US Airways not likely to cancel added fees
PHOENIX -- When oil prices were hurtling toward $150 a barrel earlier this year, US Airways and other major airlines looked everywhere but the seat-back pockets for extra money.
They started charging passengers fees to check bags, reserve prime seats, even, in US Airways' case, to order a can of soda.
With oil prices now at half the level they were this summer, the big question is whether airlines will retreat from the fee parade.
The short answer from US Airways CEO Doug Parker: No way.
In fact, the Tempe-based airline recently started selling a larger percentage (25%) of its coach seat assignments and plans to replace the standard-issue pillow and blankets with a reusable $7 inflatable pillow-and-blanket set later this year or early next year.
Parker called the airline, the most aggressive U.S. carrier on the fee front, "big fans" of so-called a la carte pricing.
"You never say never because competitive forces could eventually force us to turn back, but we certainly hope that's not the case and don't believe it will be," he said.
"We're really excited about how this is playing out for the airline. It's a better model for an industry that's been struggling for a long time to find a model that works."
US Airways has said it expects the fees to generate an extra $400 million to $500 million in annual revenue, higher than initial estimates. It likely will give more details when it releases its third-quarter financial results on Thursday.
The annual windfall for the industry is estimated to be about $3 billion, according to JPMorgan Chase. And it comes without the participation of Southwest Airlines, the country's largest carrier by passengers, which is sitting out the fee frenzy and touting its stance in an advertising campaign.
Parker said airlines have simply been including too many things in the price of a ticket for too long. He said research shows passengers' biggest priorities are low fares and getting where they're going on time and with their bags, with as little hassle as possible.
