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This makes no sense to me. Airlines are adding another option that is cheaper. How is that a bad thing? If I don't want the cheaper option, another airline will

This makes no sense to me. Airlines are adding another option that is cheaper. How is that a bad thing? If I don't want the cheaper option, another airline will offer me a more comfortable one and I'll pay for it. What is there to be upset about here?

kareemm 7y ago
You sound like an optimist. My take is that airlines are adding a worse option for the price they currently charge, which lets them charge more for the current options.
- mikybee93 7y ago
  But in order for that to work, every single airline would have to do that together, holding hands. Because there are multiple airlines, a single airline could choose not to install them and keep their current prices for seats and outcompete those who do install these. I mean, that's basic economics of competition.
  - maxsilver 7y ago
    > Because there are multiple airlines Where is this? In much of the US, there are only two airlines. Some lucky Americans might get to pick from three or four airlines. Airlines in the US are not really competitive in any meaningful way - https://www.economist.com/leaders/2017/04/22/a-lack-of-competition-explains-the-flaws-in-american-aviation https://www.economist.com/leaders/2017/04/22/a-lack-of-compe... All American Airlines has to do is announce they're eliminating seats, and Delta and United would probably match them within 3 to 6 months.
  - kareemm 7y ago
    > I mean, that's basic economics of competition. Yes, in a free market. Airlines are expensive and heavily regulated. And regulators are subject to capture (ref: FAA and 737-MAX problems). Which means there are major barriers to building a new airline. I suspect it's actually much more profitable for airlines to follow the profit-seeking lead of a competitor. E.g. if Delta rolled out the standing seats for their current price, I suspect we'd see United and American follow. You don't have to look too far to see that's been the case with other "conveniences" like bag check fees, bag weight limits, seat selection fees, food for sale instead of being included in the price, etc.
  - cannonedhamster 7y ago
    The basic laws of economics are premised based on an optimal market, with rational actors. None of these matter in a natural oligopoly. When there are few enough actors you can functionally cooperate without ever communicating directly which acts as a defacto cartel.
xienze 7y ago
> Airlines are adding another option that is cheaper. How is that a bad thing? No, they’re going to make this the new default setting. The regular crappy seat you enjoy today will become the “economy premium” option and cost more. > If I don't want the cheaper option, another airline will offer me a more comfortable one and I'll pay for it. Assuming they go where you’re going in the timeframe you’re expecting. And assuming they don’t just move in lock-step with their other competitors and make these new seats the default.
- mikybee93 7y ago
  >And assuming they don’t just move in lock-step with their other competitors and make these new seats the default Well then they wouldn't be competitors, would they? That's another problem. Any single airline could disrupt the system by choosing not to install these and to keep their prices the same. Or choosing to install these and lower their prices. Which are two good things for consumers. Like I replied above, that's basic economics of competition.
  - xienze 7y ago
    Show me the airline today that has superior seats to all the others that charges the same amount. It’s not a coincidence that seating has gotten crappier across the board.
    - mikybee93 7y ago
      And it's also not a coincidence that flights have gotten cheaper across the board. Airlines have, as a whole, found that it's more profitable to sell cheaper crappy seats than it is to sell more expensive nice seats, because nobody will buy the nice seats given the option. If someone had superior seats, why would they charge the same amount? What I'm trying to say is that if someone comes out with a crappier seat, they will have to charge less than a normal seat. If they choose not to, they won't be able to get people into those standing seats. When a company comes out with a crappier car, do they charge the same amount as a standard car? Does the price of that standard car rise, now that there's a crappy car at its price point?
rootusrootus 7y ago
The problem is that what will actually happen is this new option will become default, and the old cattle class will now be an upgrade, and it won't cost what it does now, it will be 2x as much. There must be some MBA that figured out that someone who will pay a little extra for comfort will probably pay 2-3x as much if you push.
- mikybee93 7y ago
  That isn't what has happened historically, in this market or in others. I don't know why so many people seem to expect this to happen now. If Delta decides to implement these seats and then charge 2x as much for the current seats, United will choose not to and nobody will fly Delta unless they absolutely have to. Competition keeps this sort of thing from happening.
  - rootusrootus 7y ago
    Except that's exactly what's been happening over the years. It might be so abrupt in this case that it would fail just because the marketing would be too easy. But airlines have been incrementally decreasing seat pitch for a long time and then charging a significant amount for what used to be normal.
    - mikybee93 7y ago
      No it hasn't. Airline prices have trended downwards over time.
      - cimmanom 7y ago
        Prices for “economy” and “business class” have been trending downwards, yes. But what you now get in “business class” is what you used to get in “economy” 20-30 years ago and “business class” now is not less expensive than “economy” was 20-30 years ago.
        ghaff 7y ago

kareemm 7y ago

You sound like an optimist. My take is that airlines are adding a worse option for the price they currently charge, which lets them charge more for the current options.

