Facing unsavory headlines and scrutiny from the mainstream media, Delta Air Lines and United Airlines have pulled back a controversial pricing structure that charged solo travelers more for their airline tickets on select routes. But is this a victory for consumers or a defeat?
Delta + United Now Punish All Travelers Equally
This week, major media outlets picked up on the fact that in some markets, airlines charged more per ticket when you bought one ticket versus two. This runs against the (incorrect) conventional wisdom that flights become more expensive only as they fill up.
These sorts of “fare deals” have been widely discussed for many months, but Thrifty Traveler wrote about them this week in a story that drew national headlines and now has resulted in Delta Air Lines and United Airlines pulling such fares without comment (American Airlines still has not made adjustments)
Thrifty Traveler is claiming victory over this rollback (“After Blowback, Delta & United Dump Fares That Punish Solo Travelers”), but One Mile At A Time makes a very good point:
“However, unless I’m missing something, exactly the inverse is true…airlines have simply eliminated the fares that offer discounts for those traveling as a party of two or more. So now everyone pays more, and perhaps the more accurate reality is “After Blowback, Delta & United Start Charging Everyone More.”
To which Kyle, who wrote the story, acknowledged his point, but still tried to argue that some transparency is better than none.
Ben pushed back and made a very reasonable point that “we need transparency” seems more like an empty political slogan than anything substantive.
Ben rightly notes that the lack of transparency, to the degree it can even be defined, is a two-edged sword.
Overall, I think Ben’s quite right here and calls for “transparency” strikes me as naive.
When “transparency” leads to higher airfares for everyone or award redemption sweet spots that are swiftly eliminated, consumers do not win…and no amount of self-righteous adulation can overcome that.
But I don’t discount Kyle’s point (a point I made yesterday) that there is little logic in charging less for two seats than one seat…and if this policy was kosher, why would airlines move so quickly to remove it? But has there ever been logic in airline pricing since deregulation?
It could well be that airlines hastily pulled the “discount” for multiple travelers on weekends because that was the easiest adjustment possible. But I believe there was another consideration.
The Legal Angle
In all my travels around the world, there is no country that even remotely approaches the USA in terms of being litigious.
It would not surprise me if class action lawyers are already circling like sharks, looking into how airlines could be sued over this practice.
We’ve had great public debates over fairness centering on equality versus equality and this whole tempest in a teapot over solo airfare, like our litigious culture, strikes me as a uniquely American problem (the country, not the airline).
Americans are generally an egalitarian people, and the idea that you paid more than me for the same thing just inherently rubs us the wrong way, even though you might have 200 people paying 200 different fares every time you step onto a flight.
People don’t like that they have to pay more for the same seat on the same flight at the same time just because they are traveling alone and not with a partner or group.
And of course that is fair enough, but it’s also a way to game the system…and those in the know have taken advantage of this “discount” offer (again, this “news” was not broken by Thrity Traveler, but has been discussed for months in forums like DansDeals and FlyerTalk).
Returning to the example I posed yesterday, while I’d love to pay $175 instead of $424 for my ticket from Los Angeles to Pittsburgh, if everyone is now charged $424, no one wins but the airline.
There’s a legal reason why Delta and United (and I suspect, shortly, American) have suspended this type of pricing: they got busted on what many will consider an unethical practice. If the airlines lowered the single fares to the couples pricing, it might demonstrate that they were unfairly targeting solo travelers and set themselves up for a massive class action lawsuit. Now airlines have a defense that they were simply allowing for discounts for “bulk buying,” but eliminated it, a more plausible argument.
I’m hopeful that we will see single passengers pay what couples pay and not the other way around, but the “quick fix” by the carriers is likely a strategic move aimed at eliminating any charge of unfair pricing (regardless of the legality of penalizing solo travelers or rewarding group travelers).
To be clear, I’m not saying any lawsuit would have merit, but could we see a lawsuit over this? Absolutely.
Bottom line: this is a developing issue and it’s far too early to claim victory or defeat.
CONCLUSION
Delta and United have pulled “discounts” for multiple travelers on select routes and I suspect American will do the same thing. If that means everyone pays more, consumers do not win…but the “quick fix” this weekend is more likely aimed at diminishing the chances that airlines can be charged with engaging in unfair business practices that could trigger class action lawsuits.
It will take more time to see whether consumers are hurt or harmed by this “exposé.”
image: Next Trip Network
Hard as it sounds, it is a victory for the consumer.
What if an airline had a “White people discount, Black people do not qualify”? Of course, white people might like it when then can fly a route for a low price. If the airline then ends that promotion, it is for the better.
Of course, lawyers might say that race is a protected class and marital status or flying buddies are not. However, the idea that I present still applies as a logical argument if it is not a legal matter.
But the law prohibits discrimination on the basis of race. I really don’t understand your point.
The point is that discrimination is usually bad. This is such a case. They may be able to get away with it because discrimination is not against a protected class.
If your metaphor was really apples to apples it would be “Black people extra fee, white people continue paying the same price”. The airline ending that practice wouldn’t be removing the fee but applying it to everyone, so now everyone pays more than when we started. Morally yeah that’s a better outcome only because, as you say, it deals with a protected class – but hardly a “victory for the consumer”.
