Should airlines show you all available seats on a flight?

Check out these two images from the Wall Street Journal (Airline Seats Available for Elite Fliers Only, July 12). Both show available seats on an American Airline flight from LA to New York. The first shows what’s available if you lack any status in American’s frequent flyer program. The second shows what seats are offered to a flyer with sufficient status in the frequent flyer program.

To be clear, these seating charts are for the same flight at the same time — all that differs in one’s frequent flyer status. Further, while this example comes from American, other airlines play similar games.

Unlike American, Delta Air Lines shows the Preferred seats it has held back for elite customers, but doesn’t allow regular customers to book them until 24 hours before departure. At that time, Preferred seats are offered for a fee to nonelite-level customers.

US Airways also blocks seats for elite-level customers and labels them Preferred. The airline sells what it calls Choice seats in rows near the front of the cabin for $5 to $99 one-way that don’t have extra legroom but do have early boarding privileges. On the whole, US Airways says 9.5% of its coach seats are labeled Choice. Preferred, Choice and exit-row seating, which is sometimes sold for a fee, account for an average of 30% of coach seats on the airline’s planes.

Those seats open up to customers without seat assignments who don’t want to pay starting 24 hours before departure, US Airways said.

Not to surprisingly, a lot of customers find these games rather annoying. In the American example, there is one seat to be had for free for a non-elite flyer in what can only be described as a crappy location. The article has this wonderful quote “American says it doesn’t think blocking open seats from view pressures customers into paying for extra-legroom or Preferred seats.” which makes you wonder whether the folks at American are naive or dishonest.

I first should acknowledge that airlines has every right to allocate seats as they see fit. All sorts of firms offer better or exclusive deals to particularly large or loyal customers. However, there are some differences between what airline are doing and what, say, a typical retailer might do. For one, denying an assigned seat potentially imposes a lot of risk on the ticket buyer. Having a ticket does not necessarily guarantee flying and would-be passengers might legitimately worry that not having an assigned seat might increase the chance of being bumped from a flight. That is, the assertion that limiting the seat selection is not coercive is truly disingenuous when the potential downside of not buying is having your entire vacation disrupted.

Then there is the issue of information asymmetry. American has far better knowledge about how the plane will fill out than a passenger does. This would also be true for Delta. They may show how many seats they are currently setting aside for elite customers but they are better able to estimate how many of those seats will be available for the hoi polloi come time for taxi and takeoff.

This last point is the most challenging aspect for customers. They are being forced into a lottery with no really solid way of estimating their odds of winning. Having said that, I am not sure I see a better way of running the system. The airlines have a legitimate reason for holding back above average seats for favored customers and that inherently limits the choice of non-elite flyers.