US Airways to end fees for non-alcoholic drinks

ByABC News
February 23, 2009, 7:24 AM

— -- US Airways, bowing to customer grumbling and a lack of response from competitors, plans to stop charging for soda, juice, water and coffee beginning March 1.

The Arizona-based airline is the only major U.S. airline to charge for non-alcoholic beverages and until now has been largely unapologetic for the $1-$2 fees and other new charges instituted last summer when fuel prices were escalating.

The airline announced the return to free drinks to employees Sunday afternoon and plans a public announcement Monday morning. It is the airline's second major retreat in three months, the last a return of mileage perks for frequent fliers.

Andrew Nocella, the airline's senior vice president of marketing and planning, said the airline ultimately decided to reverse its decision because the negative passenger reaction wasn't worth the limited amount of extra revenue the fees brought in.

Some travelers were upset they had to pay for drinks because they hadn't heard about the new charges, while others wondered why US Airways was charging when competitors such as Southwest and others don't, Nocella said.

"It's such a minor issue in the grand scheme of things but was having a large impact on the perception of our brand," he said. "We just came to the conclusion that it was distracting our passengers from all the other things we were accomplishing, in particular our great on-time performance."

The airline would not disclose the amount of revenue it took in from the beverage charges. Altogether, passenger fees brought in $100 million in revenue in the fourth quarter and are expected to bring in $400 million to $500 million this year. Eliminating the drink fees does not change that estimate, Nocella said.

As recently as last fall, US Airways CEO Doug Parker said in an interview that the airline had no plans to eliminate any of the fees despite the plunge in fuel prices.

"You never say never because competitive forces could eventually force us to turn back," he said, "but we certainly hope that's not the case and don't believe it will be."