Price Discrimination in Plane Flights

    Through classes, airlines are able to practice price discrimination on their flights. Pure price discrimination is where a seller sells their product at the maximum price that each customer is willing to pay. Through price discrimination, companies are able to obtain consumer surplus for themselves instead of it being wasted as surplus.
    While airlines do not practice pure price discrimination, they do something similar, where they sell their tickets at different prices for a different experience within the plane. For example, a customer that has more money may be willing to pay more for a better seat vs a customer with less money that wants to pay the minimal amount . In both cases, the customer has the same end goal, to get to their destination, but one customer is willing to pay more for the flight than the other. Selling premium seats at a higher cost to customers gives the airline more profit per square foot in the plane, while they are able to minimize losses by filling up the rest of the plane with people who are unwilling to pay the higher price for better seats.
    Airlines also practice price discrimination through pricing of their tickets vs the time until the flight leaves. When customers are planning for flights months in advance, they are likely willing to search around to find the flight that they can get the best deals on, while those that are buying tickets last minute are likely desperate to find a flight and are willing to pay more for their flight as long as it means they can get to their destination. As a result, the airlines price tickets much lower when the flight is a long time away, but as the date comes closer, they raise the prices in order to play to the customer's willingness to pay to get a flight.