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barrkel • yesterday at 10:42 PM • 0 replies • view on HN

Well actually, price discrimination permits a kind of cross subsidy when there are large fixed costs involved, and flights have substantial fixed costs.

It might not be profitable to fly a route at all if not for high paying customers. But if you can get a few high paying customers and provide return on capital, then extra customers are, relatively speaking, gravy.

And the cheap flights for those customers? Consumer surplus, baby.