-lowest-cost-air...

seanp2k2 10y ago

More on airlines as an oligopoly enabling the poor treatment of customers with little consequence: http://fusion.net/airlines-can-treat-you-like-garbage-because-they-are-an-1794192270/amp http://fusion.net/airlines-can-treat-you-like-garbage-becaus...

charlieflowers 10y ago

But we are (I hope) voting with our wallets. We want low fares and decent treatment. The corps found it easier to lower fares than to achieve decent treatment. They failed to understand our votes. United is about to learn (when they shut their doors, I hope) that decent treatment was very important all along, and they screwed up badly by neglecting it. They got away with it for a while, but not anymore.