Saturday, August 09, 2008

Airline Fat Tax

Because of the cost of fuel, airlines are looking for ways to keep their prices the same and yet still make a profit. To do this they've started charging for trivial items that you don't need to consume on a flight like water, pillows, and blankets.

To reduce the cost of fuel that they burn, arguably the only but definitely the largest variable cost that the flight will bear they've started to reduce the weight of the plane by carrying less fuel and replacing the heavy metal food carts with plastic ones.

How else can airlines reduce the weight that they carry and therefore their costs?

One way to do this is to charge each passenger by weight (both body biomass and luggage) instead of by "piece." A person weighing 300 lbs is going to cost more to move across the country than a person weighing 150 lbs. Just ask the pilot of a Cessna.

At first blush this may seem unfair because you're taxing the fat. This is discrimination dammit!

But is it?

Are we not already discriminating against the passengers whose combined body and luggage weight is below the average? Are they not paying an implicit subsidy for their heavier co-passengers? I think so.

If it costs the airline (say) $1 per pound in fuel to fly our biomass and luggage from Phoenix to New York and our total weight is 30,000 lbs then it's going to cost the airline $30,000 in fuel. If that 30,000 lbs is represented by 200 passengers weighing an average of 150 lbs each then the airline is going to have to charge each passenger at least $150 just to cover the fuel costs.

Now consider that 100 of those passengers each weigh 200 lbs and the other 100 each weigh 100 lbs. It's going to cost the airline $200 per heavy person and $100 per light person to move them across the country. The total cost to the airline remains unchanged at $30,000. However, the lighter passengers are paying $50 more and the heavier passengers $50 less for the costs that they contribute towards.

What would happen if an airline were to implement a fat tax policy?
What if they were to diplomatically call it an "underweight discount" instead of a fat tax?
Would that airline attract lighter people?
Would fat people boycott that airline? If they did, that would shift the fuel cost from this airline and onto other airlines. Good or bad?

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