American Increasing Cost Of Alcoholic Drinks In Economy

As reported by @TheForwardCabin, American Airlines is increasing the cost of alcoholic drinks in economy as of October 1, 2018. They’ll be increasing the cost of drinks by one dollar across the board, meaning that the new prices will be as follows:

  • Beer: $8
  • Wine: $9
  • Spirits: $9

American says that these price increases are being made to “help continue the investment” they’ve made in “more craft beer choices, premium liquor and new wines onboard.”

As before, beer and wine are complimentary on flights to and from Europe, Asia, select Latin American destinations, and flights between Dallas and Hawaii. Beer, wine, and spirits are complimentary on flights to and from Hong Kong, Tokyo, Sydney, and Auckland.

This price increase comes shortly after American introduced free alcoholic drinks for Main Cabin Extra passengers, so perhaps they’re trying to make up for the lost revenue there by increasing the price of drinks for those in “regular” economy.

For me this raises the question of the elasticity of demand for alcoholic drinks in economy. I remember back when drinks were consistently $5-6, which is less than you’d pay for an alcoholic drink in most major cities (though I guess even that varies — in NY or LA a glass of wine might be $15, while my dad is offended when anything is more than his $3 happy hour pride in Florida).

I would imagine pricing wine at $8-9 onboard would make many people think twice, though perhaps the flying experience is so unpleasant that many people will drink regardless of the cost. I’m sure American has run the numbers on this.

As a point of comparison, let’s look at how pricing on Delta and United compares.

Delta:

  • Beer: $7-8
  • Wine: $8-9
  • Spirits: $8

United:

  • Beer: $7.99
  • Wine: $7.99-15.99
  • Spirits: $7.99-9.99

How elastic do you think the demand for alcohol is in economy? At what price would you no longer buy drinks in economy?

Comments

  1. Even at $9, drinking on a plane continues to be a steal. Maybe this is just an NYC perspective, but that is substantially less than you would ever pay at a bar or restaurant. Add to that the fact that on a plane you are captive and have nowhere else to go, so that you would expect things to be a ripoff. I would expect airplane liquor prices to be similar to hotel minibar prices, but they are in fact much lower.

  2. I know it’s against the rules, but I bring 1-2 mini bottles… it’s more about bringing the spirits I like than price.

  3. $9 is not substantially less than what you would pay, even in New York. It’s not hard to find an $8 pint of beer anywhere in this country (NY/SF included), and that’s for a pint of real craft beer, not a barely cold 12 Oz can of Goose IPA.

  4. It isn’t even against the rules to drink the ones you’ve brought onboard. It’s (generally) only against the rules the drink anything “not served” by a flight attendant. You could technically make aware to the FA your 1-2 mini’s and have them served.

  5. I guess i’m the only one that cares, but i already thought the prices were too high. This is enough to influence me away from a drink the majority of the time.

  6. Being cheaper than bars and restaurants doesn’t make it a good deal, bars and restaurants are total ripoffs. $8 for a pint is still ridiculously expensive, I have no problems finding craft pints for $5-6 in the SF Bay Area. A six pack of craft beer is typically $8 retail, this is a 5x markup.

  7. @ Sam — You are delusional. Last time I checked, the going price for a beer at a bar was $5-$6 ($3-$4 on a happy hour special). You need to go to a different bar.

  8. And beer and wine are still free in economy on the shuttle. It’s the shuttle’s last unique feature (aside from frequency).

  9. Although this is a rip off it is not much different than what you pay at a stadium attending a game for NFL, NBA, MLB, etc… I prefer to drink at my home so I drink what I want at the price I want. I will take a free glass of Dasani “tap” water on the plane.

  10. @joe it is agains federal regulations to consume an alcoholic drink not served by a flight attendant. In the old days you could bring a bottle of bubbly and ask a flight attendant to chill it for you. Don’t think that works anymore.

