That’s definitely a cherry picked example for the article, not the common scenario.
This is probably only on unpopular routes where they know they aren't going to fill the plane.
(By the way, if it's about inflating prices for individual, then it's not really volume discounting... it just appears this way on the outside)
"It's just another way for airlines to continue 'segmenting' their customers, charging business travelers paying with a corporate card more while offering a better deal to families on the exact same flight."
As a business traveler I actually want the price to be as high as possible while satisfying the company rules on airfare. The fare is fully reimbursed, so a higher fare means I get more points on my credit card.
Now the company rules on airfare will probably reference something like the least-cost logical fare. So it is in a business traveler's interest for all airlines to raise prices simultaneously.
Business travel is weird.
You're the kind of person forcing people to be separate just to try and get one over others. The type leaving their bag on the seat as a method of protecting your seat in the bus.
You also probably justify it as some sort of pragmatic thing but you're just selfish and inconsiderate.
But someone should totally make a site for finding strangers to book the same flight with :)
People are flaky, and being on the same itinerary with the same PNR as someone else means your trip is in their hands.
Economic argument: fat people are more likely to make use of on-board food service despite high markup, so you want as many of them as possible.
On a flight to Greenland I spent six hours smashed up between the window and a stranger (constant, sweaty, skin-on-skin contact) because they put three fat guys right next to each other on a full flight. I'd rather have taken a couple months of vacation and ridden the icebreaker in.
Is this some kind of satire? In many cases (for a whole slew of things), I feel like men pay less and get better service.
Unusually large or small sizes can end up more expensive (and/or only manufactured in limited quantities) because they're not commonly bought and they take up space on the shop floor and in inventory which could be used for things with higher turnover. (Edit: Also at the extreme ends of sizing simply enlarging or shrinking the pattern won't work well, you have to redraft it so it sits correctly on a petite or plus-sized frame).
Otherwise I would buy seats for my personal helium balloons on either side of me.
Anyway I’ll be across the aisle with hydrogen balloons paying less than you either way. Enjoy your flight!
- Taking up more than one seat with girth, needing a seatbelt extender.
- Fitting through narrow passages, tight turns, limited headroom
- An unconscious person may need to be lifted, and transported somehow
- Toilets and life vests and other safety equipment, rated for your "standard average man size"
- Total mass of passengers/cargo, and its distribution on the aircraft itself
Elevators in the US have a maximum weight and maximum occupancy rating.
Arguably, if obesity is a disability, then appeal to the Americans with Disability Act or similar regulations, but from a standpoint of safety and the common good, it does not seem unreasonable for airlines to charge extra to cover their expenses above.
Not allowed because they're too big to be carry ons.
When I rebooked, the airline gave me a credit for the round trip flight in total. I only had to book a one way ticket on the last leg, so I obviously was able to "afford" the flight without additional expenditure on my part.
Business traveler maybe. Not my money and business stuff happens. (Usually they want you to book non-refundable because it comes out ahead in the end.)
Which is why the people involved take good care to prevent anything from getting in the way of those plans.
If you miss your flight when travelling solo, you disappoint only yourself. With a family the number of disappointed people increases accordingly.
From my anecdata, being single greatly increases your chances of being bumped off a full flight. And it's a lot cheaper and easier to compensate/redirect one person than a family of four.
I did once have an airline offer me something like $1500 USD and 50,000 bonus miles if I was willing to cancel my flight, but that was days in advance.
I'm not sure that's true. The airlines are gambling that at least one person will miss the flight for whatever reason, and they'll get away with overbooking.
But, of course, when they loose that gamble, it's really a passenger that looses. The house always wins.
Not always the case, you could be physically removed from the plane because the flight is full:
https://www.flyertalk.com/articles/overbooked-united-flight-...
Author will lose their mind when they buy 10+ of the same thing from AliExpress.
> Whenever this pricing strategy began, this is a massive change in how airlines set prices – and one that will likely catch many travelers off guard.
> Unlike shopping at retail stores or Costco, bulk discounts are unusual for airlines – at least not just for booking just two passengers instead of one. And these higher fares for one passenger are the opposite of what we typically see, where travelers booking for two passengers or more wind up getting charged more per person than a single passenger.
If the plane is on a popular route, you'll pay through the nose, and there sure as hell won't be any group discounts. You'll pay almost full price for a two year old, because they know they'll fill the plane no matter what.
This isn't strictly true. Airlines have long offered bulk pricing through travel agencies and booking partners.
And as a father of 2 small kids not complaining at all, having multiple kids these days is brutal also financially, any small thing that helps is very much appreciated.
Yes and as a solo person I can choose to buy those and take advantage of it in the same way a family can. Usually it's consumables like a 6 pack of bagels or something that might cost $5 which I'll 100% use.
This airline approach comes off much different, because as a solo traveler there is no benefit or reason why I would ever buy 2 tickets to save $80 per ticket since I wouldn't get any value from it and the cost of 2 tickets even with a discount will be greater than 1 non-discounted ticket.
Most airlines seem to also charge to pick your seats. I wonder if people who travel as a group end up paying that discount back to sit together.
Coordination with others also makes booking take longer and tends to fix dates and locations, which makes it hard to grab a deal when they come up.
Typically people plan in this order:
1. Where to go
2. When to go
3. Check airfare
Flip it on its head:
1. Keep an eye out for cheap flights from your home airport
2. Pick one of those destinations
3. Choose when to go
Not exactly inverted, but the flight goes from last to first.
I had Ireland in my head for my next trip, but then Italy showed up last week. That sounded pretty good, so I checked the dates and found a flight that fit in my schedule, and booked it.
It’s not great for getting a flight around a conference, wedding, or some other event you are planning around. But when you know you want to take a vacation to somewhere and sometime this year, it can cut flight costs in half.
A single flight ends up paying for the cost of the subscription 10x over, and then some.
Also, it could be somewhere near where you want to go. I had tickets to Croatia about 5 years ago, but hand to cancel due to the pandemic. I didn’t know anything about Croatia when I booked, but I figured the worst case scenario was I catch a quick ferry or flight over to Italy once I’m there. Once you’re over there it’s cheap to go one country over. That flight to Croatia was $289, that cheaper than a flight to Nashville for me, which is only about an 8 hour drive.
I did the same thing when I booked a flight to Sweden. I didn’t know if I’d like it there, so from there I booked a connection to Copenhagen for next to nothing. I spent a week in Copenhagen, but then ultimately did go back to Sweden for week, which I ended up loving. I’m glad I didn’t spend the whole trip in Copenhagen.
Another deal I got that stood out was to Tokyo. I think I paid around $550 give or take. A coworker of mine has family there and goes on a regular basis, he was floored by that price. He always pays over $1k, and usually closer to $1,500.
Ultimately it’s just an alert service for flights that are abnormally low. If you have a specific destination in mind, Google Flights is pretty good at showing when the cheapest time to travel is, giving a booking date of today. Of course it fluctuates over time, which is where the alerts come in.
It’s saved me thousands. Though I probably would have only taken about 20% of the trips I have without it.
I got my own flight tickets by looking on my own though.
550 USD for Tokyo is so cool, wow
What's remarkable here is that airlines waited this long to do it. Sad news for me as a usually solo traveler who prizes flexibility, but I understand airlines wanting to prioritize groups and more locked-in fares.
Remember the really old days when air miles were awarded solely by distance flown rather than by dollars paid? This made no business sense. It meant that someone who flew the cheapest tickets could rack up as many points as a last-minute first class business traveller who spent massively more ticket.
With the airlines I’m familiar with, it seems that pricing anomaly has been corrected. Air miles are much more correlated with the price of the ticket these days. Eg., you don’t even get air miles on the cheapest tickets on one airline I know.
But I still wonder why the airline industry created an air miles formula so disconnected from the value of the passenger in the early days.
"Congratulations! You flew 100,000 miles with us!"
"Congratulations! You spent $100,000 with us!"
I actually prefer the miles per $ model since it seems more fair for everyone. Obviously it’s less exploitable but that’s exactly the sort of thing everyone is complaining about.
For hotels, I still tend to pay the premium. I don't expect to cancel but, especially for an extended city stay, it can be a fair amount of money and the premium usually isn't that huge.
With even moderate airline status rebooking/cancellations work more or less as described. I can’t recall the last time I haven’t been credited for a flight I ended up not taking, even I did a full on no-show.
Without status airlines sell refundable tickets with similar flexible rules, but I assume there is some adverse selection included in how they need to price those fares.
Realistically most frequent travelers go for business and they don’t care about cost that much so subscription packs wouldn’t be valuable. That’s why loyalty programs instead offer non monetary perks or those that accrue to the individual (points).
