Usually it is annoying when you have to board an aeroplane via a shuttle bus rather than an airbridge. The exception is when the plane is a 747. That’s because, with the single exception of Lincoln Cathedral, the Boeing 747-400 is the most beautiful thing ever conceived by the mind of man. Any chance to see one at close quarters is a delight.
But aside from the engineering, the most beautiful thing about a long-haul airliner is the economic wizardry which keeps it flying. On board are a variety of seats from the sybaritic to the spartan for which people have paid wildly varying amounts of money, even though each seat will reach the same destination in the same length of time. You may find this class division offensive. However, if you were to try to make aircraft egalitarian, the system would collapse. Without the people in the front paying handsomely to sit in splendour, many of the people in the back could not afford to travel at all. An airliner is in some ways slightly socialist — it redistributes wealth through voluntary means.
This redistribution works in both directions. You can operate business-class-only flights. Indeed, if you can fill them, these are highly profitable. But there is a problem here. Business travellers prefer airlines which offer frequent flights to their destination, since they value flexibility and wish to avoid needless hours or days spent away from home. Without economy class passengers, you cannot operate sufficiently frequent flights to suit business schedules. Hence almost all long-haul airliners are symbiotically configured for mixed classes.
I sometimes suggest that we would similarly benefit from having different classes of travel on the London Underground. If the first two carriages in each train cost three times as much as the others but offered free Wi-Fi, and were furnished not with basic seats but with the sumptuousness of an Edwardian-era New Orleans brothel, you could afford to run more trains. Almost everyone finds this idea repellent.
But I’d like to issue a challenge to any libertarians, economists, ethicists or software gurus reading this column. How do you get people with wildly differing willingness or ability to pay to fund some common good other than through redistributive taxation? I am thinking specifically of my daughter’s bus journey to school.
I have twin daughters who go to different schools. One school offers a bus service, the other doesn’t. In the second case, along a 14-mile route, we need as many parents as possible to sign up to fund a bus pool. The problem arises because parents have a widely varying ability and willingness to pay — I would guess between £15 and £3 a day, depending on wealth, distance and available free time. It is still worth picking up children whose parents would only pay £3, since it reduces the cost for everyone. If we were to adopt the airline system, it would be easy. Children paying £15 would sit on thrones at the front of the bus enjoying a shiatsu massage while those whose parents paid only £3 would be forced to sit on a spike. But school buses aren’t kitted out like this.
My contention is that it should be possible to devise software which solves this problem: everyone secretly reveals what they would be willing to pay, and an algorithm generates a mutually agreeable ‘fair’ pricing scheme. An online auction would not work, since there are more seats on a bus than there are children on the route. How can you avoid people gaming the system? The price each parent pays could theoretically be kept confidential, but in reality would not remain so. Suggestions on a first-or second-class postcard, please.
Rory Sutherland is vice-chairman of Ogilvy Group UK.
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