The drastically different seat tiers on airplanes are a prime example of 'price segmentation,' which is key to keeping airlines profitable.

Nearly 3 million people fly in and out of US airports every day—but not all of those passengers generate revenue for the airlines they purchase their tickets from.

Read about different levels of price discrimination

Price discrimination is a business practice in which different customers are charged different prices for the same product or service. It's one way for a business to boost profits and take advantage of its market position. There are three levels of price discrimination, differentiated by the consumers targeted and the reasons for discrimination.

Some airlines—like American Airlines, which started the first modern airline loyalty program—have loyalty programs with higher valuations than the airline itself.

Many budget airlines rely on baggage charges and other extra fees to make money.

Commercial air travel's early days: Flights were short, cold, depressurized, and generally comfortable

After World War II, airlines competed for their high-end passengers by offering cocktails, meals, and plush seats, cultivating the image of the elite "Jet Set." By the 1960s, air transport was completely changing global trade and offering big profits to companies able to ship via plane.

Find out how airlines quietly became banks

Some experts suggest airlines lose money on every flight. This video dives into how airlines have leveraged their loyalty programs to make billions of dollars, effectively evolving into banks.

Jet fuel is expensive—which is one reason why it's tough to make an airline profitable

Jet fuel is typically a commercial airline's second-largest expense, second only to labor. Oil prices can be volatile—there have been recent significant increases in jet fuel prices given the 2026 Iran conflict, for instance.

Southwest Airlines was profitable for nearly 5 decades, offering free whisky, cheap late-night tickets, and free-for-all seating allocation—despite how hard it is to make money running an airline.

NFL stadiums are designed to maximize profit, not number of seats

Most stadiums are actually getting smaller as the cost of land rises. Owners have sought to increase returns by designing prestige suits and clubs (rather than just more general admission) and laying out the stadium to maximize customer purchases.

Aviation expert breaks down the safest seat on an airplane

The bottom line is air travel is very safe—much safer than road travel. But you can always up your chances. So, here's one expert's take on the safest seat on an airplane.

An oligopoly is a market structure where a few large businesses dominate the entire market

When a few large companies dominate a market, changes in pricing for goods and services affect the entire market. Airlines are a common example of an oligopoly. Because the barrier to entry in the aviation industry is high, only a few airline companies offer the majority of the industry's services. While there is some competition, pricing across the board is largely intertwined and based on other companies' prices.

When modeling the fastest way to board passengers onto an airplane, research shows that random boarding is often faster than boarding in groups.

A nightmarish vision for airplane seating

Airplane seat designer Alejandro Núñez Vicente reckons his double-decker airplane seat could revolutionize budget air travel. CNN went to the 2022 Aircraft Interiors Expo in Hamburg to try it out.

Find out how airline mergers created some of today's largest airlines

Four airlines dominate the US commercial airline industry: Delta, United, Southwest, and American. Many of these large companies secured their top spots in the industry via a series of mergers and acquisitions starting in the 1970s, when American acquired Trans Caribbean Airlines.

Modern examples of oligopolies include the airline industry

An oligopoly is a market structure dominated by a few key suppliers. In the US, as of 2021, just four airlines (Delta, United, Southwest, and American) controlled nearly two-thirds of all domestic flights, making the US airline industry one example of an oligopoly.

In 2024, US airports generated over $1B of revenue—partly due to overpriced airport food

Some in the airport industry argue that charging street prices in airport restaurants isn't sustainable because it's more expensive to run a business inside an airport.

Tranches slice financial products into segments

Specifically, tranches are slices of securities (think: bonds or mortgages) divided by risk and characteristics to attract different investors with a variety of risk tolerances.

Listen to an account of an 'airplane game' leader, a notorious, widespread illegal pyramid scheme that swept across the US in the 1980s.

Read about 'skiplagging,' a money-saving travel hack.

Peloton makes most of its money via monthly subscriptions

Peloton has two core revenue streams: the exercise equipment it sells and the company's monthly subscription that gives users access to its class library. More than half of Peloton's revenue comes from the company's core product, the monthly subscription. Its "Peloton App+" membership tier is $28.99 per month.

Learn about the bodies that govern the US commercial airline industry, such as the FAA

The Federal Aviation Administration (FAA) regulates US air travel, monitoring both safety and advancement. But despite deregulation in the 1970s, the industry has other governing bodies, too, including the US Department of Transportation and the TSA.

All-you-can-eat buffets are a practical demonstration of economic ideas

Economists have noticed some restaurant goers prefer a flat pricing model despite it usually being more expensive than per-dish costs. The strategy behind endless servings includes concepts such as economy of scale, cross-subsidization, diminishing returns (of enjoyment of excess food), and more.

From flowers to venues, seemingly everything gets a price markup when it's for a wedding

At the start of this video, a venue gives two people drastically different prices for what seems like essentially the same service: a family gathering and a wedding. These price differentials feel so ubiquitous across the wedding industry—and experts attribute this to quality of services for weddings versus other, more casual events. Learn more by watching this video.

The turbulence experienced in airplanes results from unexpected changes in airflow

Pilots rely on forecasts, onboard tools, and air traffic control to avoid regions of severe turbulence during flight. Turbulence is generally weaker for those sitting in the front of the main cabin and for morning flights that follow cooler nighttime temperatures.

Credit card companies make money through interest, annual fees, and more

They also profit from interchange fees, the fee the retailer has to pay the credit card network in order to facilitate a transaction. The fee is typically between 1% and 3% of the transaction amount.

American Express runs on a 'spend-centric' model, using perks and merchant fees to drive profit

American Express cardholders tend to spend more money per transaction than other credit card users, which makes the interchange fees merchants have to pay to accept American Express cards worth it while incentivizing other companies to pay the interchange fee as well.

