Tuesday, September 29, 2009

Backwards Pricing...

Apparently British Airways is now planning to add a surcharge for parents to sit next to their children... This is a perfect example of a company that got the pricing backwards.

Joshua Gans an Economist from Australia (and the author of Parentonomics) makes note of the pricing and immediately points out that the system is perfect for him to game -- allowing him to save money, and offload the responsibility for managing his children's behavior. See his take here: http://gametheorist.blogspot.com/2009/09/paying-to-sit-next-to-your-children.html

A majority of the Commission have children, and all of us have had the uniquely painful experience of flying with other people's children nearby...

Thus, we feel that BA got this completely backwards. While passengers may not want to admit it, given the opportunity to pay more for a seat that had no children nearby -- particularly none in the seat behind them, with their seemingly limitless desire to kick -- they most certainly would pay more. In fact, depending on the route -- any flight to Orlando, FL comes immediately to mind -- passengers without children might be willing to pay nearly double to fly without children nearby...

Yet under the British Airways plan, parents will be given an incentive inflict their children on other fliers, unsupervised...making other passengers' flights less pleasant as well. Score another one for Virgin Atlantic...!