Air Gini

By Eric Crampton 04/12/2014

In today’s glass-half-empty news, inequality in airline space has increased.

While it used to be the case that the top 7% of passengers got about 15% of the room, transatlantic configurations give proportionately more space to first-class passengers: the top 21% get about 40% of the plane. So the Gini index increases from 8(ish) to 25. Epopp at OrgTheory provides the illustrations. The top one shows an earlier equal plane; the bottom one shows a modern configuration.

plane 1plane 3

Isn’t it terrible, eh? All those fat cats in first class taking up space that could be used by the proletariat in economy. Horrible stuff.

Except for that, in the earlier period, a whole pile of those economy passengers might have been taking the bus instead. The cost-saving innovations that allowed cheap economy-flight transport increased in-flight inequality and allowed more poor people to fly. The correct diagram would have a couple of Greyhound buses running alongside the spacious early airplane for domestic travel, and no other real options for international. But it’s easy to forget that and to focus on the horrible horrible oppression experienced by those flying economy class who, in an earlier time, couldn’t have afforded any air travel.

I haven’t ready access to the American price series, but here’s the New Zealand real cost series from 1981 through 2010. Domestic travel has gotten a little bit cheaper, in real terms, but has otherwise just tracked inflation; international travel has halved in cost.

Graph, Domestic and international air transport real series

The divergence of international and domestic prices is interesting. I wonder what portion is due to greater cost-saving innovation in long-haul than in short-haul transport, what portion is due to relatively greater international fare competition, and what portion is due to greater elasticity of passenger destination choices among internationally competing airports than in domestic service. If you’re flying domestically to Auckland or Christchurch, you likely need to get to that place. If you’re flying in from overseas and don’t much care whether you start in Auckland or Christchurch, airport landing fees start getting more competitive.