Episodes from Blog

Understanding Basic Economy: Price Discrimination Explained

In this episode, we unpack the concept of Basic Economy fares in the airline industry, a pricing strategy that has become increasingly popular among U.S. carriers. Our expert guest explains how these ultra-restricted tickets serve as a prime example of second-degree price discrimination, allowing airlines to cater to price-sensitive travelers. We discuss the various restrictions that come with Basic Economy, such as no seat selection and last boarding. Furthermore, we delve into the three degrees of price discrimination, exploring how airlines tailor their offerings to maximize revenue. While this strategy has its benefits, we also address the criticisms around transparency and customer satisfaction. Tune in to learn how Basic Economy fares reflect broader trends in consumer behavior and market segmentation.