

Airline classes as wealth redistribution - simonb
http://www.spectator.co.uk/life/the-wiki-man/8993411/never-seen-the-need-for-a-class-system-take-a-long-haul-flight/

======
JPKab
Let's not forget the social effects of the class system. What better way to
destroy social cohesiveness than this? Its similar to public schools without
uniforms.

Within my rural, southern public school system,I was clearly marked out in the
southern caste system as "white trash" in school because I wore $15 canvas
sneakers rather than $60 name-brand shoes, jeans and t-shirt rather than polo
shirt and khakis, etc.

In the adult world, the caste system still exists in a rather potent form:
dating. If you are a man who is marked out in some way as earning less, you
will get significantly less attention from women in general. The OKCupid data
has confirmed this effect for men over the age of 23, and it is a very potent
one.

~~~
eroded
But what are the alternatives?

1\. True segregation where the rich go to a separate school all-together /
have separate planes, etc.

2\. Everyone wears the same lowest-common denominator clothes / travel in the
same travel class?

Each of these alternatives is economically inefficient, and the poor suffer
more as a result as their fares cease to be subsidised by the rich.

I'd rather fly $500 return to Tokyo, because some rich guy upfront is paying
$4000 for a flat bed, than pay $2000 because some left-wing loon demands
everyone has the same class of travel.

~~~
reeses
"I'd rather fly $500 return to Tokyo, because some rich guy upfront is paying
$4000 for a flat bed"

NB: I'm 40 and didn't have these issues when I was younger/fitter/elasticker.

I pay $10k+ for a flat bed to Asia because I find that I can be off the plane
and ready for a meeting the next business day, with no need to take an extra
day or two on either end. Little seats that don't recline _all the way_ are a
recipe for back pain, neck pain, or just general low-grade misery, as if air
travel isn't annoying enough. It's not really about "rich" (although I'm glad
I have the option) but more about productivity and not losing time. The same
thing happened with Saturday stay-overs on round trips (I don't know if they
still do this) or one-way tickets being as or more expensive than round trips,
because business customers often prefer to be home on weekends.

All that said, I generally book business and upgrade myself to first, so I'm
not feeling the full $10-15k pressure myself. Also, I only book international
first on vacations, when it's miles/points anyway, for which the spendy fares
help out a lot.

Plus, I really don't want to fight with 500 people over two toilets. That gets
more important when you get old. :-)

------
codva
The author Rory Sutherland is vice-chairman of Ogilvy Group UK.

I don't think we want the ad guys determining the pricing structure for
airlines. Anyway, the reason for the wacky pricing on airfares is not some
sort of implicit agreement to be socialistic about it. It's because the fixed
costs associated with the flight are so high. It costs virtually nothing to
add another person to the flight. Airline fares are a dance between filling up
the flight while maximizing the average fare per seat. Price too high and you
fly with empty seats. Price to low and you fill up but leave money on the
table.

~~~
ganeumann
Odd sort of ad-hominem. The pricing structure of airlines certainly wasn't
determined by ad execs. What he points out is that it isn't so bad: it does
much better at maximizing utility than having all the seats the same and most
of them more expensive.

His point was that if the airline pricing system is not so bad (and I'm not
agreeing with that), then having it apply to other high fixed cost, low
marginal cost things--like his daughter's bus--might also not be so bad.

Of course, the example of his daughter's bus makes me wonder if the whole
thing isn't tongue in cheek and I'm not getting it because I'm not British.

------
grecy
I live in the far North, and recently flew down to Toronto, my first time
"leaving" in over a year.

Of all the things that struck me about "The world", the number one thing was
the "class system" that the airlines tried to impose. At every check-in
counter there was a little sign saying economy on the right, business on the
left. For the four flights I waited for an eventually got on, I heard the
airline announce on the PA, at least 5 times each "Economy stay on the right".

I never did see a single person line up and get on from the "left" line.

It occurred to me, the point of separating the lines was not so that the
business passengers would have a faster/better experience, it was merely used
to remind the rest of us exactly where we sit on the class ladder: The Bottom.

~~~
ubernostrum
_I never did see a single person line up and get on from the "left" line._

About all I can say to this is "fly more often" or "fly on more airlines".

United, for example, has been restructuring their boarding process for a
while, precisely to try to maintain some semblance of order -- too many people
crowding the gate area before their group is called, trying to sneak on to the
plane early to get access to overhead bins, etc.

(and typically, a separate-lane process is intended to avoid that -- most US-
based airlines have basically given up on the idea that they can get an
orderly boarding process by assigning groups based on row number, and have
switched over to using the multi-lane system)

------
dnautics
The author is clearly confused about libertarianism - as a libertarian, the
points he's making are very 'no duh', and the characterization of the 747 as
'socialist' is odd (libertarians advocate for this sort of redistribution -
and even less _materially mutual_ beneficial redistribution - i.e. charity -
all the time) but aside from his ham-fistedness about 'voluntary
redistribution', it's a very eloquent and well-done article. I don't know
about thrones in school busses, though.

~~~
malkia
He is from UK, and the meaning of the certain words that start with liber-
begins to differ significantly across the atlantic.

