Airlines Ponder Charging Passengers by Weight - Opportunity for Health Plans?

Nothing makes us challenge our assumptions like cold hard economics.  Need Proof?  The airline industry is said to be pondering charging passengers by weight.  It seems crazy until you remember that extra bags cost more for the same reasons, and the airlines are losing hundreds of millions of dollars per day due to the cost of fuel. 

Wow.  From Bloomberg News:

"Imagine two scales at the airline ticket counter, one for your bags and one for you. The price of a ticket depends upon the weight of both.

That may not be so far-fetched.

``You listen to the airline CEOs, and nothing is beyond their imagination,'' said David Castelveter, a spokesman for the Air Transport Association, a Washington, D.C.-based trade group. ``They have already begun to think exotically. Nothing is not under the microscope.'' He declined to discuss what any individual airline might be contemplating, including charging passengers based on weight."

After U.S. airlines reported combined first-quarter losses of $1.7 billion and crude oil jumped to a record $133.17 a barrel on May 21, almost double from a year earlier, fares based on a passenger's weight may be a logical step, said Robert Mann, head of R.W. Mann & Co., an aviation consultant based in Port Washington, New York.

``If you look at the air-freight business, that's the way they've always done it,'' he said. ``We're getting treated like air freight when we travel by airlines, anyway.''

When you're losing millions on a daily basis, I guess there are no topics that are off limits.  Somehow I can't see the women I know stepping onto the scale and suffering the indignity of pulling out their credit card to pay the overage (disclaimer I just thought of in editing this - not that any of them would have to do that).  That would be ugly.  Guys on the other hand, would make a show out of rubbing their belly.  Venus vs. Mars at your local municipal airport.

Treating people differently based their individual stats is difficult, but worth examining.  If you are an employee who exercises, eats right and has positively impacted your health through your lifestyle, would you like to pay 30% less in medical insurance premiums when compared to someone who does nothing?

Sure you would.  The problem is the blowback that happens when the equivalent of the stick is presented to those who could positively impact blood pressure, cholesterol, blood sugar, etc. through healthy lifestyles. 

And, that's why you probably won't see that coming to your company-sponsored health plan any time soon.

Comments

[HR Minion]

I can't imagine that kind of embarrassment causing people to want to fly more. Though the airline reality shows on cable would LOVE it. People will do what they want to do, and wielding a big stick doesn't change that. I think that encouragement, opportunities, and communication are the only ways that wellness programs can be effective. You either accept that people have to want and commit to change, or you need a much bigger stick than higher prices.

[Jessica Lee]

it's not a horrible idea. i get all worked up on this one... employers talk of possibly not hiring smokers because of the costs to insure them - but what about those overweight or obese? but if airlines are going to charge more... i think clothing manufacturers need to consider charing more for larger sizes too. think about it - how much more cloth is needed to make a size 20 dress versus a size 2 dress? hmmmm. let's think about that one.

seeing this is america though, and the larger out-weigh, i mean out-number me, this will probably get no where. says the CDC, the percent of non-institutionalized adults age 20 years and over who are overweight or obese: 66.3%.

amazing.

[chris]

Kris,
I am guessing you're referring to the stick when you say "you probably won't see that coming to your company-sponsored health plan any time soon."

Companies *are* implementing "carrot" initiatives for health and wellness. These are certainly easier to carry out - rewarding for good behavior as opposed to penalizing bad behavior. But I am aware of at least one company who has implemented a health "stick". Granted, it's not obvious, and not advertized as a penalty, but this company overcharges for unhealthy items in its various vending machines. This "tax" is a penalty for making an unhealthy choice in snack consumption at work. They made other changes as well (including adding more healthy choices to vending machines and promoting "carrot" wellness policies), so it's not clear whether the tax caused the reduction in unhealthy choices consumed, but a reduction did occur.

So it is possible to implement penalties for bad choices within a health/wellness program. And it has been done. But I agree with the general premise that it is much more easy to implement rewards for good behavior. Moreover, if you design the program correctly, the use of carrots can be economically equivalent to the use of sticks. (e.g. charge everyone $150 & give $50 rebate to non-smokers; or charge everyone $100 and give $50 tax to smokers).

[laurie ruettimann]

Kris, the solutions are so EASY.

Pull employers out of the business of insuring employees and the carrot/stick approach is unnecessary. Then pay your employees based on performance, make your CEO accountable, and ensure that your board of directors is staffed with responsible individuals who have the best interest of the company at heart.

Like I said, so easy. So simple. :)

[Kris Dunn]

JLee - 66%... Daaaaaaang....

chris - You're right - defining incentives as carrot or stick is positioning.... Easy to position the stick as a carrot rather than a stick....

K

[Chad A. Hanson]

Personally, I think this is a great idea, and I say this as someone who has lost a lot of weight but would not be described as "skinny"

But as an HR professional think of the discrimination claims this will bring up. Just to name a few.

Just to name two, weight can be culturally specific or due to a disability (diabetes) which will generate lawsuits.

I think it’s a likely bet that this charge will lose more cash to legal fees then it will generate.

[William H Wantuck]

Weight vs Aireline ticket cost.. Why can't someone develop a simple formula for weight? The cost of a ticket is not linear with weight. Other factors (labor, food, amortization, airport charges etc.) do not go up with weight. This approach is often referred to as a Quantitative Analysis approach. Willam Wantuck, Houston