Southwest opts for Price Discrimination
no more open seating
My wife and I like the open seating policy that Southwest Airlines is abandoning. We were good at playing the game. If you hit “check in” exactly 24 hours before your flight, you are likely to get at least a “B” boarding priority. Higher-priority boarders get on the plane first, which means you are more likely to be able to get your carry-on bag in a bin and more likely to get a seat you would prefer.
Southwest plans to change that game. Instead, they will assign seats and charge customers extra for preferred seating. Once again, Price Discrimination Explains Everything.
Because neither of us is large, my wife and I are unlikely to pay extra for a better seat. But there are two issues for us: carry-on bags; and avoiding seats next to obese people.
The “B” priority was ideal for us. We could find space for our carry-ons. And there would already be people seated on the plane when we boarded, so that we could choose a seat next to someone of normal girth.
If failing to pay extra means that we will be among the last to board the plane, then we risk not having space for our carry-ons and having to wait for them when we land. If so, then Southwest will have found another way to price discriminate: make people who care about space for their carry-ons pay more.
Also with reserved seating, I do not see a way to ensure that we are not seated next to someone who takes up 1-1/2 seats. Unless we want to pay for three seats for two people. If Southwest is really clever, they will figure out another way to charge extra for reserving seats next to people who are not super-sized.
In public, Southwest is saying that it is changing to reserved seating in order to please customers.
Southwest CEO Jordan said he expects the company will win skeptics over. He said he was taken aback by the overwhelming support for assigned seating in the company’s own surveys. “I was surprised that it was an 80-20 split,” he said.
I call baloney sandwich. I’ll bet they didn’t ask people, “Would you rather have open seating like we have now, or would you rather have to pay extra to reserve the seat you want?” The real reason that Southwest is changing is that the opportunity to gain from price discrimination is too good to pass up.
In addition to “price discrimination explains everything,” I have another aphorism: “You get what you select for.” Southwest is now selecting for different passengers. Those of us who are not large and who are conscientious about playing the check-in game will have no longer prefer Southwest. Obese and/or less conscientious people will have less reason to stay away from Southwest.
Price discrimination is charging customers different prices for the same good/service. Here Southwest is simply recombining the services it sells into different bundles. True, the purpose is the same as with price discrimination: they expect the new scheme to let them appropriate
some of the consumer surplus that existed under the old one.
How many of these problems result from airlines charging for checked bags and not charging for the overhead bin space? (although the risk of them losing a bag is higher than it should be, so there is another hidden cost to checking a bag, in addition to the time lost at baggage claim). I don't understand why I can't reserve an overhead bin space with my seat. Then the plane could board sensibly back to front, window seats first, etc without the risk of the people at the back taking the overhead bin space at the front.