Pay-as-you-weigh pricing of an air ticket: Economics and major issues for discussions and investigations

Abstract

Pricing a good or service correctly in a market is possibly a powerful tool to achieve greater efficiency, fairness and environmental sustainability. This is also true in pricing an air ticket. This article discusses the pay-as-you-weigh model, which postulates passenger's weight as a major determinant (at least in part) of a fare. The article investigates an economic justification of the model, evaluates various arguments for and against the model, points out some potential options for implementation, and briefly discusses possible implications. The model rewards passengers who weigh less than average and/or when they reduce weight, providing financial savings and improved health benefits. The exploratory analysis in this article indicates that the model can be technically and economically feasible to implement and its proper implementation may provide significant benefits to airlines, passengers and society at large, not just economic transfers. However 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. As the nature of this pricing model is potentially contentious, the article identifies some important issues and areas that deserve further discussions and investigations. © 2013 Macmillan Publishers Ltd.