US Airways reverses beverage charges!!!

Hell hath not frozen over folks. US Airways is indeed resuming a free beverage service on its domestic flights. I wonder how many negative news articles, passenger complaints and cries of thirst management had to hear about before deciding to cease charging passengers for the bare necessities of life, like water.

But whatever the catalyst, US Air A321 cool.jpg

US Airways CEO Doug Parker today said the carrier no longer wants to be the only large network carrier to charge for drinks.

Here’s the text of his full letter to employees:

Tomorrow morning we will make an announcement returning complimentary sodas, juices, tea, water and coffee to US Airways. The free beverage service will resume on March 1. This change reverses part of the a la carte business model we believe is right for our business and I’d like to explain why we made this decision.

When we launched the beverage purchase program in 2008 we knew it would generate additional revenue.  From this perspective the program was very successful. What we didn’t know at the time, but later experienced, was that the cabin atmosphere would also improve with fewer carts in the aisles and shorter lines to the lavatories.

“Today, while we remain firmly committed to the a la carte strategy – we also know it is a work in progress. We know customers don’t buy an airline ticket based on whether or not they will get a free soda onboard, but with US Airways being the only large network carrier to charge for drinks, we are at a disadvantage. More importantly, this difference in our service has become a focal point that detracts from all of the outstanding improvements in on-time performance and baggage handling that all of us have worked so hard to achieve over the past year.

“We are not making this decision because the airline industry is now healthy. To the contrary, while oil prices have dropped, a global recession is having a material negative impact on industry revenues and our industry still needs business model changes as much as ever. Moving to an a la carte model has helped us build an airline that can withstand the uncontrollable factors that influence our industry and we need to keep trying new programs, like a la carte pricing. Frankly, it would have been a bigger risk for us not to have tried charging for drinks because innovation and a new business model are desperately needed.

“In fact, we still expect to generate $400 to $500 million in 2009 from a la carte items like checked baggage fees, Choice Seats, and our new blanket and pillow offering – the US Airways Power-Nap Sack .

“Aggressively managing our business by anticipating what our world may look like in the future is the cornerstone of our culture. In other words, we are always thinking differently about how we operate and are not afraid to take a chance on new ideas designed to provide career certainty and stability, great customer service and positive returns for our shareholders. It is also part of the reason we received a vote of confidence from our investors and business partners last fall when we raised close to $1 billion to help keep the airline strong.

“We will be issuing a press release announcing this news early tomorrow morning, as well as posting it on Wings and theHub. Thank you for continuing to take care of our customers.” 


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3 Responses to US Airways reverses beverage charges!!!

  1. g February 22, 2009 at 8:33 pm #

    They probably came to their senses after Cactus 1549 went into the drink…

  2. E.C. February 23, 2009 at 12:53 pm #

    I speak unofficially, and my comments are my own…

    I’m not sure if 1549 had anything to do with it…I can say that there has been a little bit of stepped-up company loyalty among employees…and even brand loyalty among customers, both old and new.

    I work the Dividend Mile-Preferred/International desk in Winston-Salem, NC (GSO) for US. A good number of the new reservations I make are customers who say they want to fly US specifically because of pilots like Capt. Sully. You can’t buy this kind of marketing and advertising. Not even close.

    I had a unique opportunity to both meet and speak one-on-one with Kerry Hester, VP of reservations, the other week…she says the company is constantly reviewing fees and policies…she says CEO Doug Parker has every intention of making this airline the one of choice, not the one that’s “hard to do business with.”

    We received a few complaints over time about the beverage charges here in Reservations, but not as many as the complaints about the other fees, including change fees and baggage fees. We also get a fair amount of grumbling about a lack of available award seats for Dividend Mile customers. And while I’m apologetic and empathetic, I’m saddened when we don’t have ample award seats for our DM customers…especially our Preferreds (Chairmans, Gold, Platinum and Silver)…they spend a good deal of money with US. And this was one thing I mentioned to Kerry; she said Revenue Mgmt. is keenly aware and is looking at some unique things to try in the near future.

    But I think this was a good move and a smart strategy. And I think our customers will be very accepting of this.

  3. Mary Kirby February 25, 2009 at 11:09 am #

    I wonder how US Airways’ new credit card promo is going. The carrier was flogging its mastercard – plus miles – on my flight down to St Croix and back. And what do the flight attendants think about having to do the promo?

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