That’s not to advocate for race-based airfares, your view is just a simplistic one. The “discrimination” on display here is the same [price] “discrimination” that gives us child, senior, and student discounts. Do you really want to live in a world where those produce as much pearl clutching as this has? Businesses are frothing at the mouth for an easy excuse to do away with them and I can promise you the outcome will unequivocally not be a “victory for the consumer”.
OK, I’m a single traveler. I am not thrilled if Ralph and Alice pay $600 for two seats when they want me to pay $400 for one. But, I understand (and taught) the logic of price discrimination. My single burger is $7, but the double is $9, even though the food costs are nearly twice as much. Airlines have, essentially, a zero marginal cost per pax. They need to maximize revenue. I get it. Oh, yeah, this might mean lower fares for me, but this is a case where I don’t hate the plsyer.
To address the bigger question, It is, to me, simple. If the government puts in a regulation on pricing, it always means some (maybe none) will be better off and some (maybe all) will be worse off, but, importantly, as a whole things are worse. This PR change is no different. I’m better off, Ralph and Alice are worse off. But my gains are less than their losses.
Spot on… the internet mob secured us all a one way ticket to the mutual confession outcome of the prisoner’s dilemma. Don’t worry though, everyone’s ticket cost the same.
Not sure of the legal issue. is there any legal bar to targeting solo travelers — they aren’t a protected class in any way, right? I guess this pricing could impact some groups more than others (marital status, disability? Feels like a stretch to me.) Are there DOT rules about transparency in pricing maybe?
Airlines target types of flyers all the time. This pricing could have been phrased as the equivalent of friends fly free or buy one get one for 50% off. Yes, this was done without transparency, but since when is airline necessarily pricing transparent, logical to consumers, or fair? Some people use skiplagging because of this.
I am not happy to pay more solo, but you are right that they won’t lower my solo price, so now I just lose the option of more affordable flights with my spouse.
My take is the following on the legal issue. That is it relies on one of transparency. There is nothing inherently wrong with bulk discounting as a principle. “Buy Two Get One Free” etc etc. However, in cases like this it’s usually shown and promoted as such. The consumer knows it. It’s understood. The airlines clearly were hiding from consumers that solo travelers (who will make up a lot of business travelers) were being targeted for higher fares. If this is not the case why on earth would you not just say, “Buy Two Seats. Save More!” The two seat fares were absolutely the “real” fares and the solo fares were directly an effort to price gouge solo business travelers.
While I hate the litigious nature of this country, and am a firm supporter of massive tort reforms, this is a case that should absolutely be a class action suit. There could be billions that airlines made over this practice, one which is shameful. I’m not a lawyer but it doesn’t take one to see exactly what they were doing. And the fact they made it vanish quickly with no response shows they are panicked.
The reality is, if an airline today announced a BOGO sale for flights to certain markets, nobody would bat an eye. You could argue that simply advertising this practice as a sale constitutes “transparency”. The fact that AA/DL/UA did this in secret is what created the perception that they were engaging in shady behavior. It’s also the unfortunate byproduct of what happens when an industry has fomented decades of distrust with the public with weaselly language and deceptive public statements about their pricing practices (i.e. bag fees sold as a “temporary” measure due to fuel costs, Basic Economy sold as “responding to customer feedback”, etc.). Everybody assumes something nefarious is going on, even if there isn’t.
I saw a sale the other day in a shoe store, buy one pair, get the second pair 50% off. I did not need two pairs, so I could not take advantage of that. UNFAIR! DISCRIMINATION!
What a crock.
That’s fine. They told you ahead of time. You made a decision you didn’t need two pairs.
How am I, mostly traveling solo on business, offered that same choice? You are clearly missing the nuance of this. They did not offer it as a choice. They did not tell us. They targeted us and knew exactly how to Inflate the single traveler fare that is going after expense account travelers who won’t notice. Until they did.
Genuine question –
Let’s say the airlines did tell you ahead of time (maybe there was a pop up saying something like “traveling with someone else? Add another passenger and save X” or “Add another passenger for only X”).
How would it have changed your behavior as a consumer? The implication of your second paragraph (and comment above) seemed to be that you were upset you weren’t informed this was happening rather than that it was happening.
If the savings were as Matthew posted in his example I am absolutely provided incentive to bring an assistant, family member, or colleague along with me. Not always, but often. Or, if necessary in his example, just booking a phantom passenger as a no show to get a total fare that is cheaper than one.
As well, it would create a better understanding of how to book for people traveling together but perhaps booking separately. Example. Company has a conference in Seattle and tells 8 employees to book tickets there on a certain date. They all book separately at higher fares unknowing. Without knowledge of bulk discounting how could anyone realize that they could save more booking together?
Also, you could get 2 seats and spread out to give yourself more room. Book the middle and aisle and then lift the armrest and you have a much bigger seat.
Airline seats are not the same as shoes or hamburgers. It is more complicated than buying 5 boxes of crackers at the grocery store to get a bigger discount. Everybody knows the price and can buy it if they want. Seats on a plane are limited.
So I can buy two seats and then, within the 24 hours allowed, cancel one. That way I would benefit from
buying two.
‘Americans are generally an egalitarian people’.
Have you told that to people who don’t have white skin? They wouldn’t know as from their point of view, there’s little or no evidence of it being true.