 Solution

The principal coefficients are $A=-xy$, $B=0$, $C=1$, in the convention $A{u}_{xx}+2B{u}_{xy}+C{u}_{yy}$. Their discriminant is $B^2-AC=xy$. Thus it is a hyperbolic partial differential equation where $xy>0$ and an elliptic partial differential equation where $xy<0$. Its principal part has parabolic type where $xy=0$; however the full equation contains $u_y/y$ and is undefined on $y=0$. On its actual domain $y\ne 0$, the parabolic locus is $x=0$.

The characteristic equation of a partial differential equation isIn a hyperbolic region this gives two distinct real characteristic directions. The singular lower-order coefficient should not be mistaken for an ordinary parabolic point of the full equation on $y=0$.