Airline price discrimination

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Northwest is starting a program where they reserve certain aisle seats for people who pay an extra $15 fee:
Flying - which once included a meal, a pillow, a little leg room and a bit of mystique - has been increasingly foodless, pillowless, cramped and joyless for some time. Now airlines are figuring out ways to make a buck from their customers' discomfort.

They're adding back "amenities" - we use this term loosely - but for a fee.

Northwest Airlines put a new twist on the trend this month, announcing that it would sell some of its aisle and exit-row seats for $15 per flight. Depending on the plane's configuration, an inch of legroom can cost from $1.15 to $2.50.

It's a fee that only an economist could love, but it's easy to see how Northwest got there.

I guess I think too much like an economist, but this sounds like a fine idea to me. It's long been the case that if you were savvy and asked for an Exit Row you could get a lot more legroom with a cheap economy ticket, and while I've used that trick many times it's not surprising that the airlines would want to monetize it. United--where I do most of my flying--has pursued a hybrid strategy. You can get an Economy Plus seat either by being an elite flyer or by just paying for Economy Plus access. Similarly, while you can sometimes get Exit Row at the airport, now that Premier Executive and above can reserve it at ticket purchase time it's gotten much harder. Obviously, it's not desirable if you're low-status and used to the way things are before, but it hardly seems unfair.

I've been wondering for a while if there's some way for the airline to charge you for each marginal inch of leg room. The problem, of course, is that each plane will have a different set of passenger preferences so any fixed seating configuration will be fairly inefficient. Maybe if there were some way to quickly move rows around an inch at a time..

5 Comments

Some things might be harder to charge for ... how much for a pillow?

The "inch at a time" problem isn't entirely solving the problem, since there are other constraints (like, the length of the airplane is fixed, so you can't have too many seats with "lots" of legroom). You can also only sell extra-legroom one row at a time, not one seat at a time, though that could be solved by a dutch auction process. I don't think the flying public is sophisticated enough to be able to easily create an auction system which solves the fixed-cabin-length problem -- people would have trouble understanding that what they're bidding on is not an extra inch, but rather an increase in legroom ratio...

Yes, I know about the row problem (that's why I wrote "row" above). What I had in mind was a fixed price per inch and that you would indicate "willingness to buy" and that once the airline had enough takers they'd start adjusting the seats. But I agree it's tricky.

JetBlue does somewhat of the opposite. The seats back of the exit row to the end of the plane are usually less popular: these are the seats with the extra room now.

Some things might be harder to charge for ... how much for a pillow?
Well, when I flew Air Canada to Vancouver for the November IETF, the answer was USD 2. For USD 2, you could get a sealed plastic bag containing a pillow and a blanket, which you got to keep. What a deal.

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