mikybee93 7y ago
But in order for that to work, every single airline would have to do that together, holding hands. Because there are multiple airlines, a single airline could choose not to install them and keep their current prices for seats and outcompete those who do install these. I mean, that's basic economics of competition.
- maxsilver 7y ago
  > Because there are multiple airlines Where is this? In much of the US, there are only two airlines. Some lucky Americans might get to pick from three or four airlines. Airlines in the US are not really competitive in any meaningful way - https://www.economist.com/leaders/2017/04/22/a-lack-of-competition-explains-the-flaws-in-american-aviation https://www.economist.com/leaders/2017/04/22/a-lack-of-compe... All American Airlines has to do is announce they're eliminating seats, and Delta and United would probably match them within 3 to 6 months.
- kareemm 7y ago
  > I mean, that's basic economics of competition. Yes, in a free market. Airlines are expensive and heavily regulated. And regulators are subject to capture (ref: FAA and 737-MAX problems). Which means there are major barriers to building a new airline. I suspect it's actually much more profitable for airlines to follow the profit-seeking lead of a competitor. E.g. if Delta rolled out the standing seats for their current price, I suspect we'd see United and American follow. You don't have to look too far to see that's been the case with other "conveniences" like bag check fees, bag weight limits, seat selection fees, food for sale instead of being included in the price, etc.
- cannonedhamster 7y ago
  The basic laws of economics are premised based on an optimal market, with rational actors. None of these matter in a natural oligopoly. When there are few enough actors you can functionally cooperate without ever communicating directly which acts as a defacto cartel.

xienze 7y ago

> Airlines are adding another option that is cheaper. How is that a bad thing? No, they’re going to make this the new default setting. The regular crappy seat you enjoy today will become the “economy premium” option and cost more. > If I don't want the cheaper option, another airline will offer me a more comfortable one and I'll pay for it. Assuming they go where you’re going in the timeframe you’re expecting. And assuming they don’t just move in lock-step with their other competitors and make these new seats the default.

mikybee93 7y ago
>And assuming they don’t just move in lock-step with their other competitors and make these new seats the default Well then they wouldn't be competitors, would they? That's another problem. Any single airline could disrupt the system by choosing not to install these and to keep their prices the same. Or choosing to install these and lower their prices. Which are two good things for consumers. Like I replied above, that's basic economics of competition.
- xienze 7y ago
  Show me the airline today that has superior seats to all the others that charges the same amount. It’s not a coincidence that seating has gotten crappier across the board.
  - mikybee93 7y ago
    And it's also not a coincidence that flights have gotten cheaper across the board. Airlines have, as a whole, found that it's more profitable to sell cheaper crappy seats than it is to sell more expensive nice seats, because nobody will buy the nice seats given the option. If someone had superior seats, why would they charge the same amount? What I'm trying to say is that if someone comes out with a crappier seat, they will have to charge less than a normal seat. If they choose not to, they won't be able to get people into those standing seats. When a company comes out with a crappier car, do they charge the same amount as a standard car? Does the price of that standard car rise, now that there's a crappy car at its price point?

rootusrootus 7y ago

The problem is that what will actually happen is this new option will become default, and the old cattle class will now be an upgrade, and it won't cost what it does now, it will be 2x as much. There must be some MBA that figured out that someone who will pay a little extra for comfort will probably pay 2-3x as much if you push.

mikybee93 7y ago
That isn't what has happened historically, in this market or in others. I don't know why so many people seem to expect this to happen now. If Delta decides to implement these seats and then charge 2x as much for the current seats, United will choose not to and nobody will fly Delta unless they absolutely have to. Competition keeps this sort of thing from happening.
- rootusrootus 7y ago
  Except that's exactly what's been happening over the years. It might be so abrupt in this case that it would fail just because the marketing would be too easy. But airlines have been incrementally decreasing seat pitch for a long time and then charging a significant amount for what used to be normal.
  - mikybee93 7y ago
    No it hasn't. Airline prices have trended downwards over time.
    - cimmanom 7y ago
      Prices for “economy” and “business class” have been trending downwards, yes. But what you now get in “business class” is what you used to get in “economy” 20-30 years ago and “business class” now is not less expensive than “economy” was 20-30 years ago.
      - ghaff 7y ago