Airlines are indeed a great case! But accounting margins tell one very little about the surplus being allocated. Much of the apparent progressivity comes not from price discrimination but product differentiation, a much less fraught strategy. 1/

If people have the choice between a no-frills $200 ticket and a wider seat in row 3 for $2000 and they choose the wider seat, more power to ‘em. 2/

If Delta starts using fine-grained data analysis to sell the same seat to me for $1000 when I have a funeral to attend as it would have sold to me for $100 on a discretionary vacation, that will be bad. 3/

The relatively benign view you have of airlines comes from the fact that an important class of customers volunteers to pay a whole lot when they were free to choose an inexpensive offering if they wanted. 4/

If that’s what you mean by price discrimination then I’m all for it. But it’s not what (first-degree) price discrimination means. /fin