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.
- Beer: $7-8
- Wine: $8-9
- Spirits: $8
- 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?