28.11.11

SEPARATING EQUILIBRIUM.

Via Media writes in praise of the new Airline First Class.
Emirates Airlines, for instance, offers showers at 36,000 feet. It seems like just yesterday when first class simply meant a few extra inches of legroom. The changes in coach, Via Meadia is told by reliable informants, have mostly been in the other direction, where microwaved food nourishes the masses as they get intimate with their neighbor in a war over the armrest.
Some things, though, are as old as the attempt by a transportation provider to segment the markets.
The growing disparity between coach and first class may set off a predictable alas and alackaday session of breastbeating by the equality police, but on planes as on the ground, the rich do at least a little something for the poor.  Because first class makes 40-50% of an airline’s revenue yet only accounts for about 5% of all seats on “long-haul” routes, coach fares are substantially cheaper than they would be without the rich folks up front.

This isn’t much comfort to thirty and forty year old road warriors still stuck in the back of the plane, but it is great news for the young.  Today’s kids are much better traveled than past generations of Americans, and despite high fuel prices and taxes, fares remain a great bargain by historical standards.
That passage reminded me of something a nineteenth century economist wrote about making the third class carriages sufficiently miserable that the well-off patrons would pay the premium fare and ride first class.  Here might be the real Walter Bagehot on that topic.
The proper change would have been to have let fares alone, but to have given the present first-class accommodation for the present second-class fare, and then introduced an improved first-class carriage for those whose desiderata are quiet and comfort.  The companies err by not giving enough quiet and comfort for the additional prices which they now charge to first-class passengers as compared with second and third-class.
I'm not sure if the essay is responding to measures in Parliament that required improvements, for passenger safety and health, in the condition of third-class passenger accommodations, which on the early British railways, were often nasty and brutish.

The Via Media essay might be written in contemplation of latter-day egalitarians imposing sumptuary taxes on first class.  Francis Y. Edgeworth analyzed something similar, again involving railroad tariffs, in which he cannot rule out the sumptuary taxes lowering first-class fares.  What intrigues, though, is that the railroads got away from three classes of passenger accommodation (for a long time, the British had first and third, the latter now becoming "standard" and ticket agents understand what a Yank means by "coach", with second abolished) while airlines went from F/Y (first and coach) to first, business, and sardine.  And what kind of first class is it that you get to board first, only to have all the business and sardine class passengers walk through your section, beverage service notwithstanding.  Humph.  To this day, Amtrak still marshals the business class section (it's not quite first class with individual rotating seats) at one end of the train, and if the conductor knows his or her business, the food service attendant is minding the door.

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