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Author: salaryguru Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 59871  
Subject: Re: Time to get serious about losing weight Date: 4/3/2013 1:38 AM
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News of the pay-as-you-weigh plan comes one week after a professor in Norway argued that charging by weight would save fuel and cut back on carbon emissions.

This topic comes periodically. Selling tickets by weight might work for Samoa Airlines or for airlines with small planes (10 or 12 passengers), but it would be hard to make it work for a large plane with hundreds of passengers.

Passengers who purchased tickets in advance would have to weigh themselves and their luggage when they bought the ticket, then add or subtract from what they paid at weigh-in when they actually showed up to fly. I can't imagine what the airline employees who oversaw weigh-in would hear from passengers.

Plus, in larger planes you would need a more sophisticated algorithm. A large jet filled with fuel weighs quite a bit without anyone on it. The cost of flying the plane empty should be distributed among passengers based on the number of seats allocated, not weight of passengers. So then what is the incremental amount of fuel required to add one additional passenger? It's not much. So the formula needs to consider the fixed overhead of flying the empty plane (a fixed cost), plus the incremental fuel cost (an additional charge by weight. If the airline don't get the formula right when they implement this, they will tend to hurt themselves. This kind of pricing will tend to encourage small, skinny people and discourage people over average size to travel on the airline that uses the formula. But those people will be paying less than the current average fair. With only small skinny people, the airline will be collecting less money than they would if everyone paid average price. So the ticket price by weight system better actually result in saving that amount of money on fuel, or they will be hurting their profit margin.

If an airline decides to start charging based on actual space and weight, then the relative cost difference between 1st class and economy is going to change dramatically. The resultant calculation is likely to reduce the 1st class costs and raise the economy class costs by quite a lot. So average sized passengers will have to pay more for economy class. That is going to further discourage everyone but the smallest of passengers.

But, here's another important point. Airline tickets today are not priced based on any kind of logical analysis of the cost of flying. Like most things in a capitalist economy, ticket prices are set as high as the market will bear. Next time you get on a plane, ask all the passengers around you what they paid for their ticket. Depending on when they purchased, who they purchased from, and a number of other factors, ticket prices for essentially identical seats might vary by a factor or 2 or 3. Rational weight-based ticketing would still need to consider how much the airline could get for first class vs economy seats and have different weight scales for the two cabins. This kind of ticketing would also need include the value to the airline of selling tickets in advance.
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