What right do airlines have to tell us to stay a Sat. night in the #$*& first place?!
They are in business to be our servants, NOT our masters!
Now after 9-11-01 is the perfect time for govt. to assert on behalf of all PXX/taxpayers that if they want our help, the NEW RULE IS: ALL FARES SHALL BE ONE-WAY-ABLE!

I guess they have the right to set the rules for thir company,a nd we have the right to participate by purchasing tickets, or not.

If enough people shun them, the rules will change. That's why they call this kind of enterprise free!

Well, the airlines dont tell you that you have to stay overnight... they just recommend it if you want a lower fare...

William

Count me in as being against price discrimination.

OK:

1) charging more for an 8 AM flight than an 11 AM flight (same supply, higher demand ==> higher price, fine)

2) charging more for First Class than coach


not OK:

1) charging more to leave 11 AM and return the next day than to leave 8 AM and return the next Tuesday

2) charging two people the same fare, one of whom is in F and the other in coach

It's simple, the Saturday nite stay serves the purpose of preserving what is called "First Class". Of course we know that "First Class" isn't, but the seats are a little bigger, and when we sit in them and watch the masses pass by into the bowels of the aircraft, we can pretend that we are somehow "better" and "more important" then the rest of humanity.

How does the Saturday nite stay preserve "First Class"?

It's simple, if all fares were "one-way-able" everybody would fly on cheapo tickets and the airlines would all go broke.

All the airlines, except, of course, you know who.

Just take comfort that when you are paying that outragous fare just so that you can be home on the weekend, you are paying to preserve the American way of life!

I don't really understand what you consider the salient differences between the examples. They both involve pricing differences that primarily reflect differences in demand. Given that airlines have some degree of market power, they can charge more for people who want to fly at a certain time or who want more flexibility in travel dates or to buy tickets at the last minute.

Let the free market decide.

I think everything should be free.

A free market in property insurance would dictate charging higher prices to policyholders in black neighborhoods. Should we eliminate the ban on redlining?

I don't want to get into such a debate, but IMHO and kidding aside, the ban on redlining only serves to either make property insurance unavailable (perhaps through subtle means) in those neighborhoods, or serves as a stealth wealth transfer to the people in those neighborhoods (deadweight losses etc etc). Higher risk should mean higher premiums; nothing discriminatory about that.

[This message has been edited by pynchonesque (edited 01-28-2002).]

A higher risk that one can avoid is fine. The problem with property insurance risk of living in a bad neighborhood is that you can't avoid it (otherwise you wouldn't be living there). Same reason why it is important to prohibit insurance companies from getting genetic information when issuing life or health insurance policies.

The whole point of insurance is to pool risks. Bans on redlining and genetic information gathering do not hurt insurance companies.

JS, the question you pose is ethical or normative, and I have no answer for that side of it. My economics training only tells me to look for efficiency criteria, and I can tell you that letting insurance companies discriminate based on neighborhood or genetics or whatever else would lead to lower prices for consumers in general (at the expense of less fortunte folks). The important question is which of the two (efficiency or welfare of the disadvantaged) is more important to you -- and of course there's no set answer to that.

Anyway, not the time nor the place.

Airlines have a Saturday night stay requirement for a good reason. Business travelers wouldn't want to have to stay at the client site until Sunday, when their work week ends on Friday. Thus, business travelers won't stay over a Saturday night.

Since business travelers typically have deeper pockets, the airlines charge higher fares on tickets without Saturday night stayovers. If you take out the Saturday night stay requirment, business travelers will start getting access to and booking those leisure $300 or less fares to anywhere.

Let's take a look at an example of what that would do to a JFK-LAX flight operated on an AA 737-800 (the plane doesn't make a difference here, we'll talk mostly in percentages); coach only, let's forget about first class. This plane has 108 seats in coach.

An advance purchase ticket leaving on a Tuesday and returning Wednesday, with a Saturday night stay is $310 including tax; $155 one way.

The same as above, but returning Wednesday without a Saturday night stay, $2258 for the same flights, $1129 one way. (Coincidentally, you can get the fare without a Sat stay for only $461 if you don't fly non-stop lax-jfk).

So in this case, there's a $974 difference each way. Let's say that 20% of the flight from JFK-LAX is made up of business travelers, flying on the $1129 fare, and the other 80% if flying on the $155 fare. Works out great for the leisure travelers, right? Only $155 to get from New York to LA, non-stop.

Now, let's take the Saturday night stay requirement out of the fare rules. Now, to keep revenue the same, what would the new fare come out to be?

With Sat. stay requirement:
108 seats * 20% biz pax * $1129 fare = $24386
108 seats * 80% lsr pax * $155 fare = $13392
Total revenue for the flight: $37778

Without Sat. stay requirement:
Target revenue: $37778
Number of Pax: 108
Fare per pax: $37778 / 108 = $350.

Great for the business traveler, their round trip airfare went from $2258 down to $700.

Not so great for the leisure traveler, his airfare increased by $390 from $310 to $700. That's a 126% increase. I can typically make $700 get me about three leisure trips; taking away the Saturday night stay rule brings me down to one trip. No thanks, I don't want to cut my travel down by 2/3rds so that businesses can save money.

In this example, travelers also had the option of paying $461 and connecting through one city without a Saturday night stay. But, such an alternate arangement isn't necessarily available in every market.

Why do the airlines have a Saturday night stay requirement? Economics; and unless you want to pay significantly more for your leisure travel, you should like that answer too.

d

Doppy, thank you for bringing in some reason.

"Letting the free market decide" also doesn't involve making taxpayers subsidize failing businesses, imho.