Hacker News Reader

Comment by wagwang | Hacker News Reader

Aren't flights at an inflation adjusted all time low and most airlines operating at a razor margin? Seems like the market doing their job. Also price discrimination sounds a lot worse than what it really is? Idk, I don't like that air travel is so easily accessible but, the pricing stuff is the least of our worries.

View on HN

I would love to see the following be factored in if it isn't already:

1. airline ticket holder minutes wasted due to flight delays and cancelations.

2. amount of jet fuel wasted on empty flights for the purpose of keeping gate privileges.

3. money spent attempting to acquire or merge with other airlines and attendant FTC defense preparation.

4. (any and all other wastes of revenue that do not get invested in the consumer and instead are paid by the consumer).

There is more to the story than the price per mile. And that's not even opening the can of worms that is the quality and comfort of the flight for the consumer...

From my understanding, I can't find the article, but it seems airlines by default due to Pilots unions take like 95% of profit, fixed. So when fuel or what not meses with profits. Airlines have to declare bankruptcy to renegotiate with Pilots.

1. is that even in the airline's control?

2. sure but the baseline needs to be against other forms of transit? What's the vacancy rate in a greyhound or amtrak

3. I guess? It's unclear to me if a merger is bad though? What if it streamlines routes? Idk

re: 2, the issue is that e.g. airport gates are a(n artificially) limited resource that require airlines to perform behaviors that don't benefit customers and have externalized costs (e.g., wasting fuel) in order to maintain access to those resources.

A bus only needs to have something like four people aboard to make it more efficient than equivalent cars by most measures (road space required, fuel, etc); so it's not a 1to1 comparison to other transit rates.

The fact that we don't have a high speed rail network in the United States is a travesty. Air travel is the least economical form of public transit. We pack human beings into these planes like meat in a can just to make them affordable and then the airlines go bankrupt anyways.

I would have thought this as well. Looking at a trip from Fukuoka to Tokyo though. Shinkansen takes 5 hours and costs about $200. An economy flight is around $50 and takes less than 2 hours, although it’s possible there’s a lot more overhead to that time.

I don’t know if there’s really that much time overhead. If I’m spending $200 on that rail ticket, I’m gonna arrive at the train station early to account for any issues I have getting there, just like an airport. I find it a little frustrating that people argue that there is zero time overhead in getting to a train station but there’s like three hours with an airplane when in fact, it’s often two hours for airlines and one for trains in reality.

For flights you have to go through significant amounts of security which is often highly variable.

Further, flights tend to be distinct events. For many routes there may only be one per day, and even for busier routes you usually can't just hop on the next one without significant effects on your travel plans, for example rescheduling connecting flights. Trains on the other hand just keep running, there's going to be another one going the exact same route every few hours at most, likely less for busy routes. You can go to a train station without looking at the schedule, for a flight you're scheduling your entire day around it.

Shinkansen operates at a frequency of one train every 4 minutes on some of the busier lines. The $200 is mostly for very long single trips. It's mostly used by commuters who get monthly passes for cheap and are refunded by their jobs. I can't even imagine how horrible it would be to fly on an airline every single day. It sounds exhausting.

While economical in the sense of a personal budget, airplanes are not nearly as economical as high speed rail in general.

Subsidies and externalities kind of muddy the water when it comes to ticket prices. While it is generally cheaper to fly, this is because you are not paying for the damage your flight is causing to the city around it. Noise, pollution, damage to property, and disruption of the quiet enjoyment of those around you.

Shinkansen is a for profit business that acts as an engine to turn worthless rural land into extremely valuable land. Air travel does the opposite. Property values around airports are extremely low. Every plane rattling people's windows and dropping a plume of unburnt fuel and exhaust on people's heads damages the area under it.

That’s an interesting point, I do often hear about being near a rail line as being a benefit for property values, but you don’t usually hear the same thing about being near an airport. Although this might partially be because a rail line is something people would use more often than an airport.

I don’t have much of a personal opinion on this. I just thought it was interesting. You’d think this train with a fixed route, tons of seating, traveling multiple times per day, would be cheaper than a plane, but somehow it isn’t.

The pollution and noise pollution is an interesting point, that could probably be improved somewhat for air travel while keeping the benefits, if electric planes could be developed. I was in India at one point and the noise of just being anywhere near roads was terrible day and night, it wasn’t even necessary people just love to honk there. There actually was a kind of luxury hotel city (Aerocity Delhi) near the airport there, I guess if they’re already used to that much noise being near an airport can be valuable.

There is some advantage for cars and planes in that you don’t need to develop the whole land between the two points you’re interested in traveling between as much as you do for rail, maybe that’s where the price difference is coming from.

> Also price discrimination sounds a lot worse than what it really is?

I usually think of price discrimination as the first- or third-degree types (how they define them in the article), that is, charging people different amounts based on how much you think they are willing to or can pay, not on any differentiation of the product. That practice always sounded dirty and dishonest to me.

I wasn't aware that something like basic economy could be considered (second-degree, using their terminology) price discrimination; to me that's just offering a different product, with different features and different quality, at a different price. That honestly seems entirely reasonable to me; basic economy is just a different class of service, similar to how business class is different from economy class. I don't think of biz/first class as price discrimination; to me it's just selling a different, higher-quality product for a higher price.

> Aren't flights at an inflation adjusted all time low

Yes, due to improved technology and equipment and because prices have been historically very high.

> most airlines operating at a razor margin

No, many airlines operate in imperfect markets and reap excessive profits compared to other airlines.

>No, many airlines operate in imperfect markets and reap excessive profits compared to other airlines.

Which ones? Practically all airlines are public companies with easily accessible financial data.

All of the one's I've looked at are barely scraping by with single digit profit margins. Delta is around 6% and Emirates is among the if not the best at around 9%.

Which airlines are "reaping excessive profits"?

I would like to invest in them.

Reply on news.ycombinator.com