Of course, there are exceptions. Governments seem to be some of the worst violators, they really do not care about costs and in many cases they egregiously throw money around for 5 star luxury hotels, first class flights, etc.
But when I travel, it's not like I'm gonna call up my buddy and ask him if he'll join me on a flight so I can get a better ticket price. And if I'm going on vacation with my family, I'm not going to buy individual tickets, like why would I do that?
You used to see "surcharge for visa" but visa made that illegal.
So now you see "discount for cash/debit", and everyone is happy!
We need a passenger bill of rights, not just for the airlines, but also how passengers are treated in airports, by security, and concrete cause of action for consumers when airlines misbehave.
We have a Sam's Club membership because buying in bulk is cheaper.
Edit: checked prices Sam's vs Meijer
I think the explanation is wrong and the author is jumping to conclusions. Airlines have long offered "bulk" discounts. Their goal is to fill as many seats on a flight as possible. What we are seeing here is their group pricing creep into their direct sales.
When you fly, you usually have a choice between lots of airlines. So there's nothing "public utility" about it whatsoever.
Airports, on the other hand, are considered public infrastructure. There are also sometimes routes that are only served by one airline, which are sometimes regulated accordingly. But that isn't the general case, nor should it be.
Public utilities include things like electricity, power, gas, sometimes telecoms. Being a monopoly is an inherent part of it.
- That it's still way cheaper in most instances to book a return (especially where the "trip" straddles a weekend) rather than a one-way fare when travelling long haul - even if you just throw away the return flight.
- That you can sometimes get access to totally different inventory by booking a package including accommodation, even if that accommodation is one night in a shared dormitory in a hostel (which you just don't go to).
At least group discounts have a recognizable economic rationale. But in these examples you are getting a strict superset of the same SKU (OK, maybe the change rules might be a little tighter, but not in a way that's perceptible) for less money.
But yes, in terms of money, it sure is waste to pay more for the flight.
You might be able to find an airline where it doesn't happen, but you will definitely find airlines where it does. Just verified with Delta and British airways and Lufthansa
One way business 6,032 Swiss francs.
Round trip business (with a return 6 months later) was 2,530 Swiss francs. So I screenshotted the horrible one-way price to go in my expense report, and then booked the round trip ticket.
So… you committed fraud? Cool?
I’m all for sticking it to the corporate overlords, but careful how far out you stick your neck.
My guess is the airlines think one-way people are business folks (so the price doesn't matter because it's getting expensed), whereas return travelers are paying their own way
I also don't find this particularly outrageous. Lots of companies do volume discounts, and traveling as a family gets very expensive very fast.
Finally, the fare bucket system used to price flights usually works the other way to penalize groups. If there's 3 seats left in the cheapest bucket, and you try to book for 4, you don't get 3 cheapest plus 1 more expensive, your entire group gets priced at the more expensive bucket.
i wonder how low birthrate societies like Japan or South Korea are like, is it worse to improve birthrates? or is it better because being single isn't an anomaly?
More importantly, the number of single/solo people isn't even low in the US. If i had to ballpark it, at least a quarter of the population is like that. Lots of married people travel solo for business for example. Why aren't some airlines playing capitalism well by offering "business elite" flights where solo travelers get a loyalty discount and there are no children on the flight? Not for all destinations but at least popular ones like to vegas or NYC <-> LAX.
Pre-Covid there were a couple airlines playing around with business class only flights from NY to LA.
Solo business travelers are where the money is made. The rest of the seats tend to exist at cost or even below to fill up the plane. Airlines would be pretty foolish to try to lower margin on the least price sensitive class of traveler they service.
Group 1 seats cost 100 dollars Group 2 seats cost 110 dollars ... Group 10 seats are 350 dollars
Your group order got the last seats in group N and the first seats in group N+1
This is where the myth of "booking late gets you the cheapest seats" comes from. If an early booking passenger cancels their Group 1 seat it becomes available to buy again and it is still a group 1 seat even if every other seat has been sold. So late cancellations can make cheap seats available again.
For example, if Delta went under, Atlanta, Detroit and Salt Lake City would lose a total of 50%+ of their flights. That would be absolutely devastating.
If we allowed markets to become monopolized we have to deal with that when the bill comes due rather than kick the can down the road.
Since air travel was substantially more expensive then than now, the amenities gravitated to what attracted the most frequent fliers: businessmen. So stewardesses (they certainly weren't called flight attendants then) had weight limits, age limits, and if-you're-married-you-must-quit deals, and as a glance at some 1970s uniforms will show you, they were basically hiring models who happened to have the right skill set (usually at least one would be a trained nurse, and they all had to be reasonably confident) to dress them in revealing outfits. Like Hooters for travel.
If that's what you want, great. If you'd prefer other amenities... maybe not.
It has never struck me as coincidental that smoking was banned on US aircraft before no-smoking policies became nigh-universal at restaurants, but in just about the right timeframe for airplanes to shift from a boys' club to a place that catered to families.
If you want to pay more to get more, there are a lot of options, starting with coach plus (coach seats, business class legroom, priority boarding) and going through first class before branching out into niches like all-first-class flights (JSX is an airline in the US for which this is the business model; they fly smaller regional-size planes, and the reduced capacity legally allows them to skip the whole TSA and terminal experience and just let you on the plane if you show up and buy a ticket twenty minutes before departure) and then on into the various levels of chartered and truly private aviation.
You do, definitely, get what you pay for, but sometimes you don't need a Michelin-starred meal experience. And when that's the case, you've got cheaper options that didn't exist before deregulation (except for Southwest, which avoided problems by not making interstate flights at all in the early days.
There might be some benefits to price discrimination (which is in effect what a point systems achieves) but the collective time wasted dicking around with points isn’t worth it. Make all point systems illegal.
They do it by selling data, by points expiring, and by often only allowing points when seats would be empty otherwise.
And often retailers pay more at POS terminals!
This all ties into any rewards program. It's part of the package, even if points are granted for use.
This is really the whole point. The sale of data is much less lucrative than the purchases by the customers themselves, especially for the "nicer" cards.
If you are a CC company with wealthy clientele, they tend to spend more. This means that retailers are willing to offer deals/rewards to attract those clients, and also that you want to offer rewards to keep those clients.
This is why e.g. American Express has cards with great rewards, high annual card fees to keep the riffraff away, and retailers willing to take a larger % cut in order to have those cardholders shop at their store where they presumably purchase more.
It’s more a sunk cost/commitment thing. Their approvals department keeps away low and inconsistent spenders.
At the high end it actually diminishes. Rewards cards targeting middle of the distribution are more lucrative, generally. Citi Double Cash gets you 2% cash back on purchases whereas the Amex Platinum gets you 1X on all spend worth at most 1.25% (and 5X on airfare).
Which is adjacent to: Nearly everyone loses, because the house knows the odds and controls the terms and conditions of the rewards.
This is false. https://x.com/patio11/status/1902555603534295115
If you're going to claim "the general consensus", [citation needed]. A more likely claim is "more people have read the misinformation from the Atlantic than have read the correct refutation from a domain expert on credit cards", which is sadly probably true.
And Twitter doesn’t show threads unless you’re logged in btw, so you just linked Patrick’s opinion.
(Also, the argument is not "credit cards are fair". The argument is "credit card reward programs are not a subsidy of the rich by the poor".)
> And Twitter doesn’t show threads unless you’re logged in btw, so you just linked Patrick’s opinion.
Fair point, thank you.
Some highlights of the thread, assuming that each directly linked tweet can be loaded:
Citation for people with more money spending more: https://x.com/patio11/status/1902556736956903589 (linking to https://www.bls.gov/cex/tables.htm ).
The rich are paying far more of the "payment system overhead" of merchants than the poor are: https://x.com/patio11/status/1902556925826416841 and https://x.com/patio11/status/1902557078222176449 and https://x.com/patio11/status/1902557151807119735 and https://x.com/patio11/status/1902557413275775295
Identifying the key question: https://x.com/patio11/status/1902557654603415768 and https://x.com/patio11/status/1902557795800498477
Quoting and questioning the Atlantic's claim that rewards programs aren't funded by interchange: https://x.com/patio11/status/1902558008283992313 and https://x.com/patio11/status/1902558055310434325
Citation refuting this: https://x.com/patio11/status/1902558157169152158
Quoting relevant charts and data from the citation: https://x.com/patio11/status/1902558268070711311 and https://x.com/patio11/status/1902558360530002094
Claim (not specifically citation-backed) that in fact one group getting a subsidy is lower-income consumers during macroeconomic shocks: https://x.com/patio11/status/1902559088631771397 and https://x.com/patio11/status/1902559166729802088
Observation that while wealthier people get higher-reward cards supported by interchange, poorer people get free checking supported by interchange: https://x.com/patio11/status/1902559216214134798 and https://x.com/patio11/status/1902559349655982387 and https://x.com/patio11/status/1902559372758155325 and https://x.com/patio11/status/1902559469470412913
Refutation of another part of the Atlantic article (article claims credit-card companies "make lucrative deals with airlines and hotel chains", but credit card companies pay for those deals, not the other way around): https://x.com/patio11/status/1902559896400203987 and https://x.com/patio11/status/1902560051644002726 and https://x.com/patio11/status/1902560160632963217 and https://x.com/patio11/status/1902560257282335024 and https://x.com/patio11/status/1902560386395545603 .
