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For What It's Worth

Michael Rushton on pricing the arts

Scaling the airplane

June 17, 2013 by Michael Rushton Leave a Comment

My legs have gone numb!In my previous post I wrote about companies offering superior levels of service (for a price) that necessarily involve making the service worse for other customers, such as offering a deal that allows high-paying customers to cut in line where there is a queue. Here is another example.

Airlines are trying to further price discriminate in seating. The old model of simple differentiation between business and coach class is giving way to finer gradations in the coach section, where passengers can pay for extra legroom. But just as there is no such thing as a free lunch (and certainly not on airplanes!), neither is there such thing as free legroom. The Economist reports:

BANKRUPT American Airlines, which is in the midst of joining with US Airways in what is expected to be the last big merger of American carriers, has announced plans to add more seats to its Boeing 737s and McDonnell Douglas MD-80s. Mark Gerchick, who worked at the Federal Aviation Administration (FAA) and now writes books about air travel, told National Public Radio last week that two decades ago flyers could expect about 34 inches  (86 cm) of legroom in economy; the standard is now around 31 inches, with some airlines going as low as 28 inches. That 28-inch number “is now approaching the limits of anatomical possibility,” Mr Gerchick said.

… Most modern economy cabins include economy-plus seats with extra legroom, which reduce the space available to other passengers. American claims that some of the 2.5 inches lost per passenger will be made up in slimmer seats, but business travellers who are unlucky enough to find themselves in economy should delay judgment until they actually test out the new seats.

A few trends are pulling in opposite directions here. On the one hand, you have the increasing commoditisation of economy-class air travel, with even full-service airlines such as American trying to cram as many passengers into the back of the plane as possible. On the other, you have airlines’ desire to up-sell to customers who are not prepared to pay for business or first class. Airlines are happy to offer smarter service to passengers—but only in return for a fee. The era of one-size-fits-all coach cabins is over. People hate paying fees and, for some, the annoyance of paying them can offset whatever extra comfort they provide. But they do put more of the travel experience in your control.

Selling extra legroom for some seats means either less legroom or less seat width on other seats. Your blogger is six-feet-four, and indeed the ordinary cabin seats seem to have reached some kind of minimum for legroom! What airlines are doing differs from a concert hall seeking to increase the number of zones for ticket pricing, since that involves solving what people are willing to pay for different quality of seats without actually making the cheaper seats worse from an audience perspective.

 

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Michael Rushton

Michael Rushton taught in the Arts Administration programs at Indiana University, and lives in Bloomington. An economist by training, he has published widely on such topics as public funding of the … MORE

About For What It’s Worth

What’s the price? Everything has one; admission, subscriptions, memberships, special exhibitions, box seats, refreshments, souvenirs, and on and on – a full menu. What the price is matters. Generally, nonprofit arts organizations in the US receive about half of their revenue as “earned income,” and … [Read More...]

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