How Airlines Make Money from Those “Basic Economy” Fares
March Madness is over, even though your bracket was most likely crumbled since round 1. Here’s your midweek edition of the most interesting economics stories across the market.
The Economics of Airlines’ Basic Economy Strategy
The rise of cheap basic economy fares loaded with restrictions is the latest strategy in the chess match between airlines and corporate travelers. Delta, United and American airlines, are expanding basic economy fares to all their domestic routes, not as a means to compete against discount carriers like Spirit, Frontier, and Allegiant, but to get business travelers to spend more. Basic economy tickets lack advance seat assignments, typically board in the last group, often prohibit carry-on bags in overhead bins and aren’t eligible for upgrades or any kind of changes — these frustrations have led most corporations to block economy fares from their displays, according to travel management companies.
Africa Creates World’s Largest Economic Free Trade, Since WTO
African leaders have just signed a framework establishing the African Continental Free Trade Area, the largest free trade agreement since the creation of the World Trade Organization. The free trade area aims to create a single market for goods and services in Africa, potentially create economies of scale across continental Africa.
China Hits U.S. Goods With 25% Tariffs as Trade War Continues
China has increased tariffs by up to 25 percent on 128 U.S. products, from frozen pork and wine to certain fruits and nuts, escalating a dispute between the world’s biggest economies in response to U.S. duties on imports of aluminum and steel. Meanwhile, Trump administration plans to unveil new tariffs to a list of advanced technology Chinese imports targeted for U.S., a move expected to intensify trade tensions between the world’s two largest economies.
Economic Data Shows Punishing Reach of Racism for Blacks
The NYT wrote a new study of income inequality, which followed 20 million children in the United States and showed how their adult incomes varied by race and gender, reflected their economic outcomes. The research was based on data about virtually all Americans now in their late 30s. One striking finding from this study is that white boys who grow up rich are likely to remain that way, while black boys raised in similarly wealthy households are more likely to fall to the bottom than stay at the top in their own adult households.
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What Else I’m Currently Reading
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Spotify IPO By The Numbers,
The Secretive Financial Engineering For The Costs Your Prescription Drugs
Thank you for reading through this mid-week round-up! Hope you found a couple interesting articles to spark your next happy hour conversation.
Cheers,
Valentine.
