September 23, 2008 11:12 AM
- Text
US Airways is Happy That Nobody is Buying Drinks
(MoneyWatch) It seems somewhat counter intuitive to hear that US Airways added a revenue generating fee and now they're happy that nobody is taking advantage of it, right? But that's exactly what's happening with the new charge for drinks onboard. When you think about this further, it's actually pretty easy to see why they're not complaining at all.
On the surface, it would seem that the airlines keep adding fees so that they can improve their ancillary revenue, but there's another benefit in the form of cost reductions. Let's stick with the beverage fee that US Airways implemented to illustrate my point.
Traditionally, the flight attendants roll the cart by every seat asking what each person wants to drink. Unless the passengers are sleeping, there's a good chance that most will order something. Now with this new charge, people have to really want a drink to be willing to pay for it. US Airways is finding that few people are actually willing to pay for it, so that should be bad, right? Nope.
Less demand for drinks means they need to stock fewer items. This costs less and it reduces weight onboard. As Scott Kirby, US Airways President, says, "Logjams in the aisles, significant trash collection, lines at the restrooms -- all those things are largely gone on US Airways because fewer people are buying and drinking sodas."
Now, Kirby probably is overstating his case when he says the flight attendants love selling this stuff, but it doesn't seem like it should be that much of a burden. And at least one passenger, PlaneBuzz's Holly Hegeman, likes it enough to sing the praises of the policy. Since US Airways has made it clear that they are pursuing a bare bones, no-frills strategy, this seems like a very smart move.
On the surface, it would seem that the airlines keep adding fees so that they can improve their ancillary revenue, but there's another benefit in the form of cost reductions. Let's stick with the beverage fee that US Airways implemented to illustrate my point.
Traditionally, the flight attendants roll the cart by every seat asking what each person wants to drink. Unless the passengers are sleeping, there's a good chance that most will order something. Now with this new charge, people have to really want a drink to be willing to pay for it. US Airways is finding that few people are actually willing to pay for it, so that should be bad, right? Nope.
Less demand for drinks means they need to stock fewer items. This costs less and it reduces weight onboard. As Scott Kirby, US Airways President, says, "Logjams in the aisles, significant trash collection, lines at the restrooms -- all those things are largely gone on US Airways because fewer people are buying and drinking sodas."
Now, Kirby probably is overstating his case when he says the flight attendants love selling this stuff, but it doesn't seem like it should be that much of a burden. And at least one passenger, PlaneBuzz's Holly Hegeman, likes it enough to sing the praises of the policy. Since US Airways has made it clear that they are pursuing a bare bones, no-frills strategy, this seems like a very smart move.
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