~~~
dnautics
ah. Good point. Do they still have libertines there, though?

~~~
James_Duval
Not only do we have libertines, we have _the_ libertines.

------
justinsb
The Paris metro did have 1st and 2nd class sections, but ended them in 1991
[1]

The London underground did as well, but ended them in 1940 during/because of
the war [2]

In Paris, it seems that demand fell to non-sustainable levels. This was after
enforcement stopped though, which seems like it could be a rather classic
example of the free-rider problem!

1:
[http://articles.chicagotribune.com/1991-05-12/travel/9102110...](http://articles.chicagotribune.com/1991-05-12/travel/9102110973_1_first-
class-second-class-paris-metro)

2:
[http://en.wikipedia.org/wiki/London_Underground_O_and_P_Stoc...](http://en.wikipedia.org/wiki/London_Underground_O_and_P_Stock)

------
brnstz
This article conflates the ideas of pure price discrimination (where goods are
identical) and premium pricing (where they are not).

No one is better at this than the travel industry. Remember that story about a
travel website showing higher prices to people with Apple User-Agents? Yup.

If a restaurant wants to charge $1,000 for a premium cheeseburger on the off
chance some rich person wants to distinguish himself, well, that's weird, but
that's capitalism.

But if this "software" were to read everyone's mind and calculate exactly how
much they are willing to pay for any good at any time, consumers will get
fleeced.

~~~
rayiner
The article is deeply confused as you point out. And you're right, since the
effect of price discrimination is for producers to capture consumer surplus,
you don't want that mind reading machine.

------
Patrick_Devine
The notion that little Johnny needs to sit at the back of the bus on a hard
seat while little Sally is upfront ensconced in a tufted, leather wrapped
throne is beyond ludicrous. I wasn't sure if the author was was being serious
or making some kind of Swiftian satire. There's nothing like reinforcing a
centuries old class system to grease the wheels of social cohesion.

~~~
eroded
He was not seriously advocating such a system, merely saying that such a
scenario would be the only way to get the richer parents to pay more, ala the
airline model. Otherwise it's a simple act of charity.

------
levosmetalo
The author of the article explains his point clearly, and in a way it makes
sense when looked at it from that perspective.

I'll offer another, more pessimistic perspective. He assumes that the users
paying more will get extra service, while service level for the rest will stay
the same. But, it's almost never the case. In practice, the level of service
for regular price will just go down, and service providers will start to
charge even for something that was free, or available at lower cost before
this service differentiation started.

------
guard-of-terra
"If the first two carriages in each train cost three times as much as the
others but offered free Wi-Fi, and were furnished not with basic seats but
with the sumptuousness of an Edwardian-era New Orleans brothel, you could
afford to run more trains."

You don't have enough trains in your subway? That's strange. It's supposed to
be rapid transit isn't it?

~~~
tekacs
If we in the UK have limits on the number of Tube[1] trains run in a given
period, they're for safety or 'incredibly low number of passengers' (depending
on where along the line you are) and really not finance reasons, to the best
of my knowledge. The point is pretty moot.

[1]: He has to refer to the Tube, as National Rail already has classes not
unlike as described. :P

~~~
blibble
the tube runs at full capacity in central sections at peak times.

on some lines you even get a train entering the platform while the previous
train is still pulling out!

------
crazygringo
> _My contention is that it should be possible to devise software which solves
> this problem: everyone secretly reveals what they would be willing to pay_

Riiiight. And what on earth is going to convince the wealthy folks to type
"$100" into the system instead of "$3"?

> _How can you avoid people gaming the system? The price each parent pays
> could theoretically be kept confidential, but in reality would not remain
> so._

What does that even _mean_?

~~~
UVB-76
_> What does that even mean?_

A sealed bid auction is all fun and games until participants voluntarily
disclose their bids to other participants.

------
driverdan
The author completely overlooks complementary upgrades for frequent flyers.
Frequent flyers are the lifeblood of the industry but not because they pay for
a higher class level. They earn the higher class level for free by making many
lower class level flights. On domestic flights very few first class passengers
are paying extra. International is different but still has a large number of
free upgrades (depending on the airline).

~~~
eroded
s/complementary/complimentary

This is a fairly edge case, that only really occurs on US domestic flights.
The majority of the world's frequent-flyer programmes do not give space-
available upgrades in the way that say American or United do domestically.

The vast majority of those travelling in premium cabins (or their employers)
paid cash for their ticket.

