Weight and baggage arbitrage for airline passengers

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There has been some controversy  in the last couple of days about the potential for airlines to  price discriminate on the basis of passenger weight. Weight is a major factor in airline costs and some airlines already  set different prices depending on whether or not a passenger has check-in luggage. So what about a surcharge for heavier passengers? The issue is discussed here. However it is not clear that the benefits to the airlines would outweigh the costs, as noted in the interview.

So what about an alternative approach to weight redistribution, that benefits passengers (albeit not the airlines)?

Currently  most airlines set weight limits for passenger baggage. Some passengers  have bags well under the limit (but receive no discount) while others exceed the limit and are forced to pay for excess baggage. So there is a possibility for arbitrage. Low baggage weight passengers can do a deal with those who face excess baggage charges.

Some arbitrage between low and high baggage weight passengers occurs at present, for example when travelling in groups where baggage allowances are pooled. But is there an opportunity for more sophisticated baggage arbitrage?

Perhaps an entrepreneur could set up the following. For a small fee, those passengers with excess baggage could be paired with passengers who have underweight bags. The pair would check in together, getting the benefit of a combined total baggage allowance. The ‘over weight’ passenger would save money (the fee for the service would be less than the excess baggage charge). The ‘under weight’ passenger is better off as they receive a small payment. Coordination could be via a smartphone App.

Of course, the airlines would lose out of such pooling. And a quick check of airline rules shows that it would breach some airline’s rules.

For example on Ryanair:

Pooling or sharing individual baggage allowances is not allowed.

And Aer Lingus (under ‘checked baggage – baggage allowance’):

No pooling or sharing of baggage allowances is permitted, even within a party travelling on the same booking.

Of course, this just may be the Irish. For Air Malta:

Yes, we allow the pooling of baggage, provided that passengers :

  • have presented themselves together at check-in
  • are travelling on the same flight
  • are travelling to the same final destination

So baggage arbitrage may be alive and well – at least if you travel to Malta …

 

5 Responses to "Weight and baggage arbitrage for airline passengers"
  1. Could bodyweight be arbitrgaed as well so I can get cheaper flights at the expense of the obese? I think Greg Mankiw has previously proposed equity via a tax on the tall?

  2. It shouldn’t be too hard, as long as the on-the-spot payment method can be made smooth.
    For example, set a standard weight (passenger plus baggage), perhaps 100kg, that ticket prices are quoted at. But you pay less or more if you anticipate having being heavier or lighter.
    Passengers are weighed with the baggage and given a cashback per kg under (or they have to pay if they’re over, as normal).
    What’s the marginal cost per kg for air travel? Is there a difference between a 20kg heavier passenger and an extra 20kg case? Would a price scheme like this remove the need for separate children’s prices?
     

  3. By the way the concept of including body weight has also been applied in the past on regional flights in Australia not just Indonesia as indicated here! I recall a flight between Blackwater and Rockhampton on a Bush Pilots trilander where some mining executives, including my father, were boarding. The typically hefty mining company accountant got on the scales and then watched the check-in clerk write down the weight. “That can’t be right” he said, “it should be more than that” “mate” the check in clerk replied ” do you want to get on this plane or not”  

  4. I agree with much of what’s been discussed above; the only point I would add is that the marginal cost per kg of travel need not be the same for luggage as for passengers.
    For example, the cost of a 20kg heavier person would be offset somewhat by the food they purchase (assuming a flight where food is not included in the ticket’s cost), whereas a 20kg heavier luggage piece may not have an offsetting revenue stream.
    Perhaps the main lesson from all this is that airlines don’t practice enough price discrimination and customer segmentation.

  5. Alan Kohler has posted an interesting chart tonight on airline fuel efficiency. I wonder how much of the efficiency improvement relates to technical factors like the plane and engine, and how much to management factors like more seats and management of flight loads including weighting? http://www.alankohler.com.au/

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