Patrick’s argument is flawed because it assumes that if the interchange fee pays more than the cost of providing benefits, then it’s not a “subsidy”.
This is false because the interchange fees, and in fact all of the fees, have to pay for the entire company’s operations, not just for your points program. Without more detailed data it’s not possible to rule out the possibility that points programs are a subsidy for the rich.
The second assumption he makes is that volume is the same across the board. It’s not, there’s way more customers on the lower end, and the company charges them even more fees. So sure, rich customers individually pay more interchange fees, but the company could still be making most of its money from poor customers.
Unfortunately without knowing the CC company internals we have no way of knowing. Which means that Patrick’s opinion while being an educated guess is still just a guess, so it doesn’t refute anything.
Sure. But the default and reasonable presumption is that at that scale, companies do things because they're profitable; in this case, they implement rewards programs because they make more money by doing so. In particular, the default and reasonable presumption is that companies don't spend more money acquiring a class of customers than they expect to make from those customers. The claim by the Atlantic article is that credit card companies lose money on the rewards programs for rich people. There's no evidence of that, and some evidence to the contrary.
> Without more detailed data it’s not possible to rule out the possibility that points programs are a subsidy for the rich.
That's not where the burden of proof lies. Without more detailed data it's not possible to demonstrate that rewards programs are a subsidy. The conclusion is not presumptively valid.
I'm not suggesting, either, that the argument from the linked Twitter thread is ironclad, just that it's compelling evidence against.
> The second assumption he makes is that volume is the same across the board. It’s not, there’s way more customers on the lower end, and the company charges them even more fees. So sure, rich customers individually pay more interchange fees, but the company could still be making most of its money from poor customers.
"more customers on the lower end" is in fact refuted by the data; see figure 2 (F) in the linked paper.
"making most of its money from poor customers" might be true, but note that figure 2 (E) is scaled by "percentage of average daily balance", and if you were to view it in absolute terms, it seems less likely to be true. Even if it were true, though, it's not evidence of a subsidy of rich customers by poor customers. The credit card companies very obviously think that rich customers are profitable to acquire and keep, or they wouldn't pursue them so heavily. The evidence from the thread supports that claim.
The argument being made in the thread is, precisely, if the rewards program pays for itself an individual customer, that customer is not being subsidized in any way.
If you want to claim that the rewards programs offered to richer customers aren't in fact profitable for the credit card companies, that seems like an even more extraordinary claim, and not one that seems to have supporting evidence.
Alternatively, if you want to define "subsidy" so broadly that any business making more money from one group of customers than another is having one group of customers subsidize the other, even if they are making money from both, then I'd question your definitions and use of evocative terminology. They're spending money to get a group of customers, and if they're spending more to get those customers than they make from those customers, they wouldn't spend it in the first place; if they're spending less to get those customers than they make from those customers, then those customers are not being subsidized.
Patrick doesn't really dispute this, but tries to argue that this doesn't matter because rich people pay more in absolute terms, so they're not getting "subsidized". Maybe this is just word lawyering over what "subsidize" means, but most people would characterize this arrangement as at least "unfair", even though rich people are paying more in absolute terms.
He also points to some graphs about how from the point of the view of card issuers, the middle customers are actually the ones being subsidized, not the rich or the poor. That might be true, but is totally unrelated to the original original point, which is about what effective price (ie. price paid - cashback) consumers are getting at shops. Moreover, the fact that they're getting a subsidy from the card issuer doesn't preclude from them getting a subsidy from the store itself.
And the thread counters that in several ways: rich people spend more in total at the store so their interchange costs are more than made up for by actual spending; and poor people are getting different rewards in exchange for the interchange system, such as free checking/banking (which was made free by using interchange fees to subsidize it so there aren't monthly fees).
To be clear, I'm not suggesting that the financial system overall is particularly fair. If you want cases where it's extremely unfair, a target-rich environment would be bank accounts that have fees that just so happen to disproportionately affect poorer people (e.g. overdraft fees).
But credit card reward programs aren't a case of transferring money from poor individual cardholders to rich individual cardholders; credit cards are a case of transferring money from poor and "rich" cardholders to ultra-rich credit card companies. The right target for the ire, there, is the credit card company, not the "rich" individual cardholders. This is a standard divide-and-conquer tactic: better to pit low-income and high-income people against each other, rather than cast attentions on the very large companies that have constructed a system to profit heavily from both of them.
Suppose people making $1M+ are taxed at 20%, and everyone else is taxed at 25%. Ignoring the small segment of people making just under $1M, most people would at least characterize this as unfair. You could plausibly this isn't a "subsidy", because the $1M earners are paying more taxes in absolute terms. However it doesn't really refute the argument that the $1M earners are paying "less". Maybe "subsidy" is the wrong word for this, but it's pretty clear this is what detractors of credit card are pointing out.
That model is not analogous to the credit card situation, in multiple ways. Among other things, it's framing this as a "tax" (which isn't inherently the right model), and presupposing that the origin of the "tax" is the credit card interchange, and mapping the "rewards" programs to a discount on the "tax" but not mapping anything else (e.g. free checking or the availability of credit instruments that wouldn't otherwise be available) to that, with a lot of assumptions about which parts of the overall system to include and map, and which parts to leave out. The net result seems like a cherry-picked conclusion to fit an agenda. If you decide in advance what you want the model to show, you can make a model to show it, but that doesn't mean that model is an accurate representation of the system.
When I said "rich people spend more in total at the store so their interchange costs are more than made up for by actual spending", I mean that on balance, they are not "costing" the merchant more, they are giving the merchant more money.
Card companies/issuers charge interchange so that the credit card company makes money; they don't do it with the primary goal of funding rewards programs, or free checking, or the other things they do for marketing purposes. That would be like saying "the primary reason this company charges for their product is to spend money on marketing programs". Credit card companies didn't pick their interchange rates on the basis of funding reward programs, specifically; they set their rates to make money for themselves.
Also, to the best of my knowledge, current law no longer allows credit card companies to prohibit merchants from charging a premium for using credit cards, or for using specific credit cards. (Credit card companies used to do this, which effectively made them a cartel engaging in price-fixing.) e.g. there is nothing preventing merchants from charging less to people with cards that cost less to accept, such as debit cards or less "premium" credit cards. In theory, doing so might create competition for cards with lower interchange, or incentives for people to stop using rewards cards. In practice, however, merchants don't do this. Given that, you could just as easily portray this as a model where merchants are choosing to value the custom of higher-income people (e.g. because they spend more) over the custom of lower-income people. I don't think that's an accurate model either, though.
I think it is reasonable to observe that credit card companies have way way way too much power to set prices for merchants, and treat that as a problem worth solving. I don't think pitting low-income and high-income people against each other is a productive way to solve that. The point of my previous comment, and of the thread I linked, was that neither low-income nor high-income people are on net "making money" from the existence of interchange or from any form of rewards programs. Credit cards make money from both low-income and high-income people alike, and make more money from high-income people, and neither one is subsidizing the other.
(Also, I'm very rapidly reaching my limit for how much energy it's worth investing into a conversation. Frankly, at this point I think anyone interested in the evidence or the accuracy of any particular model has that information available, and anyone interested in pre-deciding a conclusion without caring about the evidence has had that option the whole time, and I don't see much value in continuing. There doesn't seem to be disagreement here on the point that credit card interchange is too high, and that's not a good thing. There's disagreement on whether it's either accurate or useful to frame that as a subsidy from poor people to rich people. By "accurate" I mean "is it actually an accurate model of how the system works, for the purposes of understanding and changing the system", and by "useful" I mean "does that model actually help effect change, rather than just provoking outrage". I don't particularly think the framing as a "subsidy" serves either of those purposes.)
