Airlines should charge for overweight passengers, economist ...

Airlines around the globe have gone to great lengths in recent years to reduce the weight they carry, with an eye to decreasing fuel requirements and increasing profit.

The Great Seat Squeeze: How airlines are trying to pack more people on a plane without anybody knowing

Without much fanfare, WestJet Airlines Ltd. has been quietly rolling out some strategic changes to its fleet of Boeing 737s in recent weeks, altering the cabin configuration fairly dramatically to add a new class of seating, all the while packing in more travelers in the rest of its planes.

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That was especially true when soaring fuel prices in 2008 threatened to upend the industry ? a year before the recession actually did. But one economist suggests airlines haven?t gone far enough, that it?s time airlines built a system to monetize their greatest weight variable: the passenger.

Removing excess weight from an aircraft can have a tremendous impact on overall profitability and allows it to be more competitive by keeping fares lower.?WestJet Airlines Ltd., for example, has gone to extraordinary measures to reduce weight, from shrinking the size of its in-flight magazine and printing it on lighter paper stock to using a lightweight paint on the aircraft.?Simple things like switching to lighter service carts are saving roughly 1.8 million litres in fuel a year, the carrier said.

Air Canada has done the same, switching to lighter seat covers, carpeting, and even using iPads on flight decks rather than manuals, which save about 40 kilograms per flight.

Both airlines are reducing the amount of water ? even the amount of fuel ? they carry on shorter flights to lighten the load.?The benefits are clear ? Air Canada estimates that for each kilogram it removes from one of its Boeing 763 aircraft, it will save 3,925 kilograms of fuel every year.

At the same time, while charging for excess weight for checked bags has long been the standard, charging to check a second bag ? even a first ? has become common.

Air Canada and WestJet will also be rolling out higher-density cabins in the coming months using lightweight seats that allow for more passengers without overly impacting comfort or the weight of the aircraft.

Many passengers ask why airlines only charge for overweight baggage but not for overweight passengers, if weight is the key concern for an airplane operation and more weight results in more fuel consumption

But while passengers might be already feeling the squeeze, an economist from Norway has another modest proposal for airlines to better balance the weight they carry with the revenue they collect by charging passengers based on overall weight ? including themselves and their luggage.

Bharat Bhatta specializes in econometrics and choice modeling and is an economist working as an associate professor in Sogn og Fjordane University College in Norway. He argues that more airlines should consider a ?pay-as-you-weigh? model for ticketing where those who weighed more than the average passenger would pay more, while those who weighed less would get a discount.

In the March issue of the Journal of Revenue and Pricing Management, Mr. Bhatta wrote that the model would not be discriminatory toward obese people and would also strike a better balance for those who are underweight.

?A passenger gets a fixed amount of weight for the baggage and an unlimited amount of weight for oneself under the status quo,? he wrote in the article.

?Many passengers ask why airlines only charge for overweight baggage but not for overweight passengers, if weight is the key concern for an airplane operation and more weight results in more fuel consumption,? he added.

To be clear, no airline has openly discussed implementing such measures since Irish low-cost carrier Ryan Air first floated the idea in 2009 after nearly a third of its passengers responding to an online survey said they supported the move.

Richard Bartrem, WestJet spokesman, said he believes no carrier, even the ultra-low-cost carriers, has taken the step yet because of the backlash they would receive from consumers.

?The public uproar would not be worth the risk, ? he said. ?Who would want to be the one to take the first step??

But the Canadian Transportation Agency has no specific precedents that would prevent such measure from being implemented, said Chantal Laflamme, a spokesperson for the agency.

The Supreme Court did uphold the CTA?s one-passenger-one-fare policy in 2008, which now prevents Air Canada, WestJet and Jazz from charging the disabled for a second seat, including those who are considered disabled by obesity and unable to fit in a single seat. But the regulations in Canada do not apply to people who are obese but not disabled as a result of their obesity.

Both WestJet and Air Canada require a medical certificate for obese passengers to qualify for the extra seat at no charge. In order to remove error or confusion, Air Canada?s assessment form instructs the qualifying physician to seat the patient on a ?paper covered examination table? and carefully measure and record the size of their posterior. In many other countries, the free seat is not an option.

Several international carriers, including Southwest Airlines, encourage obese passengers to purchase an extra seat under their so-called ?customer of size policy,? which will see the last person to check in to a full flight bumped if it is deemed that the person is too large to fit into a single seat. But not necessarily the obese one.

Last year, the U.K. Court of Appeal also opened the door to so-called ?fat taxes? on passengers when it ruled that the Montreal Convention, a framework of international rules and regulations on air travel, takes precedence over parts of Britain?s discrimination and disability laws once the aircraft leaves the runway, eliminating a passenger?s ability to seek redress for being charged for a second seat.

Linda McKay-Panos, a lawyer and executive director of the Alberta Civil Liberties Research Centre, was the complainant in one of the cases that led to the Supreme Court?s one-passenger-one-fare policy after she was forced to fly in an economy seat on an Air Canada flight in 1997 that couldn?t accommodate her.

Her 11-year fight with the airline to change its policy to accommodate obese people contributed to the changes it has since adopted to not charge for a second seat.

She said the pay-as-you-weigh policy might make a good economic argument, but doesn?t think it would fly here in Canada.

?I think that?s ridiculous,? she said. ?That?s a slippery slope of blaming people. When you?re in the business of serving the public, you take them as they come.?

While the statement may prove contentious, Mr. Bhatta argues the current system is already discriminatory in that passengers who weigh less or are carrying less luggage are already subsidizing the flights of those who are carrying more weight and raise the overall average weight of passengers and therefore fares.

Mr. Bhatta argues airlines have dynamic pricing models that charge different prices to different passengers based on when they book their flights, whether they?re flying direct or with a layover, among other variables to maximize the price of fares and minimize the amount of empty seats on their flights.

?We emphasize that the fare policy that charges heavier passengers more but does not give any discount to lighter passengers can benefit only the airlines but harm the passengers and the society at large,? he said.

But he said carriers are failing to maximize their profitability by not charging more to passengers who are above the average weight and cost them more to fly, he said.

?Charging according to weight is a standard principle in transporting goods by any transport modes such as rail, road, human or pack animals, air and water,? he said.

The more weight in a plane, the more fuel it costs to fly; as a result it is justifiable to say that a passenger should contribute to the cost of flying the plane

?The more weight in a plane, the more fuel it costs to fly; as a result it is justifiable to say that a passenger should contribute to the cost of flying the plane?? he added.

But Mr. Bhatta acknowledged it may be a difficult system to enforce without impacting check-in times and causing major disruptions for the travelling public.

He floated several models from charging based strictly on the weight of the passenger plus their luggage, or the passenger themselves with a weight limit on their bags.

Or, he said, airlines could determine an average weight for a passenger and their bags, and grant them a 25% window on other side before the fees or discounts kick in.

He argued the measures could be enforced either through self-declaration at the time of purchase, with random checks to enforce the issue, or charging a fixed fare with an extra fee tacked on or refunded to a credit card after a weigh-in.

But he also argued it could cut down on security lines, because it could replace the need to charge for a first and second checked bag and reduce carry-on luggage.

?Although every passenger will not benefit from the model, one does not pay for others? excess weight as in an average fare policy. Charging according to weight and space is a universally accepted principle not only in transportation but also in other services,? he said.

What do you think? Should airlines start charging passengers by the pound? Take our poll.

Source: http://business.financialpost.com/2013/03/29/should-airlines-start-charging-passengers-by-the-pound/

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