Commercial airplane tickets are divided up into coach, business class, and first class. In 2014, Etihad introduced The Residence, a premium experience above first class. The Residence isn't very popular.

The reason The Residence isn't very popular is because of economics. A Residence flight is almost as expensive as a private charter jet. Private jets aren't just a little bit better than commercial flights. They're a totally different product. The airplane waits for you, and you don't have to go through TSA (or Un-American equivalent). The differences between flying coach and flying on The Residence are small compared to the difference between flying on The Residence and flying a low-end charter jet.

It's difficult to compare costs of big airlines vs private jets for a myriad of reasons. The exact details of this graph should not be taken seriously. I'm just trying to give a visual representation of how a price bifurcation works.

Even in the rare situations where it's slightly cheaper than a private jet, nobody (except YouTubers) should fly on The Residence. Rich people should just rent low-end private jets, and poor people shouldn't buy anything more expensive than first class tickets. Why was Etihad's silly product created? Mostly for the halo effect. The existence of The Residence boosts Etihad's prestige which, in turn, boosts the soft power of Abu Dhabi.

The Residence shouldn't exist. If Etihad wasn't a state enterprise, then The Residence probably wouldn't exist. That's because there is a price breakpoint in the airlines' industry. Below the breakpoint, everyone flies commercial. Above the breakpoint, everyone flies private.

Luxury Products

The word "luxury", like the word "art", has been profaned by marketing. Personally, I define a "luxury" product to meet the following criteria.

There is a price breakpoint above which the product is fundamentally different.
A small minority of consumers (for a reference class) use the product above the breakpoint.

"Rich" is relative. In the case of flying, the breakpoint is "private jet", which costs tens of thousands of dollars. In the case of wasabi, the breakpoint happens much cheaper.

Wasabi is a popular condiment eaten with sushi. Most of the products marketed as "wasabi" are made out of horseradish.

The ingredients contain horseradish. The ingredients contain little real wasabi root. Xa

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Civilization is FUBAR

Civilization is FUBAR