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There's already a well-proven technique for price discovery: it's called a _market_. But because there's no real market for airplane tickets--the airlines basi

There's already a well-proven technique for price discovery: it's called a _market_. But because there's no real market for airplane tickets--the airlines basically forbid secondary transactions--we're forced into a world of centralized planning, and by an entity that's fairly incompetent at that. This entire thing would be solved if plane tickets could be bought and sold in some sort of marketplace. The airlines could even take a cut of every transaction! It's baffling to me that the overbooking problem is solved at the airport, minutes before take-off. Imagine instead a world where you could buy and sell plane tickets. - On purchase, I could set a reserve price for which I'd be willing to sell my plane ticket, and have the price go up as the time of flight got near. - Late to the airport--perhaps I could trade tickets with someone on a later flight that wants to leave sooner? - I have a flexible lifestyle. Standing order for tickets to the beach|family|wherever at a low price, as long as I have 5 hour warning before flight time. Gonna miss your flight? I'll buy it. Let the airlines take a cut of every secondary transaction and let app developers & market makers figure out the use-cases.

tysonzni 9y ago
Interesting idea. However I suspect that in such a secondary market most liquidity/volume would only exist last minute, making it less likely to improve yield optimization (for airlines) or consumer choice (for passengers). It's baffling to me that the overbooking problem is solved at the airport, minutes before take-off. Think about how excess seats usually come about: a passenger doesn't show up because of some unforeseen circumstance which occurs last minute. By the time that passenger decides they can't make the flight, it might be too late to generate sufficient demand for that ticket. Potential buyers of that ticket have to be packed and ready to go. And where do we find those people? At the airport. The population of people who are super flexible in both destination and time is probably not sizable enough to generate enough volume in a secondary market.
kelnos 9y ago
This assumes a market where participants are all acting in good faith. In any marketplace for a good like this, you'll end up with ticket scalpers. I suspect any cost savings will be eaten up by the premium people would have to pay to scalpers who buy up ticket stock early and wait to sell them closer to the flight date. You end up with a lot of value being eaten up by predatory third parties who have no interest in getting on planes themselves.

tysonzni 9y ago

Interesting idea. However I suspect that in such a secondary market most liquidity/volume would only exist last minute, making it less likely to improve yield optimization (for airlines) or consumer choice (for passengers). It's baffling to me that the overbooking problem is solved at the airport, minutes before take-off. Think about how excess seats usually come about: a passenger doesn't show up because of some unforeseen circumstance which occurs last minute. By the time that passenger decides they can't make the flight, it might be too late to generate sufficient demand for that ticket. Potential buyers of that ticket have to be packed and ready to go. And where do we find those people? At the airport. The population of people who are super flexible in both destination and time is probably not sizable enough to generate enough volume in a secondary market.

kelnos 9y ago

This assumes a market where participants are all acting in good faith. In any marketplace for a good like this, you'll end up with ticket scalpers. I suspect any cost savings will be eaten up by the premium people would have to pay to scalpers who buy up ticket stock early and wait to sell them closer to the flight date. You end up with a lot of value being eaten up by predatory third parties who have no interest in getting on planes themselves.