That's a lot of words, but I don't see how it refutes the core point which is that "rich" cardholders pay 1% (or whatever) less on their spend than someone paying with debit or cash. All you did is handwave a bit about how interchange fees aren't really like a tax, and how the logic is "cherry-picked".
>Card companies/issuers charge interchange so that the credit card company makes money; they don't do it with the primary goal of funding rewards programs, or free checking, or the other things they do for marketing purposes. That would be like saying "the primary reason this company charges for their product is to spend money on marketing programs". Credit card companies didn't pick their interchange rates on the basis of funding reward programs, specifically; they set their rates to make money for themselves.
Again, this is a lot of words but I don't see how this refutes the claim that rich cardholders get 1% back but poorer people paying with debit/cash do not. Moreover, if you're sufficiently cynical, you can claim that the government levies taxes so they "make money", not "with the primary goal" of funding schools and roads.
>Also, to the best of my knowledge, current law no longer allows credit card companies to prohibit merchants from charging a premium for using credit cards, or for using specific credit cards. (Credit card companies used to do this, which effectively made them a cartel engaging in price-fixing.) e.g. there is nothing preventing merchants from charging less to people with cards that cost less to accept, such as debit cards or less "premium" credit cards. In theory, doing so might create competition for cards with lower interchange, or incentives for people to stop using rewards cards. In practice, however, merchants don't do this. Given that, you could just as easily portray this as a model where merchants are choosing to value the custom of higher-income people (e.g. because they spend more) over the custom of lower-income people. I don't think that's an accurate model either, though.
The fact that merchants are freely choosing to give rich cardholders subsidies doesn't diminish the fact that rich cardholders are being subsidized. It might be better than some imaginary system where they're forced to subsidize rich cardholders, but detractors of cashback/rewards programs oppose such programs existing at all.
>Credit cards make money from both low-income and high-income people alike, and make more money from high-income people, and neither one is subsidizing the other.
You're committing the same mistake that you allege me doing above (ie. "If you decide in advance what you want the model to show, you can make a model to show it, but that doesn't mean that model is an accurate representation of the system."). In particular, you're restricting yourself to only analyzing the revenue/expenses from the card issuer's perspective, and not analyzing how much the customer ends up paying. It's possible simultaneously for a card issuer to be making money off of rich people, and for poor people to be screwed over by the interchange fee system. An overly simple model that demonstrates this would be a population divided into "rich" and "poor", where "rich" people use credit cards with 1% cashback and 2% interchange, and "poor" people use credit cards with 0% cashback and 0.1% interchange. In this model, from the perspective of the bank, they're clearly making more money off "rich" people in both absolute and relative terms (2% - 1% cashback = 1% profit, compared to 0.1% interchange for "poor" people). However the rich would still be paying a lower effective price for whatever they're buying at the stores.
Of course, this analysis leaves out a bunch of details, but neither Patrick's thread nor your comment tries to refute why the model above is wrong, why we shouldn't use "effective price" (ie. price paid - cashback) as the thing to analyze, or we why we should focus on some other metric (eg. card issuer profit) instead. All he did was point out some other metric and say "but these metrics say they're making money off rich people as well, so you're wrong!", without trying to refute the original claim. It's like arguing with a "replace income tax with tariffs" proponent, and having him respond to your claim that tariffs are regressive with "yeah but rich people still pay more in absolute terms so it's not regressive!".
The cherry-picking in question, here, is that you are choosing a model that claims the rewards being paid to richer people are a subsidy of the rich by the poor, by attributing one input to one output, while ignoring everything else in the system. Think about double-entry accounting for a moment: would it be reasonable to point to one inflow and one outflow and say "this inflow paid for that outflow!" as a serious model, without looking at anything else in the system? And in particular, would it be reasonable to claim that as the "core point" and demand that people refute that point while ignoring any evidence invalidating the oversimplified "one inflow, one outflow" model that privileges that point and treats it as the core point?
To draw an analogous argument, which is faulty for the same reason the credit card rewards "subsidy" argument is faulty: if a store offers a "bulk discount", is that a subsidy from poor people (who may not be able to afford to buy or store in bulk) to rich people (who on average can do so more easily)? Using the same modeling you're describing would paint it as such: poor people pay more for the same goods. I would argue that it's more accurately modeled as an incentive offered by the store that they see as on net bringing in more revenue? Do you expect that the store, upon receiving that higher revenue, needs to use it to somehow lower the prices paid by poorer people to compensate? And if they do not use it as such, and instead pocket that additional revenue or use it in some other way, does that suddenly make this a subsidy from poor customers to rich customers?
I am, in general, in favor of the argument of analyzing a system's net effect and not just its intentions. But it's faulty to analyze a subset of the system and then attribute fault or foment outrage based on that simplified model of the system.
If you want to argue that the entire system is not the perfect system, or that it could be improved, you'll get no argument from me. If you want to argue that, in general, "having money is a massive advantage for getting more money", again, that's entirely true right now.
If you want to argue that you've shown a specific subsidy of the rich by the poor, I think you haven't given evidence to support the validity of that model. And in particular (and to my mind the more important aspect of that argument insofar as the point of arguing about systems is to evaluate potential changes to them), if you want to argue that in a different system with no interchange, poor people would pay less for the same goods than they do in this system, I think you'd need more of a model of the overall system to successfully argue that. In particular, among other things, 1) would merchants actually make more in that alternate system rather than making less (which the observation that merchants make more money from higher-income customers calls into question), and 2) would merchants actually pass that savings on, specifically, to lower-income customers, which the observation that they don't currently charge different prices for different customers calls into question, and 3) would some other part of that system change as a result that makes things worse in other ways, such as products like cards or checking accounts (a checking account is a credit instrument) no longer being available to people with lower income or lower credit scores?
I'm not making this argument because I think the financial system is perfect and shouldn't be changed, or that the financial system overall is fair. I'm making this argument because the oversimplified model that foments outrage by claiming a subsidy of the rich by the poor is a bad model for the purposes of reasoning about the system and attempting to make it better. Criticizing that model and arguments based on that model isn't based on wanting to preserve or advocate for the status quo, it's based on wanting to accurately model the world as a step towards evaluating potential improvements.
Is this just word lawyering over what "subsidize" means? I can understand how strictly speaking, rich people getting more cashback (or lower taxes) isn't exactly a "subsidy", because they're still paying more than "their share" into the system, but most people would still think the arrangement is unfair. Call it "regressive" or whatever, but I still think it's a valid complaint.
> Is this just word lawyering over what "subsidize" means?
Insofar as words have meaning, possibly. Before arguing that one group is subsidizing another, you'd first have to argue that one group is being subsidized. Leaving aside the original meanings (which only describe public funds in the first place, which this isn't), and interpreting the apparent meaning, the claim is apparently that credit cards lose money on rewards programs for rich customers, and those programs are thus subsidized, and specifically that they're subsidized by poor customers. If that were the case, they wouldn't have those rewards programs. (I'm not claiming that no company in the world has ever spent marketing money they didn't have to or spent it unwisely; I am claiming that an absurd amount of analysis has gone into the finances of rewards programs, in particular, and it is extremely unlikely that card companies are spending more to acquire a class of customers than the revenue they get from that class of customers.)
Now, more broadly, if you want to claim that credit card companies make more money from poor customers than rich customers, that would not be too surprising of a claim. (It's not obvious if the evidence supports that, and it seems like it may not be the case, but let's set that aside for a moment.) That's not a subsidy, and I wouldn't even call it "regressive", any more than I'd call a company that makes more money from rich people than poor people "progressive".
If you want to say that, in general, the practices of credit card companies and the financial industry are not fair to lower-income people, I would agree with you there. I don't think any subsidizing is going on, and I don't think rewards programs are a redistribution program; any such claim would imply taking a loss on a class of customers but keeping those customers anyway. But I absolutely would support a claim that (for instance) credit cards are predatory. Or, for instance, that airline miles programs are deliberately confusing and misleading and to a first approximation no customer "makes money" on those either.
You're not forced. This allows them to make extra money from people who don't bother, and offer discounts to price conscious people.
Time is money. Convenience too.
> to get the full value of my money.
No one is forced to understand the system, but that means leaving some indeterminate amount of money/value in the hands of the predatory airline.
If you wanna save money, you figure it out. If you don't wanna figure it out, you leave money on the table.
They're selling (negative) convenience, but that's pretty much by design.
You already have to spend time researching airlines, buying tickets in advance, etc. but now in addition to that there is a completely contrived layer of bullshit I need to know about.
You can extend this concept even further and imagine literal series of hoops that you must jump through to earn “cash back” on your ticket at the end of the flight.
If points systems caused losses then nobody would have them. They’re money makers, and that money is coming from someone’s pocket.
