Should Government Set Airline Seat Sizes? A Pricing Perspective

airplane-698539_960_720Sen. Chuck Schumer wants to require the Federal Aviation Administration to establish seat-size standards for commercial airlines, which he says now force passengers to sit on planes “like sardines.” (See the article here.)

This blog isn’t about the politics of the situation, rather I focus on the interesting pricing implication.

At first glance, this doesn’t seem necessary.  After all, many airlines are now offering three levels of seating.   I’m most familiar with American, so let’s just focus on them.

First class – The seats are large, comfortable and there is plenty of legroom.  They typically have 4 seats across total.  Oh, and they are expensive.  A roundtrip flight a month from now from SFO to LGA costs $1247 in first class.

Choice (Economy) – This is the back of the plane.  6 seats across, very little legroom.  The same SFO to LGA flight is $560.

Main Cabin Extra – for an additional $260 (or a total of $820) you could sit toward the front of the main cabin where they give you up to 6 inches of extra legroom.

Here’s the point.  If people want more legroom, they can pay for seats that have more legroom.  The options are available.  So my initial reaction is there is no need for government intervention.

HOWEVER …

Sometimes peoples’ purchase behaviors cause themselves problems and maybe the solution is to have government protect people from themselves.

When most people buy plane tickets they go to Expedia or Travelocity, enter their starting airport, the destination, and the dates they want to fly.  They then trade off different times or airlines for money.  Most people take the cheapest flight.  They are paying for transportation from one location to another, not a comfortable experience (obviously).  Notice that buyer do not consider legroom when making this decision.   Hence, airlines have incentive to continue to take away legroom.

For kicks, here are some calculations for American.  If they have 26 rows of seats at a 37″ pitch (distance from seat to seat) and reduce the pitch to 31″ (the current standard), then they can now squeeze in another 5 rows of seats.  That’s a 19% increase in the number of passengers they can carry.  Think of that as a 19% increase in revenue.  As long as the planes are full (which they seem to be) and passengers keep buying these tickets, they have financial incentive to continue to shrink our legroom.

There may not be an end to this.  Maybe the only solution is government intervention.  If we as buyers don’t use legroom as one of our decision criteria, then what other solution is there?

One non-governmental solution would be if Expedia, Travelocity and other retail sites specified the number of inches of legroom you get for each flight.  Then maybe shoppers would use this as a criteria which may incentivize airlines to give more legroom.  Absent the information though, shoppers just go for the lowest price which incentivizes airlines to continue to take legroom away from passengers.

Another possible solution is if an airline used this as a point of differentiation.  I flew Southwest the other day and that plane seemed to have more legroom than the back of the plane on American.  However, that information isn’t available when we make purchase decisions.  If this is such a big issue, some airline should be able to use it to differentiate themselves.  If it works, that would drive other airlines to give us a little more legroom too.

I’d rather see market solutions to this problem.  However, in the absence of information or some airline taking the lead, maybe we do need the government to protect us from our own decision making.

 

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