[TeMPOraL]

Looking at the reactions of people to this topic, I come to believe there are two general approaches to life. Some people try to look at the whole game and want everyone to win, so they play by the rules. In terms of prisoner's dilemma, they choose to cooperate. Others notice that the market economy is designed around people being selfish, so they use it to justify defecting - minding only their own short-term interest.

As for ethics of this topic, I think the quoted government response about one such case is spot on - this is people acting in bad faith. Whether or not you think it's fine to act in bad faith depends on to which group you subscribe - defectors, or cooperators.

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EDIT: The article would make a much stronger point if it focused on the problem of "hidden city" tickets, where people choosing to reduce their travel costs are not just haggling over price, but breaking a deal and wasting airline's fuel.

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EDIT2: Took a shower, thought about it some more.

My initial paragraph isn't about airlines really, it's an observation made after seeing a stream of comments arguing for general selfishness.

As for problems with some of the travel "hacks", I have issues with two of those in particular. "Hidden city" flying is one, and using golden-card-carrying third party to buy you tickets is the second. Both of them introduce waste - the more people do that, the more often a plane flies with seats empty, wasting fuel that could otherwise provide utility by carrying other passengers. And speaking of other passengers, this is another thing to consider - if you use a travel "hack" that leaves an airplane with an empty seat, you're taking away the seat from another traveler, who could have used it. Or, given the discriminatory pricing, who could have paid less for it. So by using those kinds of tricks, people are not only hurting the airline, they're also hurting each other.

[ethbro]

The issue I think most people have with a cooperative approach is that the airlines (indeed, any private businesses organization in a free market) aren't playing cooperatively. They are by definition playing selfishly, with behavior only moderated by applicable government regulations and desire not to anger their customers so much so as to prevent future business.

Ex those considerations, do you really think they would (or could, given the competitive state of air service) leave money with the consumer because it's "more fair"?

Monkey see, monkey do: $%^@ them.*

*For values of @#$^ that don't actually include breaking laws. E.g. obtaining illegal access to their system(s) and creating yourself a ticket.

[mantasm]

I wouldn't segregate the general approaches to life in that sense.

Providing different prices to different groups of people does not result in "everyone winning". It's a classical example of market segmentation, price based on the average ability to pay of someone who holds the currency. It entirely benefits the airliner, and their profits, to be able to do so.

The "hidden city" tickets? A cheaper ticket to go from A->B->C than A->B is a deadweight loss in the market (assuming competitive markets). Prices are not reflecting costs, and airlines again are segmenting based on ability to pay.

[TeMPOraL]

I understand, and in general, I hate market segmentation. But I'm willing to excuse airlines for now, because... without it we wouldn't be flying.

You're right - the prices are not reflecting the costs. A typical traveler pays nowhere near the price they would if there was no segmentation. An average tourist ticket multiplied by number of passengers is barely enough to fuel a jet. And you have to pay the pilots, the airplane crew, the ground crew and still have enough to keep the lights on at the airport. Airlines are in a shitty position, and while probably some of it its their own fault, I'm not that sure if being hard on them is helping anyone.

[klipt]

Hidden city tickets are weird because if the cost of flying A to B to C is lower than A to B, that implies the cost of flying B to C is negative.

Does the government pay airlines to fly to podunk towns that wouldn't otherwise get service, or something?

Why don't they just make that leg of the flight $50, but hand out $150 to everyone who's actually on board mid-flight? That would prevent people from booking the flight but not taking it.

[fancyketchup]

> Does the government pay airlines to fly to podunk towns that wouldn't otherwise get service, or something?

In some cases, yes. It's called "Essential Air Service." But that's not the usual reason for B->C having negative apparent cost.

[mikeash]

Hidden city ticketing doesn't waste the airline's fuel. They'd burn just as much fuel if you used all segments you purchased. What wastes their fuel is stupid pricing that makes it cheaper to buy segments you don't want.

It's not generally considered unethical to, say, buy a bottle of wine just to dump it out. Why would the same thing be unethical when it's an airline ticket instead?

[TeMPOraL]

> Hidden city ticketing doesn't waste the airline's fuel. They'd burn just as much fuel if you used all segments you purchased.

The same amount of fuel is being burned, but one less person is getting transported to their destination. I see a pretty clear-cut example of waste here.

> It's not generally considered unethical to, say, buy a bottle of wine just to dump it out. Why would the same thing be unethical when it's an airline ticket instead?

Not sure if it's not generally considered unethical. It's probably wine being in abundance that makes people don't mind. But imagine if you bought one of the last few bottles in the shop, and then went and dumped it on the ground. It's totally legal, but I don't think many would argue it's good conduct.

[mikeash]

If the wine were rare, the price would be high.

Here, we're talking about a product (an extra leg on an airline ticket) whose price is negative. You're being paid to take it. That pretty strongly implies the product is abundant. If it's not abundant, and the airline is still giving it a negative price, that's pretty dumb on their part, and I don't think we can be blamed for making decisions based on the (apparently wrong) information they give us.

Edit: it occurs to me that there's an excellent comparison to be had here with the electricity market, which also sometimes sees negative prices. With electricity, prices go negative when there's an overabundance of supply and it's cheaper to use up extra electricity than to shut down power plants. The electric company wants you to use that power and they don't care how. Whether it's running your refrigerator or just shooting a laser into space, it's worth it for them to pay you to use it.