It sounds like you believe the losses are coming from the people who _have_ the points? That doesn't seem likely to me.
It would be a better analysis to say "it's complicated" -
* Business travelers earn personally-owned points on their company spending. In this case, the company might be paying higher prices but the individual is being incentivized to continue that because the miles are essentially a kickback.
* Personal travelers have an incentive to travel with the same airline for more points, so a kind of lock-in for either (1) those who are not as sensitive to price differences or: (2) those for whom the benefits of the points are high enough to outweigh some higher costs acquiring them.
* In the same vein, a points system that encourages a traveler to stay with the same airline can give _that airline_ greater profits from _that consumer_, even if on a per-flight basis the airline might hypothetically be making less. It's like Costco selling stuff for a cheaper unit price.
Instead I’d rather focus on human nature and induced behaviour.
When mcdonald's offers 2 burgers for the price of one, they make money because people who wouldn’t normally eat at mcdonald’s show up.
When airlines offer points, they make money because people who normally wouldn’t book flights end up booking them. Even if the points are a good deal, you end up spending more money than you normally would because you’re enticed by the points.
If you want to buy anything and just pick the first option then you probably will have worse results than someone that did research. Or someone that used coupons. Or someone that waited for a sale. Or someone that bought used. Etc etc
We obviously shouldn’t make all those behaviors illegal. There is an inherent time/money trade off in life. It’s actually the whole basis for economic activity (ie it’s why employers are able to pay you to do stuff for them) so stopping it would probably be quite bad.
The problem comes when the original seller doesn't want their price discrimination scheme to be thwarted by efficiency-improving arbitrageurs and takes measures to prevent that, because that's rent-seeking behavior and shouldn't be tolerated.
The airline wastes resources on their end, and so do the consumers. They're both doing what they're incentivized to do, but that's not what's actually efficient for society. The whole point of a good economy is that these two are always pulled into alignment (Efficient Market Hypothesis), but ours has failed in this case.
It was fascinating to chat with the software engineers at ITA Software.[0] Turns out flight routing (which everyone knows "should be" just a simple A*) is actually NP-Hard because of how convoluted the airline pricing systems are. At that company it was obviously a group of super smart people solving super hard problems..... and for what?
This is Kurt Vonnegut Jr's "Dynamic tension": muscles working against muscles, with no work being done. This is what Bullshit Jobs (good title, disappointing book) should have been written about.
To quote Eisenhower, this (lesser) scourge also
signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.
[0] https://news.ycombinator.com/item?id=29425650 or https://en.wikipedia.org/wiki/ITA_Software
One flight will get you to your sister's wedding on time. The other won't. They don't have equivalent value, they can't be freely exchanged.
It’s hardly the only fee, either.
Net profit was $6.7B meaning literally all of their net revenue (a total of 2.25% of gross revenue) was accounted for from these ancillary fees.
But their inflation-adjusted cost went down 36% since 1995.
There were a total of about 1 billion emplanements by US carriers in 2024, ish, so we're talking about a total of about $6 per passenger per year. They really are insignificant.
$70 ($35 both ways) on a $300 flight isn't that small. And again, that's not the only fee.
See also: hotels adding "resort fees".
On domestic tickets there's no YQ, YR or embedded Q surcharges anyways.
Domestic airfare in the US is down 36% adjusted for inflation since 1995. [1]
Even base tier status concentrated flying with any one carriers get you a waived checked bag, and so does pretty much any airline credit card. So basically you shouldn't pay more than $95 a year in checked baggage fees.
US airlines generally have sub-5% net margins which is why they find themselves in creditor protection every decade or so when the market turns. There's a long-running adage about investing in airlines.
[1] https://www.bts.gov/content/annual-us-domestic-average-itine...
Just because some people won’t buy anything that isn’t on a coupon doesn’t mean coupons are bad.
Because you can save money by getting a cheaper flight by understanding how pricing works and adapting your purchasing strategy. Many consumer are willing to spend time and effort getting a better deal.
This can be true even if the lower price is nominally a discount. Before everybody would pay $100. Now you can pay $80 by screwing around but have to pay $150 otherwise, and the screwing around is $40 worth of inconvenience. $40 is less than the $70 difference between $80 and $150, but $80 plus a $40 inconvenience is a higher cost than the original $100 uniform price, and obviously so is $150.
Which is bad for consumers and the broader economy.
It’s no different than clipping coupons or waiting till closing time to get pastries at a discount.
I mean, yeah, sure. Capitalism is totally stupid and wasteful and evil. Any proposals? Oh wait, no, I'm afraid I don't really want to hear any proposals on this subject. I sincerely wish we don't have to live in interesting times. (Alas, I'm afraid it's past the point we could wish that anyway, so…)
If you are going to book for 3 passengers they charge three of you with the next level, more expensive fare.
But so far my favorite is they force you to buy seat if you travel with infant. You cannot select free random seat as their planes have rules to allow infants only on the seat near the window.
Larger groups are more price sensitive. They should pay less because they have more buying power when they buy ahead.
The problem with this isn't the difference in prices - charging less for buying in bulk is a normal thing that's probably been done by merchants since the invention of money.
The problem with this is the lack of communication. There's no advertisement of a bulk/family discount at any point during the pricing process, you just see a different price. That's the problem here, not the price difference itself.
Here they don't even advertise it as a discount, so there's no ethical problem with raising the individual traveler price by x and lowering the family price by y so that the total profit remains the same.
One, there isn’t. One party undercutting another for the same product is how competition generates consumer surplus.
Two, it isn’t the same product. When I fly with my family, we check in together. We board together. I collect their docs on my phone and double check they have them on theirs. I turn down upgrades so I can sit with them. If there is a change, it takes one customer service agent maybe 10% longer to adjust everyone in bulk. I’m not incurring 4 or 5x the cost on the airline for 4 to 5x the revenue, this is why bulk discounting exists for everything.
This isn’t an ethical problem. If it’s triggering an ethical system, that’s more damning for the system than for Delta. This is a communication and brand problem.
There's an even bigger fairness issue when there's such a huge data knowledge gap between the parties, both knowing that there is this hidden price structure as well as knowing a ton about you. So there's privacy implications too.
Edit: it's not undercutting. It's price discrimination. You know the thing people fucking hate when trying to buy a car. Half the reason people liked buying Tesla is cause the price is the price is the price.
Transparent pricing worked as a positive differentiator for cars. (Saturn. Tesla.)
I believe airlines have tried their hand at it. But it doesn’t budge the needle. If there is a single enduring truth to at least American airline demand, it’s that most consumers will pick the cheapest ticket. Almost nothing else matters, when it comes time to pay for it, to almost all of the flying public.
Perhaps that's because all the U.S. airlines have engaged in such a race to the bottom on quality that there's no other distinguishing factor. I'd happily pay more for a more pleasant experience, but no one offers it.
Sure. That’s the point. So the market rewards the carriers who can cut prices lowest.
What I would be curious about here is whether this single/double discrimination extends to Delta’s loyal customers. (My hunch is no.)
Nope. The rule is proven by the exception. When carriers and new entrants have tried to disprove it, it’s generally proved true.
> I'd happily pay more for a more pleasant experience, but no one offers it
Between premium seats and private charter it absolutely exists. Most people can’t or won’t pay it, however, because it’s not worth that much to them.
Is it fair to charge people with different sized families different prices (per unit) for toilet paper?
vs.
Is it fair to charge people different prices (per unit) for different sized packages of toilet paper?
The former makes it seem nefarious but the latter is commonly accepted as fair. Same for airline tickets - if there's a discount for buying in bulk that's just as fair as a discount for buying toilet paper in bulk.
In all honesty all this thread is people complaining about something they don't have a clue about. Airline pricing is insanely complicated, and this is for a reason. Airlines are not a luxury business, they barely manage to survive. If not all this dynamic pricing, special contracts with agencies, etc, they'd have to charge so much for a seat that you wouldn't pay and all this travel industry you are accustomed to simply wouldn't exist. The whole business is built on making somebody who crucially needs to fly pay as much, as he can, and then to make price attractive enough for the rest of us so that you can sell the rest of the tickets, so that flight can make any profit. And in the end, margins are super thin in this business.
Also, your question implies that you imagine that there is some simple enough "true price for a seat", which is so far from the truth, you have no idea. If you actually look at the price breakdown for a given ticket, there are literally dozens of components in it. It's not unusual that so called "fare" of a ticket (which is, like, "just price") may be literally $1, and the rest of $300 is various taxes, surcharges and payoffs I won't even try to start to explain here.
I mean, really, people here truly have no idea what they are complaining about. Airline pricing is not a thing you should hate.
