One of the reasons the industry is upset about skiplagging* is that the rest of the physics of competing hub & spoke carriers makes it very, very hard for them to remove the incentive by repricing the product(s) as various folks upthread have suggested.
If too many folks abuse the “all you can eat” buffet, the manager raises the price, institutes quantity limits on the prime rib or crab legs but not the potatoes, etc. The instant funds availability regs make it hard for banks to disincentivize check kiting, so they respond with monster fees that will erase months of kiting profit if you goof just once and bounce a check.
The nature of hub & spoke is super efficient at delivering affordable variety; lots more lesser cities and even small towns can now have frequent daily worldwide connectivity. At the cost of a plane change in a hub. That was economically impossible in the old days doing it the old way.
* Which was probably originally skiplegging then some idjit typoed in a tweet that happened to go viral and here we all are: stuck using a nonsense term forever more.
And there are lots of examples of huge corporations engaging in selfish behavior. In fact, that’s what they are designed to do. And capitalism mostly works, and all that selfish behavior generally leads to products and services being passed around in a somewhat efficient manor.
I’m not saying that corporations are evil when they try to make a buck. But i think it’s grossly disingenuous to turn around and claim that individuals are evil when they try to save a buck. No, both are just trying to act in their own self-interest. Except airlines have so much more power than their customers that they can rig the system and turn around and punish customers who try to game the rigged system. That is the practical fact. I only object to people claiming assume moral superiority of the corporation, or veniality of the customer.
That makes a hell of a lot of sense. I wondered where the term “skiplagging” might have come from.
I don’t think anyone here is claiming that—I’m not. What some of us are claiming is that skiplagging, if enough people do it, can cause problems that the individual consumer may not realize, and that it is reasonable and non-evil of the airlines to try to prevent it.
This may be true in general; I don’t pay enough attention to airline travel to know. But I do not see how the specific system that renders skiplagging possible is an example of a system that is rigged against the customers.
Agree w all this. I’m much more trying to explain than to excuse.
The whole thing is a game of mutual rip-offery, and now, like a long-bickering married couple, it’s impossible to disentangle who started it or where justice might lie.
Ah, but if 5 pounds of sugar is $5, and 10 pounds is $8, can Safeway prevent me from shopping there because I buy one 10 pound bag instead of two 5 pound bags? And if the pricing is truly irrational, and the 10 pound bag is $4 after discounts, can they prevent me from throwing 5 pounds away?
Safeway can’t stop you from doing these things, just like the airline can’t force you to get on a plane after a layover. However Safeway CAN:
Determine that you are abusing this promotional price and refuse to continue to do business with you.
File a lawsuit against another business that is organizing abuse of this promotion, assuming they can actually prove wrongdoing and damages.
Decide that this promotion is bad for their business as a whole due to organized abuse of the promotion, and end the promotion.
Those of us “defending” the airlines are simply pointing out that this promotion is not hurting anyone, it isn’t evidence of Safeway screwing us with their market power. It’s Safeway trying to squeeze a few more bucks out of their shelf space by offering a different product for a different, highly price sensitive, customer set. For the most part it’s OK, because their normal customers still get the $5 sugar, and they sell some very cheap 10lb bags to other customers.
Then along comes the clever guy who says “let’s direct everyone to the cheap sugar in the ‘international foods’ section” which sounds great until Safeway sees that this is messing with their core business and they pull the 10lb bag promotion entirely. Score a win for the little guy?
Grocery stores have a more traditional method of doing this kind of market segmentation – coupons.
They say stuff like, “we’ll sell you this can of beans for $1, but we’ll also sell it to you for $0.80 if you go through the ritual of cutting out a slip of paper out of our circular and presenting us with that slip of paper when you check out. The slip of paper doesn’t benefit us in any way – in fact it costs us to print that slip of paper so you can cut it out and present it to us – but we give you a discount if you have the slip of paper and not give you the discount if you don’t. Then we immediately throw out the slip of paper.”
Grocery stores making coupons achieves basically the same thing as an airline does making a skiplaggable route – selling the same thing to two different people for different prices. The grocery store is hoping that they can sell to people who wouldn’t buy a $1 can of beans but would buy it at $0.80 without having to offer the lower price to everyone. The airline is hoping they can sell a trip to Chicago to people who only want it as a leg of a trip to Milwaukee for less, without having to offer the lower price to people heading to Chicago.
And grocery stores face the peril of “extreme couponers” who obsessively collect coupons to get the lowest possible price even though they could easily pay the full amount. Too many of them and the grocery store will stop offering coupons at all.
Safeway can, and does, put limits on how many cheap sugars you can buy. And I’m talking morality, not legality. I’m suspect the airlines are within their rights to enforce their rules. But saying that people are wrong to take advantage of irrational pricing (from the consumers point of view) that the airlines have created is pushing it.
Remember when round trip flights were cheaper than one ways? Was a consumer being immoral by buying a round trip ticket and never using the return half?
Remember when it was cheaper to fly Friday returning Monday than Monday returning Friday? That was done to encourage vacation travel, fine and get more from businesses. Some people at work would go to a factory Monday through Friday, returning home for the weekend, and then do it the next week, sometimes for months. They learned to Instead of buying RT tickets Monday to Friday from Home to Work, they did it Friday to Monday, Work to Home. The airlines hated this also. Was it immoral? Remember, the extra money the company paid by doing it the airline way either reduced profitability, hurting stockholders, or caused higher prices, hurting consumers. The extra money going to the airline is not coming out of thin air.
