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Airline ‘fat taxes’ on obese travellers? A bad idea that won’t fly

By on 2 Maggio, 2013

Whyis it that most airlines charge passengers for excess
luggage but do not charge them basedontheir individual weight? At a time of high fuel costs and experimental lifestyle
regulatory action, economists, business analysts and airlines operators have begun
to play with this idea.

Although it initially sounded like an April Fools’ Day
joke, Samoa Air announced on April 1 that it is ready to initiate a plan to
charge passengers according to their body weight. This tiny company is thus set
to become the first airline in the world to embrace a ‘pay-as-you-weigh’
pricing policy: to charge passengers based on personal weight rather than per
seat.

There’s been talk of charging by this method for a
while, and some analystsbelieve this is how we will soon pay for future
flights. It is no surprise that the provocative CEO of Ryanair, Michael O’Leary,
has been flirting with the idea to impose an extra levy on passengers who weigh
considerably more than average.


The concept has recently become the object of serious
academic inquiry in an article by Bharat P. Bhattapublished last November in the
Journal of Revenue and Pricing Management.The author, an economist based in Norway, suggests
three methods of implementing the scheme: (i) a straightforward price per
kilogram, (ii) a fixed low fare with heavier passengers paying a surcharge and
lighter passengers receiving a discount, and (iii) the allocation of passengers
into three bands – heavy, normal and light – with proportional charges. Clearly
only model (ii) ispotentially capableof providing individuals an incentive to
lose weight while, at the same time, rewarding slim people.

This fascinating, yet peculiar, scientific inquiry begins
by observing the obvious:  under the current
fare policy, airlines charge the same fare to all passengers for a flight from
an origin to a destination, everything else being equal except each passenger’s
weight. For example, a 120 kg person pays the same fare as a 40 kg
person for any given flight. This is generally called ‘average price’. Anyonewho hassqueezedinto the middle seatbetweentwopassengers of size knowshow unfairthispricingpolicycanbe.Yet the situation may seem even worse to the 40 kg
person if s/he travels with luggage that exceeds the allowable weight.Assuming
that an airline allows its passengers to check 20 kg of luggage, a 40 kg person
travelling with a 30 kg bag would have to pay extra for the surplus 10 kg. As
such, the passenger would pay more to transport 70 kg (40
kg of personal weight plus 30 kg of luggage) than a larger passenger who
transports 140 kg (120 kg of personal weight plus 20 kg of luggage).
The reason for this counterintuitive result is that airlines are indifferent to
the distribution of costs among passengers: the 40 kg
person subsidizes the extra weight of the 120 kg one.
Indeed, under the current pricing policy, a passenger gets a fixed amount of
weight for baggage and an unlimited amount of weight for oneself.

However, given the high costs of fuel and the inherent
difficulties of the airline business model, operatorshave become aware of the
critical importance of weight on board a flight. As a result, operators are
increasingly desperate to reduce weight.

It is against this backdrop thatthis controversial
pricing scheme is gaining grounds. Yet, ‘pay-as-you-weigh’ pricing raises many
difficult questions: Should passengers be charged based on their body weight,
like freight is? Would it be fairer than the status quo? Would it be
technically and economically feasible to implement the model? And finally,
would it work? In other words, to what extent can these price differentials
provide passengers an incentive to lose weight so that they can pay a reduced
fare? (This remains a big assumption in the relevant literature thus far.)

While all these questions deserve to be rigorously
investigated on both theoretical and practical grounds, I contend that their
discussion must be preceded by a broader policy question: Which is the
normative case for ‘pay-as-you-weigh’ pricing in the airline industry?  For this purpose, we should rewind and pause
on the first question: Should passengers be charged based on their body weight,
like freight is?

While it is true that transport services are typically
priced according to weight, volume, length or piece, these practices have been
applied over the centuries to goods – not to individuals. In other words,
transport modes, such as rail, road, human or pack animals, air and water, have
never been based on weight and space taken by a passenger ceteris paribus. As a
result, charging passengers according to their body weight emerges today as a
new, groundbreaking concept in the passenger travel industry. Hence, so much controversy.

While it is true that all passengers are not the same
with respect to weight and size, and overweight people cause more wear and tear
to the airlines’ seats, it is equally true that charging them on that basis may
immediately be viewed as discriminatory against heavier people. Some people mayretort
that, under the current ‘average fare policy’ pricing, slim people pay for
others’ excess weight. Yet, that’s precisely what both the market and society have
opted for.

Moreover, in terms of discriminatory impact, ‘pay-as-you-weigh’
pricing scores even lower than ‘fat taxes’ as applied to food. Both ‘fat taxes’
and ‘pay-as-you-weigh’ pricing pursue a similar objective: to decrease the average
weight of the population by relying on a market-based mechanism (i.e. price
differential). Yet, the modalities of operation of these two policies differ
substantially. While a ‘fat tax’ on food tactfully influences the future
consumption patterns of a given product, the latter instead penalizes – thus
stigmatizing – the actual physical status of an individual. Along these lines,
‘fat taxes’ on food appear to be less discriminatory in nature and possibly more
promising in terms of social acceptability.

In any event, given the multifactorial nature of
obesity (i.e. food consumption is only one of many possible factors that leads
to this condition), the ensuingstigmatization component of the
‘pay-as-you-weigh’ pricing policy seems per se capable of refutingthe normative
rationale upon which it is built.

‘Pay-as-you-weigh’ flight tickets? They won’t fly.

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