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> People flatly and absolutely refuse to pay more than the bare minimum to fly places This is too facile a take, given the existence of Business and Premium Ec

> People flatly and absolutely refuse to pay more than the bare minimum to fly places This is too facile a take, given the existence of Business and Premium Economy. I think the Asian low-cost carriers probably have it right with very very cheap basic seats, and then the ability to eke out the consumer surplus with reasonably priced “upgrades”. Air Asia’s “hot seats” have a tiny bit more leg room and are charged accordingly. I paid VietJet $6 for premium check-in, and it felt like the future. Anyway, I suspect the very blunt approach of flight aggregators showing you cheapest first without clearly surfacing comfort factors cause what you describe, rather than an inherent unwillingness to pay among consumers.

arcticbull 7y ago
Yes and no. It depends who's paying. For the most part leisure travelers aren't going to pay for anything other that basic economy. The basic economy experiment bears out that thesis: legacy airlines wanted passengers to pay more than LCC fares they had to compete with -- so they created an ostensibly painful and unattractive product in BE to encourage people to pay a tiny amount more for anything. Ultimately nobody did, and they felt they had to remove those restrictions -- and indeed most basic economy restrictions have been since lifted. The whole experiment ultimately cost airlines hundreds of millions of dollars. Flight aggregators actually switched to providing more of this comfort information (especially Google Flights) specifically because of BE but it wasn't enough to save BE. Business is paid for by businesses, and premium economy is paid for by, uh, cheap businesses. I think PE was brought in so in times of austerity businesses could avoid negative press associated with buying business-class airfare but still wanted to provide their employees a modicum of comfort so they could hit the ground running off the back of their flights. LCCs are interesting, because I would argue they support my case: people won't pay more than the bare minimum fare for a flight. They may pay small amounts for comfort upgrades but the butt in seat is a commodity. Hence, legacy carriers who try and cover their costs of 50% less density in coach are going to get their lunch eaten by LCCs who don't as the pricing disparity grows larger.
- peteretep 7y ago
  > Business is paid for by businesses, and premium economy is paid for by, uh, cheap businesses. I think this is probably wrong, but admit I don’t have the numbers to back it up. Last few years I’ve flown ~100 sectors in J and ~20 in PE, mostly intercontinental, and my impression is that there’s a strong showing of leisure travellers, based on the large number of couples and families. Could be expats with decent packages tho.
  - arcticbull 7y ago
    I'd love to know for sure too, I'll report back if I can find anything conclusive!
    - peteretep 7y ago
      You don’t have anyway to contact you on your profile but I think we have stuff in common; feel free to drop me an email
      - arcticbull 7y ago
        Will do!
- peteretep 7y ago
  > LCCs are interesting, because I would argue they support my case I think they bolster equally well the hypothesis that people will pay more, but they are guided to the cheapest option by Google Flights and so on, and then don’t price compare add-ons. Hard to know without hard data.
  - arcticbull 7y ago
    SouthWest would certainly agree with you, which is why they de-listed themselves from all the major OTAs a few years ago. That was before the UI updates for basic economy, though, so it's hard to say if that changed anything -- but of course they haven't been back.

arcticbull 7y ago

Yes and no. It depends who's paying. For the most part leisure travelers aren't going to pay for anything other that basic economy. The basic economy experiment bears out that thesis: legacy airlines wanted passengers to pay more than LCC fares they had to compete with -- so they created an ostensibly painful and unattractive product in BE to encourage people to pay a tiny amount more for anything. Ultimately nobody did, and they felt they had to remove those restrictions -- and indeed most basic economy restrictions have been since lifted. The whole experiment ultimately cost airlines hundreds of millions of dollars. Flight aggregators actually switched to providing more of this comfort information (especially Google Flights) specifically because of BE but it wasn't enough to save BE. Business is paid for by businesses, and premium economy is paid for by, uh, cheap businesses. I think PE was brought in so in times of austerity businesses could avoid negative press associated with buying business-class airfare but still wanted to provide their employees a modicum of comfort so they could hit the ground running off the back of their flights. LCCs are interesting, because I would argue they support my case: people won't pay more than the bare minimum fare for a flight. They may pay small amounts for comfort upgrades but the butt in seat is a commodity. Hence, legacy carriers who try and cover their costs of 50% less density in coach are going to get their lunch eaten by LCCs who don't as the pricing disparity grows larger.

peteretep 7y ago
> Business is paid for by businesses, and premium economy is paid for by, uh, cheap businesses. I think this is probably wrong, but admit I don’t have the numbers to back it up. Last few years I’ve flown ~100 sectors in J and ~20 in PE, mostly intercontinental, and my impression is that there’s a strong showing of leisure travellers, based on the large number of couples and families. Could be expats with decent packages tho.
- arcticbull 7y ago
  I'd love to know for sure too, I'll report back if I can find anything conclusive!
  - peteretep 7y ago
    You don’t have anyway to contact you on your profile but I think we have stuff in common; feel free to drop me an email
    - arcticbull 7y ago
      Will do!
peteretep 7y ago
> LCCs are interesting, because I would argue they support my case I think they bolster equally well the hypothesis that people will pay more, but they are guided to the cheapest option by Google Flights and so on, and then don’t price compare add-ons. Hard to know without hard data.
- arcticbull 7y ago
  SouthWest would certainly agree with you, which is why they de-listed themselves from all the major OTAs a few years ago. That was before the UI updates for basic economy, though, so it's hard to say if that changed anything -- but of course they haven't been back.