There is an interesting posting by David Farrer over at Freedomandwhisky, about the now quite familiar experience most of us have had of buying an incredibly cheap airline ticket. David talks of the Edinburgh to London route, because although Edinburgh and surrounding parts is the Freedom & Whisky target-rich commentary environment London is obviously the centre of the universe and he has to visit it from time to time to keep in touch, but of course it’s the same for everyone.
One of the reasons airplane tickets can be so cheap is that buying and selling them has got so much cheaper. You can now buy airplane tickets on the internet at a price that fluctuates from day to day – even hour to hour or minute by minute – according to the vagaries of supply and demand.
This is one of the most characteristic uses of computers in our time. A new business has not in any obvious sense been invented. What’s happened is that an old one – ticket touting – has been re-invigorated. And I think I’m right in saying that the same principle is now being applied to cinema tickets, and of course the package holiday trade has been doing this kind of thing for years.
This experience surely helps to spread libertarianism. Oh, I don’t mean that, as soon as you’ve booked your ticket for your last-minute emergency trip to Athens to get your mad uncle out of jail and been flabbergasted by how little you had to pay for it, you experience an uncontrollable desire then to log in to amazon.com and purchase the collected works of Murray Rothbard. What I do suggest is that several very important libertarian memes, about such things as the fact that prices are a totally subjective matter in no way dependent upon the history of how much it cost for the thing being sold to be made in the first place, and concerning the general desirability of free markets as the best way to coordinate complicated collective activities (such as a hundred or so more people all deciding to share the same plane trip to Athens – tomorrow morning at 6 am) surely are being popularised by these kinds of arrangements.
Note the word “collective” there. Collectivism not only messes with individual activity (because that’s its nature); it also can’t now do collective activity nearly as well as voluntarily co-ordinated individual choice-making.
The plane trip has already been decided upon by the airline, and they can’t now cancel it. The taking-off and landing slots, the crew, the maintenance and the petrol have all been committed to. Whether you are on the plane or not makes hardly any difference at all to the airline’s fixed costs. What does one less empty seat cost them? So if there’s a chance they could maybe fill the plane in a last minute rush by damn near giving away the seats, it makes sense for them to try to do just that. So, you get your bargain ticket.
An airline ticket futures market, you might say. My point is: computers are now turning everyone into Gordon Gekko. Gordon Gekko’s opinions are accordingly that much more likely to spread to everyone.
That’s not an original thought, but it is quite a thought.
Nice theory, but I can assure you from exasperating personal experience that they can and have cancelled flights at less than 24 hours notice and put passengers (including me) on the next, now completely packed one.
When I asked the young British Airways airline employee who phoned me to explain this arbitrary “tipping out” (as London Underground calls it) of customers, she said they just hadn’t sold enough seats. So even though mine wasn’t transferable, being dirt cheap, they transferred me anyway …
What sort of a global village comunity is this, McLuhan?
Dave:
If the deal you had with the airline was that they were entitled to behave like that, then they were. If not, then presumably they could have been sued. If the law is vague, it should be clarified.
But you’re not suggesting – are you? – that all those who have successfully purchased dirt cheap airplane tickets (such as David Farrer, as he reported in his Freedom and Whisky posting) were imagining it. You are merely telling us that some of these deals have dangers.
For which, I for one thank you. Good point. But the “nice theory” still stands. That very cheap airplane tickets are now a constant fact remains a fact, and computer technology, the Internet and so on, are still the explanation.
Brian:
Fair enough, I may have obscured my “nice theory” point.
I was trying to show that the airlines seem to have an alternative to flogging seats on the Net at any price to fill the flight, i.e., “tipping out” those who have already booked by cancelling it.
I should also mention this happened in South Africa, on a domestic carrier operated by BA . I cannot be sure it happens in say, the UK, but I don’t see why not.
I’m a frequent flyer on the Glasgow-Heathrow run and I have been on half-empty or nearly-empty BA planes many times, usually in the middle of the day, (and not just straight after Sept 11th btw) so I don’t think BA cancel quiet flights. Apart from anything else it would completely screw up their aircraft movement plans.
What Ryanair get up to is probably quite different of course, but then what do you expect for 50p? You pay your money and you take your choice, which is what Brian was saying above.
I’m not even going to rise to that flame-bait about London being the centre of the universe.
London may have been the centre of the universe at the weekend because we “provincials” were there attending the LA conference.
Interestingly, when I researched for the original posting, I was able to get a complete Edinburgh – London timetable for all the low-cost guys within a couple of clicks or so. But for BA it took a lot of searching around their site and then it suggested that I consider going to London direct or alternatively via Manchester, Dublin, Inverness or Paris! Someone with a bit of common sense needs to look at what their computer is up to.
I like the theory, but have some doubts as to the practical implementation. The negative experience is an example.
Tipping out will create angry voters, including some politicians. The politicians will promise that they can force the airlines, through “fair” regulations, to avoid the tipping out, without increasing costs. The politicians might even promise longer lead times of knowing about cheap fares; and having more cheap fares available longer, etc., etc.
The politicians will “lie” — in that forcing the airlines to comply will increase the airline cost, and the ticket cost (unless they come with a gov’t subsidy, unlikely but that means higher taxes).
The point is, that too many voters will believe they get the monetary low cost benefits, w/o the risks/ info costs (tipping out; checking frequently).
I sincerely hope I’m wrong — and that some “reputable” (BA?) airlines keep higher prices and avoid tipping out, so that other airlines can get reputations as usually cheaper, but less certain.
Beware of the coming Euro Airline harmonization!
(hi Brian)
~Tom