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.
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, ...)
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.
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 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.
It can be an equitable thing as families traveling usually have less income per head than individuals.
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.
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.
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.
You can't advertise prices that constantly change.
This list of practices may sound like “shitting” on the companies but is just that - a list of their normalized practices.
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.
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.
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.
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.
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.
Which is adjacent to: Nearly everyone loses, because the house knows the odds and controls the terms and conditions of the rewards.
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.
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.
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.
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…)
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.
But someone should totally make a site for finding strangers to book the same flight with :)
Otherwise I would buy seats for my personal helium balloons on either side of me.
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.
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.
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).
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.
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?
- 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.
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
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.
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
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.
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.
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.
You used to see "surcharge for visa" but visa made that illegal.
So now you see "discount for cash/debit", and everyone is happy!
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.
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.
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.
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.
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?
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.
Anyone being upset about this is just looking for reasons to be upset and maybe should go outside more and get a hobby.
Larger groups are more price sensitive. They should pay less because they have more buying power when they buy ahead.
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.
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.
This isn't strictly true. Airlines have long offered bulk pricing through travel agencies and booking partners.
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.
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.
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.
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.
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?
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.
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.
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.
I'm pitching the movie to the Hallmark channel right now.
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.
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.
It comes out of the family budget either way.
> 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?
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
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.
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".
One way or another, this increases profit for them.
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.
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.
...is of course great when you personally are on the side benefitting.
(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)
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.