I mildly prefer that airlines either allow skiplagging or, better yet, use a simpler pricing model where skiplagging could never save passengers money.
But it should remain legal for the airlines to try to stop skiplagging. Why? There already are too many laws. And every enforced law costs the taxpayers, most of whom will never skiplag, hard-earned money.
Someone may say that the airlines will always obey any such new law, so cost to the government is minimal. But I think there will be borderline cases resulting in complaint letters being answered at the Federal Trade Commission, or other agencies, at government expense. And there probably will be actual court cases. Maybe they won’t build a single new courtroom or hire a single new judge, but then the cost is that other cases are backlogged. Justice delayed, justice denied.
There are two different ways to look at what the airline is doing:
They’re offering the same thing—a flight to Chicago—for two different prices. It’s just that, in one case, the passenger is expected to immediately follow the flight to Chicago with a flight to Milwaukee.
They’re offering two different things—a flight to Chicago and a flight to Milwaukee—for different prices. It’s just that the easiest, cheapest, or most efficient way for them to offer that flight to Milwaukee is by going through Chicago.
The people who are defending skiplagging seem to be saying: “They’re offering to sell me X for $500 or X and Y for $300. Why can’t I buy the X and Y and just take the X? What harm would that do?”
And it might not do any harm, especially if only one or two people do it. But it might “use up” all the Y so that there isn’t enough for the people who actually need Y.
Which leads to two obvious questions:
Question #1: Why don’t they offer just Y without X bundled with it? Answer: That would be impractical. (It would require direct flights from everywhere or everywhere else.) Or, another way to look at it is that that’s precisely what they’re doing when they sell a ticket that forbids skiplagging.
Question #2: Why don’t they charge the same or less for “just X” than for “X and Y” (or “Y via X” or however you want to look at it)? Answer: It might not make economic sense to do it that way, for reasons that may not be obvious but which @Buck_Godot attempted to demonstrate with his “toy example” in Post #109.
Starting at A, travel to X costs $X. Travel to Y through X costs $Y < $X.
Thus the trip from X to Y costs $Y - $X which is < 0. That’s what the airline is telling the market based on its pricing. And clearly the only way the airline can not let people take advantage of this pricing hole is to forbid it.
When I lived in Princeton, there was a little airline called Princeton Aviation that flew from Newark to a tiny airport just north of Princeton. One day flying for work we decided to drive up north at the last minute, so my wife picked my up at Newark airport and I didn’t use the Newark to Princeton ticket. When I check with my work travel agency if they could get a refund, it turned out there was a credit for changing planes which was more than the cost of the ticket, so they definitely owed anything. But this was 40 years ago, so no one yelled at us. Not that yelling at the AT&T travel agency would do anyone any good.
Irrational pricing drives odd behavior.
Agreed. The airline is making what is to them a rational pricing decision. Which is contrary to the expectation of the outside observer who does not know how it was arrived at.
I believe I said above that it was irrational from the point of view of the consumer. The consumer has no moral requirement to do things that benefit the producer and not them. If a time share salesman gives me a really good reward for sitting and listening to them for an hour, I am under no obligation to buy anything or to stay for a second longer than required to, even if no one would give me that reward if every potential customer left without buying.
Sounds like you have never been to Las Vegas to gamble.
You are correct you have no moral requirement to do things that benefit the producer but the producer is absolutely free to kick you out. And they will.
They don’t kick people out who play penny machines. But my brother was a card counter, and had some tricks. But I’m not disputing the right of the airlines to do what they do - maybe they’d lose a lawsuit, but I wouldn’t bet on it. I’m talking about the ethics of exploiting the loopholes the airlines introduce.
Surely you don’t think that implicitly accepting a shrink wrap contract makes it always unethical to violate it. Say a fast food place, hidden in the receipt, says that the consumer by consuming the meal agrees not to report the place to the health department, no matter what. Someone who does might be banned from coming back to the store, but the reporter would not be doing anything unethical.
That’s more public good than the airline case, but the idea is the same.
Yeah, card counting is a decent analogy. I don’t think it’s immoral to count cards, either. And i don’t think the casinos are acting as moral upright organizations in throwing out card counters, either. I acknowledge their legal right to do so, but think that it is a violation of the implicit moral contract they enter into with their customers. (“You can play our games, so long as you don’t have any skill.” Yeesh.) Of course, everyone knows that casinos are slimy.
What if you walk into a fast food place with the specific intention of reporting them to the health department? Or at least threatening to, in hopes of getting your meal comped?
But airlines, unlike casinos, provide what is arguably a useful service. To the extent I think casinos that kick out card counters are immoral, it’s because I already think the entire industry is immoral. Not because I so loathe gamblers or their enablers, but rather because the industry is a parasite built upon human misery. They are capitalism at its worse.
Airlines, on the other hand, are capitalism at its best. That flying sucks so much is this a perfect representation of what I think about capitalism: even at its best, it freaking sucks.
Just the same, as I and others have noted previously, airlines operate sufficiently close to the margins of bare profitability (and sometimes not even reaching that threshold) that I am generally satisfied that their pricing schemes really are just what it takes to run an airline amidst stiff competition. Which, again, is supposedly what capitalism, in its ideal form, is all about.
Within that framework, I don’t see a moral issue around skiplagging, just a contract dispute to which I am largely indifferent as a nonparty.