A negative price means, "Please, I beg you, take this product, we have too much of it." If it's not actually beneficial to the airline for people to buy those tickets (regardless of use, which is a separate bit) then they're basically lying by way of pricing.

[TeMPOraL]

Negative price means they pay you to do something, not to take the money and then not do it. Doing otherwise is, well, unethical ;).

I doubt that negatively priced legs come from product abundance. It's most likely optimization - e.g. if they can get more people going A->B->C then they can merge them with B->C passengers group and fly them together on a bigger, more fuel-efficient plane, etc.

Anyway, we're already paying much less than we should when flying privately; price discrimination works in our favour, at the expense of business customers.

[mikeash]

Negative price means they're paying you to take the product. They're not paying you to do something unless doing that something is the product.

In the case of negative-priced airline tickets, they are not paying you to ride an airplane. They're paying you to take a ticket. That ticket then gives you an option to ride an airplane. Ticket use is not mandatory, not even ethically.

If it were somehow advantageous for the airline to actually have people take the trip from B->C, then they could pay people to actually do it by, for example, giving you a rebate when you step off the airplane at C, or charging you a fee for not boarding the airplane at B. But they don't do this. So either they benefit from just selling the ticket, or far more likely they don't benefit from selling the ticket but are trying to manipulate the system in some other way.

I don't understand your optimization comment. There is no scenario in which it's cheaper to fly more people from B->C than fewer. Larger, more efficient planes are still more expensive in total to operate, so if your passengers fit on a smaller plane you'll save money that way, not lose money. Even if the bigger plane were somehow cheaper in total, nothing says you need to fill it up. You can just fly your normal B->C passengers in a bigger plane with lots of empty seats, if that ends up being cheaper. Airliners don't require ballast. There is no scenario where the airline makes more money at the end of the day by having you use your B->C ticket compared to obtaining a B->C ticket but not using it.

I also don't understand your "flying privately" comment. Airlines are cheaper than the alternative, so it's OK if they play pricing games? Well, it's a free country, they can play as many pricing games as they want, but I'm going to play them too.

[TeMPOraL]

> They're paying you to take a ticket. That ticket then gives you an option to ride an airplane. Ticket use is not mandatory, not even ethically.

Fair enough, though I still feel there's an ethical problem with creating waste / disutility.

> I don't understand your optimization comment.

I was thinking about something like this: there are people who want to travel from B to C, but not enough to warrant a new route (or increase in service on that route). So the company figures, if they can get more people to travel from A to C by offering a cheaper ticket, they can bundle them together at B and now there's enough people on B->C route that it makes sense to fly it (more often). I'm also assuming that B acts as a hub - it makes no sense to have direct route between every city due to combinatorial explosion. So here, the cheaper A->B->C ticket exists to attract new people willing to go from A to C.

I guess you're right if you only look at the money made directly on tickets. I don't know if, and how often, airlines get subsidies based on the amount of people they move around but if they do, then having planes flying half-empty may be a loss for them. But personally, I don't consider the money earned by the airline as the most important variable. What matters more is, IMO, the amount of passengers being transported. More people getting to fly = better.

> I also don't understand your "flying privately" comment.

I don't know what's the usual short phrase to refer to people like tourists, who travel in their personal capacity - for leisure, to study abroad, to visit their family, etc. - as opposed to business travellers, who travel to make money, and whose tickets are often paid by their company.

A lot of price discrimination is designed around getting the business customers to subsidize the "casual" ones. My point was, as casual flyers, we wouldn't be able to afford the ticket if it was priced fairly. Pricing discrimination in airlines generally works in favour of ordinary people.

[dragonwriter]

> But imagine if you bought one of the last few bottles in the shop, and then went and dumped it on the ground. It's totally legal, but I don't think many would argue it's good conduct.

OTOH, wine shops don't generally offer deals where it is cheaper to by two bottles of wine than one by itself, and prohibit you from reselling (or even giving away) the bottle of wine you don't want.

If they did, lots of people would probably see the seller's conduct as bad conduct, and it might make people more likely to see the buy-two-and-dump-one conduct as, if not good, at least reasonable given the circumstances created by the seller.

[TeMPOraL]

> and prohibit you from reselling (or even giving away) the bottle of wine you don't want.

I think the airlines, as opposed to wine sellers, have a good reason for having tickets to be non-transferable - seats on a plane are a scarce resource. Compare with a similar area where access to a scarce resource is transferable - cultural events like sports games, concerts, etc. What happens there is that there's a whole industry of people who buy out all the tickets and then resell them at higher price, often hoarding until last minute to justify the markup. This kind of antisocial behaviour is quite common and a big problem.

[mikeash]

In what way are airline seats scarce but wine is not?

Stuff like concerts is subject to scalping because the tickets get sold at below market value to avoid pissing people off. A concert venue may well sell out a popular show at $5,000 per ticket, but they won't charge that much because people will be angry. There is nothing like that going on in the airline (or wine) world.

[delecti]

Going along with your argument only works if you assume that the airlines always cooperate, which seems to be universally false. Cooperating when you know the other player always defects isn't altruistic, it's just dumb.

[Caprinicus]

Since when is trying to get the best deal immoral? Airlines try to get as much money as they can from their customers, and their customers are rightfully going to do the same to them.