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VIDEOUS Air Says Drinks Are on Us
By
Scott Reeves Feb 23, 2009 10:05 am
Brief scrutiny of today's headlines.
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As fuel prices soared last year, US Airways and many of its competitors started charging for services that were once included in the ticket price in an effort to boost revenue. But US Airways was alone in charging for non-alcoholic drinks, putting it at a disadvantage with competitors - especially as fuel prices have plummeted about 70% from last summer's peak.
The airline will continue to charge passengers $7 for beer, wine and cocktails and has no plans to drop fees for other items such as checked baggage, choice seats, blankets or pillows. The airline says it expects to generate as much as $500 million from these services in 2009.
Business and leisure travelers have cut back in the recession, forcing airlines to rethink their new fees. United (UAUA) has cut its checked-bag fee and abandoned plans to increase the fee on second bags. But AirTran (AAI) recently started charging a fee to check a first bag, suggesting cost-conscious travelers should shop around for the best deal.
Airlines have responded to the economic downturn by reducing flights and retiring old planes. Some carriers are experimenting with ads on boarding passes in an effort to generate new revenue.
Domestic airlines have been hammered, and Southwest (LUV) is the only major carrier to report a profit. Airlines reporting losses for 2008 include Alaska (ALK), Continental (CAL), JetBlue (JBLU), American (AMR), Delta (DAL), US Airways and United.
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