~~~
davewasthere
Admittedly my airline experience is not with US airlines, but space-available
upgrades for our valued frequent fliers are very common in the rest of the
world.

~~~
eroded
Care to give an example? I am not aware of a single programme outside of the
US that offers this.

------
aredington
In practice, Southwest airlines has one class of passenger. Everyone rides in
steerage, but you can pay a little extra to jump at the front of the line and
pick your favorite steerage class seat. They're able to operate profitably on
a fairly consistent basis, this author is postulating a necessity that does
not exist.

~~~
rblatz
And I personally hate flying Southwest and avoid it if at all possible. Not
only have I on multiple occasions bought a cross country first class ticket
from Delta for less than Southwest's Wanna Get Away fare, but I almost always
find US Airways and Delta offer cheaper fares than them. Plus I don't have to
deal with the frenzy rush of pick you own seat, I feel like it's a bunch of
cattle being wrangled into a plane.

~~~
skilesare
I cannot comprehend this comment. I'v never seen a ticket for less on delta
and the efficiency of boarding a SW flight blows anything away that I've seen
on other carriers. Maybe this is a cross country issue. I usually fly shorter
routes...I don't even know if southwest has flights that go cross country that
don't have 3 or 4 stops....that might account for the higher price. For
getting from Houston to New Orleans, there is no other way to go than LUV.

~~~
rblatz
I typically do PHX to CMH, but I've also tried CMH to SAN, PHX to SFO, and PXH
to SJC. Maybe it's just the routes I fly, because I hear people talk about
cheap flights on Southwest. I personally have not seen them in the past couple
years.

------
praptak
_" How do you get people with wildly differing willingness or ability to pay
to fund some common good other than through redistributive taxation?_" For
cases like this why would I want something other than redistributive taxation?

By the way, Joel Spolsky has a very good explanation of the mechanisms behind
airplane fares, including why you might _not_ want to go this way:
[http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...](http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html)

------
jot
Seems very similar to the way many successful SaaS businesses operate.
Charging larger businesses $200/month with big margins makes it viable to
provide $20/month 'freelancer' plans with low margins.

------
beefxq
Wealth redistribution is good for society.

------
VLM
I thought the anecdote about 1st class trains in London being socially
unacceptable was an interesting cultural anecdote. I've ridden Amtrak in the
US both steerage class and first class and no one thought it was overly
interesting or revolutionary. Perhaps because it was like an art deco day
dream rather than decorated like an "Edwardian-era New Orleans brothel" per
the article. Hmm, that gives me an idea about instituting a "mile long train"
club... which would be pretty easy to implement in the 1st class cabins, not
so easy for steerage.

One interesting experience WRT 1st class trains is unlike the authors strange
ideas about sitting on spikes in a bus, the primary difference between
steerage and 1st class on Amtrak trains was privacy. My own bathroom, my own
closed cabin, etc. Same food as everyone else (although it was "free" with the
ticket price). Same view out the window, we didn't get there any sooner than
anyone else...

Oh and the 1st class only lounge in the Chicago station has to be seen to be
believed. That alone might be worth the ticket price. Even impatient me, in
luxurious enough surroundings, didn't mind waiting an extra hour or so. Its
not like any airport waiting room I've ever seen.

~~~
mason55
_> I thought the anecdote about 1st class trains in London being socially
unacceptable was an interesting cultural anecdote. I've ridden Amtrak in the
US both steerage class and first class and no one thought it was overly
interesting or revolutionary_

People view long distance travel differently than their daily commute when it
comes to economic segregation. I imagine there would be an uproar in NYC if
the MTA talked about a plan to create a first class car on the subway however
no one bats an eyelash about Amtrak.

However, I bet you could find a price point where people wouldn't complain if
you added a first class car to the London Underground or NYC subway system. I
think there's a psychological effect in play where if it's a price that you
could pay if you cut into your budget then it stings but if it's a price that
seems ludicrous to you then you don't mind as much. I personally would feel
more ok with a first class car if it was $100/trip vs. $10 (regular ride is
$2.25).

~~~
AlisdairSH
Funny, I feel the opposite.

$100/trip for a subway ride? Preposterous, and the economic system is somehow
broken that such an income disparity exists.

$10/trip? Eh, if I cut out the Starbucks latte, I could do that. But, I really
prefer flavor coffee to sumptuous subway seating.

I guess I'm really a socialist at heart.

~~~
VLM
As a thought experiment, assuming the transit system was a non-corrupt non-
profit, a rich dude paying $100 for a ticket means a heck of a lot of poor
people will continue to pay $2.25 today instead of having to pay $2.50. Or
insert similar argument. Maybe instead it would mean some employee gets health
insurance this month, etc.

In the real world of course, corruption would eat all $100 and then the poor
would be stuck paying $2.75 once budgets get used to $100 tickets from rich
dudes.