Considering that I saw the same uproar on 4 major travel blogs: Thrifty Traveller (who originally reported this), One Mile at a time, Enilria and View from the Wing.
I'd hardly call it people complaining about something they don't have a clue about.
This pricing practice of charging more for solo travellers is new, deceptive and even travel bloggers who are thought leaders are upset by this.
It would be weird to specifically advertise this. Unlike say, buying a second pair of shoes - not many people will buy an extra plane ticket to save 30% off both.
That was kind of the premise of a movie I watched last night where a couples retreat offered a group discount for 4 couples or something.
So I could see it being "Bring your friends for 30% off!" being a cool summer promotion to beach destinations or something.
With something like airfares, the business is still doing its half of negotiations: collecting bits of data about the buyer to determine a price; but, crucially, there’s no real way for the buyer to “talk back” and so the process seems arbitrary.
Not really. The "negotiation" is still there. Time limited discounts weed out consumers who need something immediately. Coupons weed out people who aren't willing to put the legwork to find them. Loyalty programs and app-based offers (eg. McDonalds) take all of this to the next level by sending targeted coupons based on whatever demographic/behavioral information they can glean from you.
Retailers often have weekly sales. If that's not "routine" what is? Is it only "negotiation" if it's happening on a per customer basis? Moreover apps with targeted offers is literally doing that. The company is assessing a given customer's willingness to pay, possibly on a daily basis, and sending offers/coupons in response.
I never argued it's not price discrimination. In fact I was arguing the opposite, that price discrimination is the same as "negotiation", and it's alive and well in modern times. It might not be "negotiation" in the sense there's two parties going back and forth, but the end goal of negotiation is price discrimination. If coupons and apps do the same thing, does the fact that you're not talking to a salesman really matter?
The same way they have been observed to offer higher prices to iPhone users at times
They come up with schemes to rake in money based on market segmentation they run numbers on and have their booking systems setup in a way to make price comparison "difficult" for a normal user.
You can't advertise prices that constantly change.
My theory is that most same-day travel is for business, and businesses are far less price-sensitive than consumers and will just pay whatever.
I suspect this is what's going on here. Most solo travellers are for business, not consumers for holidays. The price difference here is huge – almost half – which is far beyond a bulk discount, we're talking about 1 person vs 2 people.
That's also why none of this is advertised: it's not a discount, but a "we think you can pay more, so we'll charge you more" type of thing.
Is that a good/bad/ethical/predatory thing? I don't know. Leaves kind of a bad taste for me though.
Without price discrimination, there is one price, and then there are two triangles "left" of the price: What consumers would have paid, but don't need to, that's the consumer surplus (between price and demand), and what producers would have sold for, but got more for, that's the producer surplus (between price and supply).
With price discrimination, what happens is that the producers "grab" some of that consumer surplus for themselves (as "price" is not a horizontal line anymore, but gets closer to the demand line).
So this is bad for consumers, good for producers. However, the producers can use the surplus to subsidize products for poorer consumers, so that a higher quantity of goods is sold.
Having said that, the airline market is very weird (oligopoly character, very perishable goods, ...)
First off airlines are an extremely low margin business.
AA's net margin is 1.26%, Delta's net margin is 5.91%, United's net margin is 6.43%, Alaska's net margin is 2.86%. These aren't exactly blockbuster SaaS numbers.
Demand and competition absolutely drive price reductions - competitive routes have much lower revenue per available seat mile - and adjusted for inflation air travel is wildly cheaper than it used to be. Since 1995 the cumulative inflation-adjusted price of domestic air travel is down almost 37%. [1] Thanks to competition you can fly from SFO to NYC for $99, non-stop, next month. On the other hand SFO to GUM is $1662 ($1100 on a half round trip basis), because there's no competition.
Airlines with both a domestic and international route network tend to lose money on their domestic routes and make up for it on their flagship international routes, but even still, they make most of their money on frequent flier programs and credit card relationships.
St Louis Fed has a good write-up on the economics of air travel. [2]
[1] https://www.bts.gov/content/annual-us-domestic-average-itine...
[2] https://www.stlouisfed.org/publications/page-one-economics/2...
It feels more like a test of a strategy to fill middle seats.
Minimum stay durations, like advance purchase restrictions, are a common part of fare construction.
> That's also why none of this is advertised: it's not a discount, but a "we think you can pay more, so we'll charge you more" type of thing.
A surcharge for X vs a discount for ~X is the same thing, it's just how it's presented.
Technically all of this is advertised, it's published in GDS. People just don't really want to read the fare rules because it's boring and a ton of reading.
I don't know how a normal person would have access to any of them. They're described as being offered via subscription to businesses.
https://www.bookingninjas.com/blog/gds-system-top-reasons-wh...
[edit] You can probably see them on ITA Matrix too, I can't remember.
It is a natural result of our economic system. Economists call it "extracting consumer surplus," and there are several mechanisms companies employ to get the population to pay them the maximum amount of money. Airlines indeed use the information they have about you and the flight you're booking to guess the maximum amount you'll pay- and that's the price they show you.
Obviously we, as consumers, feel taken advantage of because we wish we could pay less (and keep the surplus to ourselves). But this is going to happen in any capitalist system.
Econ101 says it’s a bad thing because of the deadweight loss occurring versus a single market price.
It also arrogates a lot of consumer surplus to the producer (the airline), which many would argue is bad from an ethical and inequality point of view.
It happens in every car dealership. And in enterprise sales. And in some countries in nearly every market and store.
This list of practices may sound like “shitting” on the companies but is just that - a list of their normalized practices.
You go to a bakery and he charges more because you wear a suit. You go to Europe, a guy in front of you buys a bread for €1, but same bread is €3 because you are tourist? Then you go to buy a toilet paper and same thing happens again because your ass is worth more?
Anyone being upset about this is just looking for reasons to be upset and maybe should go outside more and get a hobby.
Aurornis•1d ago
People will look at this as penalizing single travelers and want everyone to have the lowest fare, but that’s not the real alternative. A flat fare would bring solo prices down and group rates up so the blended average is the same.
n8cpdx•1d ago
Traveling solo essentially costs double automatically because of lodging, and it kind of sucks there’s a double whammy with airfare where, unlike lodging, the penalty doesn’t actually make any sense.
I guess as a family be grateful that all hotel rooms come with a 50% (or more) discount per traveler?
growlNark•1d ago
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aaomidi•1d ago
I’ve regularly seen larger cars with more capacity equal to medium sedans.
tshaddox•1d ago
dowager_dan99•1d ago
AlotOfReading•1d ago
frank_nitti•1d ago
Otherwise can’t one just rent the room as a solo guest, and just have someone come through later, as long as there isn’t an obvious group activity going on inside the room?
sjf•1d ago
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sidewndr46•1d ago
You can make the argument that airlines are companies that sell in flight beverages and also happen to fly a passenger airplane. The actual profit comes from an unusual sources, like deals with credit card issues for a "rewards" program that gives you frequent flyer miles
dlisboa•1d ago
Most of the more profitable markets have high competition not only by other airlines but also other forms of transportation. Very few airlines are swimming in cash and even those are only a couple bad years away from bankrupcy.
authorfly•1d ago
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marcosdumay•1d ago
Personally, I do argue that it's worth it having tickets 10% more expensive and forcing the companies to always allocate all passengers, treat people humanely and etc. It's even worth it the 25% increase to make them let people carry luggage and avoid all the troubles that come with the optionality. But most governments seem to disagree.
umanwizard•1d ago
You are asking for people who fly without checked luggage (as I usually do) to subsidize you.
marcosdumay•8h ago
Anyway, the fact that you just assumed I personally fly with luggage is weird.
os2warpman•1d ago
Most people are ok with terrible service because they save money.
Doesn't stop them from complaining, though.
And yes, "cheapest" includes taxes and all fees.
You can fly from New York to Paris non-stop for $150 if you are patient and flexible. (Please please please call me a liar.)
If you are not patient $500 is more typical.
Twenty years ago was a $800 ticket.
Thirty years ago that was a $1000 ticket.
authorfly•1d ago
And you are not a liar - but your claim isn't true at all in Europe - see increased per-flight legislated fees and the loss of budget airlines. Price of flights between 2 destinations has increased by 25-40% in the last 5 years in most of Europe.
Thanks to efforts like increasing the per-flight fees "because of high inflation" (these fee increases are still going up several years later): https://www.nationalgeographic.com/travel/article/why-travel... and loss of airlines like Flybe.
You can still get the madly cheap hop flights, but they are often pricing in income from our flights (or accepting even negative returns by pricing above the per-flight fees) because the planes need to be where you are going to fly a profitable flight later.
