We Are All Gordon Gekko Now

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Christine Negroni writes in the New York Times today about all the innovative ways that airlines plan to make money in the future since it’s now obvious to them that they can’t make money merely by flying people around. Matt Yglesias thinks the ideas all sound kind of dumb except this one:

Continental Airlines, which merged with United Airlines last year, is also taking business ideas from the world of finance. A year ago, it began selling options on ticket prices. The program, FareLock, lets would-be travelers freeze a ticket price for as many as seven days by paying a small fee which the airline keeps regardless of whether the customer ultimately makes the purchase. United will adopt the program next month, when its reservations system is merged with Continental’s.

“It’s a value to people like a stock option is a value,” said Jeff Smisek, the president and chief executive of United Continental Holdings. It lets you buy stock at a fixed price. Well, this is an option on a seat.”

So this is a….nonrefundable deposit? With a fancy new name to make it sound more like high finance? Give me a break. I agree that it’s not necessarily a bad idea, but do we really have to adopt such an idiotic euphemism for a retail practice that was commonplace before I was born?

UPDATE: On a related subject, in comments Model62 says:

Just a nit, here, but the checked baggage fees the NY Times writer notes in the story’s intro are not primarily a way to generate more cash flow. They are a tax avoidance scheme; airline FAA fees are calculated based on fares, not the various attached “fees.” The more services the airline can strip out of the fare price and re-add as a fee, the less it pays to the government.

In a way the airlines have been acting like finance types for some time now; quants figuring out the most efficient ways to route traffic around the tax code.

Interesting! I didn’t know that. Still, can’t it be both: a cash flow generator and a tax avoidance scheme?

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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