Living Economics

If you are a funeral director and ships or receives dead bodies frequently by plane, you can fly for free courtesy of the airlines.

This is the so-called "frequent-dier program" where the deceased families pay for the shipments but the funeral directors who book the flights receive the perks from the airlines.

Such widespread loyalty programs indicate the competitive nature of the corpse shipment business. Unlike leisure passengers whose demand for airline seats is quite elastic, dead bodies must be shipped with tight deadlines. Such inelastic demand means that full price can be charged for shipping dead bodies instead of general cargo. The director of mail and cargo for JetBlue said that one corpse could generate as much revenue of 1,000 pounds of general cargo.

Not surprisingly, the most competitive environment is in Florida where many retirees from other states must be flown back to their home states at death for burial. As the population ages and becomes more spread out from the place of origin, shipping bodies is a growing business for airlines. Already, body shipment represented 18% of JetBlue's cargo revenue in 2005.

Because funeral directors are not paying for the shipping charges, they might be more concerned about which airlines offer the most attractive perks rather the cheapest flights. Such principal-agent conflict simply adds to the long-standing complaint of consumer advocates that bereaved families are vulnerable victims of excessive funeral charges. The principal is of course the family members of the deceased and the agent is the funeral director who is trusted to take care of the funeral arrangements. The traumatized state of the families and the lack of repeated shopping experience often put them at a bargaining disadvantage vs the seasoned funeral directors.

But families always have the ultimate leverage of resorting to cremation and shipping the ashes back home via the local Post Office.