So the old status quo where genuinely cheap flights could be booked on a 7 day basis (e.g. cheap thursday-thursday flights) has been replaced by convoluted patterns to get the cheap flights (you usually need to leave on Monday, return on Saturday (if your source airport has lower demand than the destination) or vice versa. I suggest based on flights in the US becoming cheaper, that this is due to government intervention.
I get saving the environment and all that. But let me pay more taxes monthly, don't charge the airline £15 minimum making a bunch of flights unviable. Don't make booking a holiday or conference flight so unpleasant and annoying. I always have to tradeoff wasting a day or two with paying 50-150 euros extra.
It's not the worlds biggest problem, but making that decision is a regular additional dilemma I didn't want in my life. I wish for the days when you could get just normal timetabled flights at good costs if the month (e.g. February) was unpopular for travel. Now those months really aren't cheaper.
tredre3•1d ago
os2warpman•1d ago
Round trips in September are $386-500 depending on the day and duration of the stay. The $386 fare was for a tuesday-to-tuesday week stay and I might just take it, I will be bumping up against use-or-lose limits for PTO by then. There are fewer crowds in September and the weather is really nice.
https://imgur.com/Wn43raL
os2warpman•1d ago
With exceptions, once you have paid for a ticket all commercial passenger airlines are obligated to transport you under their contract of carriage.
All airlines must do this, I even looked up the contract of carriage for the shittiest airline I could think of and Frontier has this to say:
>Involuntary -- If insufficient passengers volunteer, passengers who cannot be accommodated on the flight will be denied boarding and Frontier will provide transportation on a Frontier flight to the same destination. After a passenger’s boarding pass is collected or scanned and accepted by the gate agent, and the passenger has boarded, a passenger may be removed from a flight only for safety or security reasons or in accordance with Section 3 of this Contract of Carriage.
They must also compensate you. If being denied boarding delays you for 1-2 hours you get 2x the cost of the fare up to $1550 and 2+ hours 4x up to $2150.
And they still have to put you on a plane:
>A passenger denied boarding, voluntarily or involuntarily, pursuant to this section, will be transported on Frontier’s next available flight on which space is available and at no additional charge.
https://www.flyfrontier.com/legal/contract-of-carriage
Contracts of carriage are pretty much boilerplate but all of this is to say: if you pay, show up on time, and aren't denied boarding for a safety reason airlines are obligated to transport you to your destination.
(in the US)
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sidewndr46•1d ago
greenavocado•1d ago
It's true that airlines wield pricing power but their Contract of Carriage, buried under more fine print than a payday loan agreement, does impose obligations. Rule 21 of United's Contract explicitly allows refusal of transport, but Rule 4 confirms that a ticket with a confirmed reservation constitutes a binding agreement to provide service, absent violations by the passenger (like failing to check in). Rule 25 further mandates denied boarding compensation when overselling occurs, because even in brutal airline economics, a confirmed reservation isn't merely a suggestion, it's a contractual commitment, however creatively airlines may interpret "commitment." Of course, involuntary bumping, force majeure, and the ever-convenient "operational decisions" let airlines off the hook. But to claim they have no obligations is not true.
al_borland•1d ago
I’ve seen a couple where they have a few solo cabins, but the amount of effort to surface this stuff turns me off to the whole thing.
The only reason I’m still half looking is that it seems like the easiest way for a random person to set foot on Antarctica, which would be a cool thing to check off the bucket list.
duped•1d ago
ghaff•1d ago
Cruises are probably more complicated because they price things other than your cabin into the "experience." (Though I think the Queen Mary 2 a few years back was slightly less than 2x for just me.) But the random Marriott doesn't really care if there is one of you or two when it comes to pricing.
MichaelZuo•1d ago
I imagine 2 people use roughly twice the bedding, towels, toiletries, etc., on average.
ghaff•1d ago
decimalenough•1d ago
You can easily verify this on Booking.com, where the search results show price per room and how it varies based on how many people are in that room and whether they're adults or children.
ghaff•1d ago
ahtihn•1d ago
sgerenser•1d ago
losteric•1d ago
mgkimsal•1d ago
I'll say over the years most places do not respect the "if the towel is not on the floor don't replace it". I'm fine with reusing a towel to dry off twice, but some hotels change them every day, even when their signage is indicating a protocol to prevent that sort of waste.
al_borland•1d ago
Maybe that's the problem. Cruises rely on people spending a lot of extra money onboard the ship, or drink packages, nicer dinners, excursions, etc... fewer people doing that, with less social pressure to spend extra, means less money for them and they have to make it up somewhere.
mmcconnell1618•1d ago
desert_rue•1d ago
Also the more people on the ship means more chances of selling high margin add ons like drink packages, excursions and so on.
onlypassingthru•1d ago
also: be sure to make offerings to the sea gods before sailing because crossing the Drake Passage can be... exciting.
jltsiren•1d ago
When I went there, I booked the cheapest bed (maybe $6500 in 2013) in a three-person cabin. It was early season and the ship wasn't full, so the company filled it with backpackers waiting for last-minute discounts in the hostels of Ushuaia. Because I had paid the full price, they upgrade me two classes to a much nicer two-person cabin. And then halfway through the trip, the ship delivered some staff to a museum. The other guy got their cabin, and I got the one we had shared.
jajko•1d ago
Cruises are for folks, how to say it politely... who gave up on any form of adventure or excitement in their lives. Dont be that person, not yet at least.
QuercusMax•1d ago
There were quite a few solo travelers we met on the cruise, though - I think they mostly had solo inside cabins with no view.
Ekaros•1d ago
reliabilityguy•1d ago
Mistletoe•1d ago
tshaddox•1d ago
mrmanner•1d ago
reliabilityguy•1d ago
You can always stay in Motel 6 for $20/night.
authorfly•1d ago
Frozen > 5kg or so?
patcon•1d ago
Hostels are for this market, no? Share physical infra (bathroom/heating/walls) with other humans (aka strangers) and you get the same family discount. You're not obligated to pay the premium unless you want your own bathroom and own personal space like families tend to want
As in: families don't get a discount, they just amortise the cost of privacy that you also seem to specifically need/want. but many solo travellers don't care to pay for that.
kaikai•1d ago
growlNark•1d ago
But if you're traveling with your family, just get hotel rooms. Hostels only came up in the first place in response to a gripe about solo travel.
chgs•1d ago
n8cpdx•1d ago
tshaddox•1d ago
ghaff•1d ago
TheOtherHobbes•1d ago
Most single people own and sleep in double beds, so there's no sense in which a double bed is "designed to accomodate" two travellers.
The issue is more that discounted single room rates would encourage unofficial double stays, which would lose significant income.
tshaddox•1d ago
chgs•1d ago
tshaddox•1d ago
eCa•1d ago
I often book a double for myself (often for the same price or €10 more) for a bigger bed.
chgs•1d ago
soperj•1d ago
garciasn•1d ago
1. I don't want to stay in a hostel. See below for more on this; but, hostels, at least the ones I have researched, have bunk rooms and shared facilities. Hard pass for me.
2. I don't like sharing a bedroom and, especially, a bathroom in someone's home when they may be there. There's simply a different level of security (potentially false, I understand) in a hotel vs a rented room in a house.
tshaddox•1d ago
garciasn•1d ago
jeremyjh•1d ago
tshaddox•1d ago
garciasn•1d ago
dlisboa•1d ago
AStonesThrow•1d ago
"Hostel" may mean different things in different parts of the world. When I was growing up, I heard about "youth hostels" that were mostly in Europe and mostly providing inexpensive accommodations to college-age people who were backpacking through the continent or had a Eurail Pass for traveling, etc. But I have never stayed in one.
When I surveyed a few hostels in Hollywood, it seemed that they were indeed targeting college-age people. Furthermore, they were cultivating a "package deal" atmosphere where there were day trips and coffee hours and programmed activities, for residents to do while they were there. And with limited privacy and shared facilities, there could be bustling activity and interruptions of sleep all night long. They did not seem like places to check in, crash overnight and leave in the morning. And that is probably calculated to appeal to the clientele who are not homeless and did not simply save up $40 by panhandling during the past week.
andix•1d ago
The cost for the hotel and Airbnb doesn't really change a lot, if there is more than one person staying in the room. More or less another set of towels and a bit more soap. Even providing rooms with single beds only brings down the costs marginally.
anigbrowl•1d ago
I'm pitching the movie to the Hallmark channel right now.
the_third_wave•1d ago
mmustapic•1d ago
Travelling with somebody else brings costs down. Hotel rooms have the same surface for single and double occupancy (in fact they are usually the same rooms!). Even if you remove the surface of one single bed, the room stays almost the same. So, it’s much cheaper for 2.
bdangubic•1d ago
pwim•1d ago
33MHz-i486•1d ago
DINK > Solo >> anything else
alexey-salmin•1d ago
This is not always the case. A two-bedroom hotel suite on average costs more than two standard rooms. This happens because the vast majority of rooms are twin/double and cheap hotels often don't offer suites at all.
