Tuesday, August 5, 2008

Elasticity of demand for soft drinks on planes

The economist remarks on the new US Airways policy of charging for water and soft drinks in coach. I learned about the policy on Friday night when I flew back from DCA on US Airways. The mid-sized plane was full. I think they sold 4-5 soft drinks. This seems like useful information for the airlines.

Back in my UWO days I did a lot of flying on Southwest from DTW to MDW. One time after an especially long delay the pilot offered free drinks (including liquor) for all. That is a very good way to improve passenger morale.