  11. I don’t know. Seems a bit high to me but I don’t live in NYC. This is more than cruise ship pricing. I do get a discount with the credit card and MCE now gets free (I think) liquor on the back of other economy passengers.

    It’s like movie theater pricing without the movie (IFE) 🙂

  12. As long as Spirit doesn’t up the cost of their BuzzBalls ™. Now that would be a case study in elasticity!

    I get a chuckle on Alaska flights. During the safety protocol they mention that passengers are ‘prohibited from drinking their own alcohol aboard’. They say nothing about drinking my companion’s booze, so I suppose that’s okay? 😉

  13. Still better than wine prices in NYC, though maybe not for beer. Grand Banks in NYC serves $10 Tecates. My favorite wine bar starts around $14/glass. Plus tax and tip. Granted, my decision making is flawed – rather than say “I could get this $15 glass of wine for $15 a bottle and save 75% by drinking at home!” I say “this $30 bottle of wine at the liquor store would be $30 a glass in a restaurant – I’m getting a steal!” 😉

    As long as I’m going to be jammed in economy in a metal tube flying through the air, you bet your ass I’m drinking. Even a mediocre wine tastes good when it’s distracting you from being 35,000 feet high with hundreds of strangers.

  14. I do not pay more than 50c a can of bottle of beer even at a grocery store.

    I haven’t had a drink in ages. On the flip side I don’t find myself in a bind like the drunken frat boy kavanugh.

  15. It’s a shame that we judge airline prices based on NYC prices. Thankfully, most of us aren’t subjected to those price points.

  16. Isn’t funny people responding on here are justifying this. You do know a mini cost’s AA like .25 cents right. A beer is $1.00 that’s a dam good profit. Maybe a beer should be Singapore prices $20 🙂

  17. At $9 for that plastic bottle of wine I would likely say no. At least for a branded spirit one knows the quality.

  18. Personally I think you’d have to raise prices even higher before you’d see substantial drop in onboard purchases.

    You don’t need to compare the onboard pricing to NY/SF bar price points, just to any airside bar in virtually any airport terminal, and these prices seem quite in line with that. Air travellers are the ultimate captive audience, and will pay.

    As an aside, this adds incremental value to elite status which lets you select MCE for free.

  19. Here’s my run-down:

    1) The pricing sucks;
    2) I personally don’t care: if its free, I’ll drink. If not, I won’t.
    3) and I’m surprised no one has said this: the drink selections really are not half bad! At a time when even major international carriers are only offering Heineken or Amstel, AA actually has some comparatively good beers on board. I usually get a Sam, but this month, its been 3-4 Sam Octoberfests every flight. And if this means someone else is paying a dollar extra … okay, fine.
    4) DOES pricing matter? I am thinking here of all those 8 am flights to the islands from Miami. Everyone on there is so ready to vacation that they’re buying booze an hour after they woke up…I doubt the price matters….
    5) Still love Endre.

  20. I thought we were all getting drunk in the Centurion loung and the stumbling in to our first class or business seat and getting it for free?! (I wish 🙂 )

  21. Apparently JetBlue actually does allow BYOB, though per the discussed FAA regulations, you have to ask the flight attendant to serve it to you. For practical purposes, your limited to what you can get past the security checkpoint or purchase in. The terminal.

  22. Btw you and me I keep a few minis with me for the flight and just get coke or seltzer to mix with.

    I think $6-7 is an appropriate price. $9 is nuts. That said I do enjoy United and their $15 half bottles of wine. Would gladly pay $15 for decent wine over Delta and their $7 swill.

  23. As an Australian, I find it so amusing to read these comments. In a market as competitive as the US I would’ve thought that pricing would be more competitive too. Meanwhile in Australia, Qantas charges $6 AUD ($4.30 USD) for a glass of genuine quality Australian beer or wine on domestic flights in Economy.
    However, I guess Qantas makes up for it in how much more expensive their tickets are to begin with.

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