Mutual fund share classes are rankings of different types of services for investors.

Airbus is a rare European industrial success story that overtook a rival American firm

After World War II, the US dominated aviation, particularly Boeing. To compete, Europe's major industrial nations pooled resources to form Airbus, a customer-centric airplane manufacturer. Its A320 family of planes became the most popular in airliner history, leading to profitability in the 1990s. Amid Boeing's major hurdles in recent years, Airbus remains the industry leader.

Airplanes generate enough lift to fly by accelerating air faster over their moving wings, which makes the pressure above the wings lower than the pressure below.

The economics of ski resorts

More than 480 ski resorts pack in nearly 65 million visitors each year in the US for historically high prices. Daily lift tickets may cost three figures at many locations. Amid industry consolidation and more stringent land use regulations, ski resorts are upping their prices—a factor that does not appear to be dampening the sport's popularity. Learn more here.

'Breather holes' in airplane windows help manage cabin pressure

Airplane windows have three layers of acrylic: the super durable outside layer, the inner pane which acts like a "scratch" surface, and the middle pane with the tiny hole. This bleed hole allows pressurized cabin air to be borne by the strong outer pane while preventing the inner pane from breaking.

See a visual of the largest airlines in the US by market share.

Billionaires are racing to space to control future markets

Although different companies have described focuses ranging from luxury tourism to Martian space colonies, all are building infrastructure to capitalize on the shift away from government-only control and betting big on reusability and scale. By securing public contracts and subsidies, they aim to develop strategic partnerships toward dominance in low Earth orbit.

Companies often use different share classes, like Class A or Class B, to structure ownership

Share classes refer to specific types of company stock that are distinguished by the rights they grant, such as voting power and dividend access.

Many airports have dedicated stores for luggage, despite most passengers having luggage with them already

This podcast episode argues that airport luggage stores exist due, in part, to the security measures implemented after 9/11, creating capitve audiences of travelers. Some argue that airport luggage store shoppers coming from places where luggage is more expensive could be purchasing luggage in international airports. Specifically, the episode traces airport history from the very beginning to today's luggage store in your local Terminal B.

Learn more about the four main market structures

In modern economic theory, there are four main market structures. Under each market structure, firms (or businesses) have differing levels of competition and reach different levels of price efficiency based on the consumer's willingness to pay for a product or service.

Dual-class stock structures separate equity and decision-making authority

In the past few decades, dual-class stock structures have become an increasingly popular way for companies to raise capital in public markets without allocating traditional shareholder voting rights. Meta, Estée Lauder, and The New York Times are companies that are famously dual-class.

Airports at high elevations, like Denver International Airport, have longer runways than most airports because airplanes cannot take off or land as quickly in thinner air.

Pilots are familiar with multiple types of turbulence, each with varying severity

Each type is defined based on what disrupts airflow in the atmosphere, including thunderstorms, mountains, and wakes produced by aircraft that previously took off. Pilots classify turbulence as light, moderate, severe, or extreme based on how it affects aircraft movement.

Raising the price of a Peloton bike increased the company's early sales—and that's part of why the bikes are so expensive

The original Peloton stationary bikes sold for about $1.2K, but Peloton founder John Foley said that price point made consumers skeptical of the product's quality. After increasing the price of a bike to $2K, Foley said people started to believe it was a quality product, and sales soon increased.

Smart pricing algorithms can unintentionally work together to raise prices

Researchers have found that, through trial and error, algorithms designed to adjust prices based on market data can learn to mimic price-fixing tactics, even without explicit programming to do so. Over time, they "learn" that it is more profitable to avoid price wars and keep prices high when competitors lower prices.

Dollar stores often place staple items at the back of the store so customers encounter other less-necessary items on their way there, leading to impulse buys.

The prices on prediction markets reflect how the collective forecasts future outcomes.

Hear about the debate over free public transportation

Free public transit boosts economic opportunity and social mobility and is better for the environment. So why do we charge for it? Opponents of free transit cite revenue losses threatening service quality and data showing that free fares don't translate into reduced car use.

One of the most important pieces of Amazon’s corporate empire? Its Prime subscription business

Prime drives customer loyalty and boosts Amazon’s revenue through its monthly and yearly fees. The key components included with a Prime subscription include free two-day shipping on eligible items, as well as access to services like Amazon Music and Prime Video.

American Express intentionally targets wealthy cardholders, who spend higher amounts per transaction and tend to make more transactions than the average cardholder, thereby reducing the company's risk.

As of 2022, Blue Origin, Virgin Galactic, and SpaceX are the primary space tourism companies

Blue Origin offers 11-minute suborbital flights for $28M, while Virgin Galactic provides a 90-minute suborbital flight for $450,000. SpaceX offers orbital flights for $55M, including trips to the International Space Station, and plans to offer civilians trips to the moon by 2030.

Dating apps adopted 'freemium' business models as the market became more saturated

As dating app user growth slowed and companies like Tinder saw increased competition from upstarts like Bumble and Hinge, the industry has pushed for subscription tier adoption due to pressure from investors for predictable profits and more.

Who actually pays for your credit card rewards?

In 2018, 92% of all credit card spending was made on a rewards card, which seems like a good deal to many who apply for rewards cards offering discounted flights, points, and more. But in actuality, the customers are often the ones who end up paying for the rewards in the grand scheme of things.

Soda is one of the most overpriced items at restaurants

All restaurant food is marked up—that's how they turn profits, after all—but soda is one of the most egregious. Fountain soda is remarkably cheap, with restaurants often paying a few cents for each glass before selling it for a few dollars. Food publication The Takeout estimates that the typical markup is around 1,000%.