Register now for free access to - this week only.

Do airlines and automakers game the pricing system?

According to various news reports, American Airlines will charge extra fees for the first few rows of coach seats. You might figure that those greedy airlines are shafting us again.

Well, maybe. But I suspect there’s another factor at work. It’s one that automakers and dealers know well -- online shopping.

When you shop for airline tickets online, you put in your criteria, wait a minute, and, voila, up pops a list organized by price. How many consumers do you think immediately jump on the lowest price?

It’s very similar to online car shopping. As every salesperson knows, consumers can do very detailed price comparisons online. And it’s changed the business.

One example: A few years ago, General Motors cited online searches as one reason that it went to value pricing -- cutting sticker prices to be closer to the actual transaction price.

GM was offering hefty incentives, but many consumers didn’t get far enough into the buying process to learn about them. They saw that the list price was higher than those of other vehicles, and they moved on.

It looks to me like the airlines are cutting “sticker prices” to grab the online shopper’s interest, then getting the money back with add-ons. Maybe that’s gaming the system, but, hey, price transparency is brutal.

ATTENTION COMMENTERS: Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.