Recent service fee and domestic fare increases by Continental Airlines suggest the world's fifth largest airline believes that pricing power has shifted from the consumer back to air carriers. This growing confidence was all the more on display when the company -- damn the bad PR -- refused to fly (in cargo) a 4-month old pit bull puppy, which had been rescued from an animal shelter, to its happy new home.
Dawn Capp of The Chako Rescue Association for the American Pit Bull Terrier rescued "Joey" from an animal shelter when the pup was only six weeks and had been fostering him ever since. In an interview with News 10 - KXTV out of Sacramento, Capp said she had found a good home for Joey in Tennessee and arranged to have the puppy fly on Continental, but was informed that the airline would not accept Joey -- even in their cargo hold -- due to Continental's travel and weight restrictions against most kinds of pit bulls:
Continental Airlines will accept American Pit Bull Terrier puppies, which are between 8 weeks and 6 months of age provided they do not weigh more than 20 lb (9 kg). All American Pit Bull Terriers more than 6 months old or weighing more than 20 lb (9 kg) will be refused. Crossbreeds with American Pit Bull Terriers are also excluded from this embargo. This embargo is due to the danger presented to our aircraft and our customers.Unfortunately, Joey weighed in at 26 pounds.
"They will fly a 90-pound German Shepherd. They'll fly a Rottweiler. They'll fly just about every breed of dog but not a 4-month old pit bull puppy. I can't imagine what a pit bull puppy would do that a 90-pound German Shepherd wouldn't do," said Capp.
In its third quarter, Continental said domestic carrier revenue fell 20.5 percent to $1.18 billion, due to reduced traffic and a 19.1 percent decline in passenger revenue of $9.46 per available mile seat (RAMS). Management attributed the dramatic decline in RAMS to discounted (lower) fares and business travelers either curtailing travel plans or purchasing lower yield economy tickets, according to the 10-Q regulatory filing with the SEC.
In response to the continued decline in revenue, the company implemented new revenue-generating initiatives, including a $10 round-trip domestic fare increase and $5 fee increases on domestic checked baggage (for customers who do not prepay those fees online) and telephone reservation booking services. Chief operating officer Jeff Smisek euphemistically opined on the third-quarter earnings call that unbundling products and services is "more fair to the consumer" because it offers customers more control over the product and services they buy from Continental (huh?). Continental aims to raise $100 million a year with higher fees.
Continental also reported a 28.7 percent drop in cargo revenue in the quarter. Just a thought -- contrary to alienating dog-lovers nationwide, might it have made more financial sense just to charge Joey a "surcharge" (like some carriers do for obese fliers) -- as opposed to bumping the poor puppy from the flight. To me, that would have been a PR and revenue win-win solution.
Image and video courtesy of News 10 - KXTV / Sacramento