At a given location two travellers would be chosing from e.g 100 options and at least some of these would be budget/discount offerings. In the same location a family of four would have to chose from 10 options and likely none of them are budget/discount.
Now consider that you HAVE to travel during the school holidays so competition for these damn 10 options increases and the price for both hotels and tickets easily goes up 2-3x.
There are some situations where a family of four would get a better price per person but most of the time it's the other way round.
Aurornis•1d ago
It comes out of the family budget either way.
Matheus28•1d ago
atonse•1d ago
But for the benefit of this debate I'll state my bias. Almost all my travel is as a group.
But in most other facets of life, we save by buying more, right? (buying wholesale, buying bulk, etc).
So I've actually had the other feeling... if I'm buying 4 tickets at once, can I get a bit of a volume discount? And I'm not sure that's what the airlines are doing here (I don't ascribe any altruism, it's probably more that families were getting cold feet with increasing prices), but I like that I get some kind of cheaper rate when I'm buying 4x of something, just like in just about every other purchase in life.
SecretDreams•1d ago
dlisboa•1d ago
DSMan195276•1d ago
You can also get screwed in the other direction where groups are more expensive - airlines will sometimes bump every ticket in a group to a higher fare level even if they still list one or two tickets at a cheaper price for smaller groups.
darth_avocado•1d ago
1. Higher taxes and fewer deductions 2. Higher workplace performance expectations 3. Higher costs in every aspect of life 4. Fewer options eat out, expensive solo tickets at events etc.
This is just one more example in a long list of examples of how being by yourself is penalized in the society.
nemomarx•1d ago
darth_avocado•1d ago
chrisweekly•1d ago
ghaff•1d ago
ghaff•1d ago
AlotOfReading•1d ago
prerok•1d ago
chgs•1d ago
brandall10•1d ago
Obviously that's a pure economic thing you can't get mad at as tables are designed for 2+ and you're trying to get in during a high traffic time.
SamBam•1d ago
...except for the average $300,000 cost of raising a child in the US. That one would seem to rather balance out all those others.
IshKebab•1d ago
1. Taxes are more punishing because you're spending half your disposable income on children, and most of it probably comes from one earner. You can say "don't have children if you can't afford it" all you like, but you wouldn't be alive if nobody had children, so it's quite selfish of anyone to be anti-children.
2. For men performance expectations are the same but now you have to somehow simultaneously be at work and also pick up your children from school at 3pm. Oh and don't forget you have to somehow cover like 80 days of school holidays a year. For women... well you can legislate that being off work for 2 years doesn't matter all you want; in reality it is a major disruption to careers.
3. Childcare is far more expensive than any increased cost I experienced for being single, with the possible exception of not being able to share rent with a partner. But once you have children... rent for a family is more than double rent for a one bed flat.
4. Yeah price me up a skiing holiday for a family of 4. Now do it for a single person (and double it if you like).
The very reason that discounted family tickets exist is that families wouldn't buy any tickets otherwise because they would be too expensive. It's the same reason student discounts exist. It's called price discrimination.
I do agree it's pretty annoying and feels unfair though. The optimum group from a price point of view is really a couple, not a family.
hypeatei•1d ago
It gets into philosophical territory, but the default "having a pulse = good" thinking is pretty shortsighted IMO. Life is inherently suffering and no one got a yes/no prompt before being born.
dlisboa•1d ago
layer8•1d ago
dlisboa•1d ago
hypeatei•1d ago
Obviously ideas like yours are ingrained into us at a biological level and it logically makes sense if we want to survive as a species... but there is no inherent reason other than "just because" right?
dlisboa•1d ago
It's a strange thing of nature and evolution that it creates a species that can plan and execute its own intentional suicide.
IshKebab•1d ago
Also... it's not society, it's the human species.
glitchc•1d ago
scienceman•1d ago
mike_d•1d ago
It is amazing how blatantly people will just admit "I agree with politics that benefit me even if they exclude others."
> Taxes are more punishing because you're spending half your disposable income on children
I probably spend on my dogs what you do on your children. Gosh life sure is hard because of my decisions. Where are my discounts and tax refunds?
> It's called price discrimination.
...and when is discrimination ok? Lets all say it out loud.
IshKebab•1d ago
Dogs are not people. Society does not rely on the continued existence of dogs. Do you see any governments enacting policies to make people have more dogs?
> when is discrimination ok?
When it makes things more moral/fair. Do you object to student discounts? Progressive taxes? You seem to be having a knee-jerk reaction to the word "discrimination". It's also called "price differentiation". Maybe that sounds less bad to you?
chgs•1d ago
al_borland•1d ago
If someone were to buy 3 tickets, it could just as easily leave an orphaned seat.
ghaff•1d ago
al_borland•1d ago
tuckerman•1d ago
I guess it's all relative, lower taxes for A compared to B looks like higher taxes for B compared to A, but I suspect most of this comes from a) incentivizing people to form as many families w/ children as possible and then b) since there are so many families w/ children, people build businesses that assume most people will be in families.
tshaddox•1d ago
tuckerman•1d ago
I still think of it as incentivizing in the same way the EV rebate helped encourage me to buy my first EV, even if the cost of the car still was more than I would have been willing to pay for an ICE car. It made a difficult thing (slightly) less difficult.
authorfly•1d ago
To get on the ladder today, 5 years sharing rent is priceless. Then once you do, you get child benefits. Many people are single late in life too. So I don't think it's something you can equate.
4ndrewl•1d ago
neutronicus•1d ago
When a 25-year-old lands a senior role in 10 years at 35, it's because someone else's 13-year-old grew up, graduated college, and got hired as a junior. Promotions are 10% Crushing It, 90% dumping your grunt work on some poor sap too young to know better.
Society is a pyramid scheme, and, like all pyramid schemes, bringing more people in is ultimately more valuable than actually selling the LuLaRoe or whatever.
silisili•1d ago
That said, I have to imagine the reasoning behind it having to do with assuming some large percentage of solo travelers are on work expense trips, so squeezing the company for a few more dimes. The article assumes as much -
> It's just another way for airlines to continue “segmenting” their customers, charging business travelers paying with a corporate card more while offering a better deal to families on the exact same flight.
A lot of companies I've worked for don't even do corporate cards, they just tell you to pay for it and submit for reimbursement.
All of that rabble out of the way, it feels like it would be impossible to identify business vs leisure customers up front, so it sounds like solo leisure travelers are caught in the crossfire.
blharr•1d ago
> A flat fare would bring solo prices down and group rates up so the blended average is the same
So... it is penalizing solo travelers?
BoorishBears•1d ago
A solo traveler can decide to take a trip because they saw a good fare very trivially: you're not going on a trip with 2 days notice just because a fare "tipped the scale" when you need 10x the planning and logistics, and the airlines know that.
They're not doing it to entice families to travel, they just know solo travel is associated with higher incomes and want to extract more money.
carlosjobim•1d ago
...is of course great when you personally are on the side benefitting.
criley2•1d ago
Companies offer bulk discounts on basically... everything.
This is like pointing out that the Dollar Store penalizes people for buying small quantities and thus suggesting that Costco should raise prices to "make it fair".
mike_d•1d ago
If they were willing to sell me 5 flight coupons for a discount, that would be acceptable. There is nothing I can do as an individual to take advantage of the discount.
criley2•1d ago
By your logic, Costco is also "discriminating based on marital/family status" by selling bulk at discount. Costco doesn't sell "buy 1/5 a toilet paper package, come back and get the other 4 1/5 later". They sell the whole package up front, use it or lose it.
That's how bulk discounts work.
Heck, you could say that a gallon of milk discriminates against you because you have to pay way more to buy a pint of it, and you can't "come back later for the other pints at the same price".
This is absurdism to the highest degree.
You are welcome to book flights with friends, or even organize a flight-share program and go in on flights with strangers. Bulk doesn't discriminate. I know folks who go in together on Costco bulk because they can't use it all. Make the system work for you.
miltonlost•1d ago
So it’s still penalizing being single. Single travelers are subsidizing group rates. They are being penalized for not buying multiple. You didn’t explain how it’s not a penalty to buy as one person
popalchemist•1d ago
One way or another, this increases profit for them.