In Air Travel, Everyone Subsidizes Everyone

A NYT Times letter writer is upset that business and first class airplane tickets can be claimed as a business expense, meaning that all the people trapped in coach are subsidizing the fats cats sipping champagne in the front of the plane. I fly over 100,000 miles a year every year, only buy coach tickets and have a bad hip that becomes swollen and painful when I am kinked up in a small seat. I therefore have a fair claim at being outraged at this apparent inequity.

But I’m not.

Yes, even though making something a business expense does not make it free, there is some indirect monetary transfer from coach cabin passengers to business and first class passengers through the tax system. But there is also a substantial transfer in the other direction. The people at the front account for 40-50 percent of airline revenue. If they all flew coach, the airlines could only be financially viable by raising coach ticket prices for everyone. This is thus a case where wealth really does trickle down to the rest of us. And before those of us who buy coach tickets get too indignant, we should remember that we ourselves are subsidized by taxpayers who never fly at all but have contributed indirectly for decades to federal government bailouts and loan guarantees for the airlines.

More generally, the too-clever-by-half “airplane as economic microcosm” angle is getting overworked in the media, maybe because many journalists are frequent fliers. At a surface level, the three different classes of service in airplanes seem the perfect metaphor for the current inequality in American life. But no matter where we sit on the plane, we all arrive at our destination at the same time, experience any turbulence in equal measure, and care equally whether the whole thing crashes and burns. Airplanes are therefore much more like the way the country used to be than they way it is now. In the skies, we are still all in it together.

[Cross-posted at The Reality-Based Community]

Keith Humphreys

Keith Humphreys is a professor of psychiatry at Stanford University. He served as a senior policy advisor at the White House Office of National Drug Control Policy from 2009 to 2010.