Published on June 29, 2025 12:10 PM GMT
Airplanes are strange places. Whatever you have on board when you take off isthe most you'll have until you land. Want a sandwich? You can only have oneif there's one on board. There are many things people reliably want, such assome kind of food, drink, and entertainment. Perhaps headphones, a pillow, ora blanket. Airlines provide these, either for free or at some fixed cost. Butpeople's desires are broad, airlines would like to make more money, andeconomically inclined people want to turn everything into auctions and markets.So...
Imagine you load up your seatback entertainment, and one of theoptions is a burrito. But there's only one. You can put in a bid,and 1/3 of the way into the flight the person who bids the most getsit. Surely on an airplane of two hundred people there's at least oneperson with an unusually strong desire for a burrito at 30k feet. Andit's not just burritos: other meals, decent headphones, headphonesplitters, airplane pillows, diapers, charging cables, cozierblankets, a range of snacks, etc. Anything airlines don't typicallyprovide where there's a high chance that someone might want it.
Part of what makes it hard to provision airplanes is that you're expected tohave enough for anyone who might want one. Either you overprovision, or youfind yourself apologizing to some people that you're out; neither aregreat. Auctions allow you to stock a small number of additional things, andsell them to the small number of people who most want them.
Building software and figuring out what to stock seem hard, and not the kind ofthing airlines are good at, so let's say this part is a startup. They make adeal with an airline, provide software to run the auction and tell the flightattendants which things to bring to which seats, and provide the things tosell. The quick way to get started acquiring things is just to hire employeeswho walk around the airport, buying things that the startup has previously seensell well, but long term for non-perishable products margins would be a lotbetter bringing them in through the same screening system used for airportvendors. The startup and airline negotiate a 'budget' in weight, space, andtotal passenger interactions, and they optimize their stocking to make the bestuse of the budget. The airline gets some form of payment, which would besomewhere between a fixed fee (to reduce risk to the airline if the startupis bad at judging passenger desire) and a percentage (to align incentives).
I think the biggest problem is that while in an important sense thiswould be better than the status quo, since worst case you buy nothingand best case you win an auction and so get something you prefer tothe money, in practice I expect passengers would absolutely hate it.The benefit generally goes to people with more money, the onboardmonopoly means that the seller captures most of value, it reduces theincentive for the airline to provide things people want through thetraditional system, and even the auction winners will often find theyoverpaid. Still, maybe there's something here?
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