Anyone looking for widespread relief from extra airline fees for such items as checked bags or choice seats had better not expect it to happen anytime soon.
Those little extra charges will be the key to the future profitability of the airline industry, and they're here to stay, according to executives of US Airways.
Speaking to media reporters at the airline's Tempe headquarters Tuesday, President Scott Kirby said carriers are likely to keep the extra service charges even as the slow economy reduces demand for air travel. That's because the major airlines that do impose those added fees aren't losing customers to the smaller ones that don't, he said.
"We have not seen that movement," he said. "Customers care more about other things like schedule and on-time performance."
He said the ancillary charges, which he called a la carte pricing, could bring an additional $400 million to $500 million in revenue to the local airline this year.
US Airways charges extra if passengers want checked luggage, meals, choice aisle and window seats and pillow and blanket kits. Many of those fees were started last year to help the company cope with soaring fuel costs.
US Airways was forced last month by competitive pressures to give up charging for in-flight sodas, but Kirby said that was an exception. US Airways was the last of the major carriers to charge for beverages and had to conform with the majority, he said.
But so far most of the major carriers continue to charge extra for checked bags and other services, and they probably would not be able to gain enough market share by dropping those charges to offset the loss of revenue, he said.
Chief Executive Doug Parker said the company's checked-bag fees - $15 for the first bag and $25 for the second - are even helping the airline improve its operating performance. Passengers are responding by reducing checked baggage by about 20 percent, and the lighter workload has helped the carrier reduce its rate of mishandled bags, he said.
Bolstered by such revenue enhancements, Parker believes that the airline industry will be one of the few sectors to perform better financially in 2009 than last year.
"The oil run-up forced us to make aggressive changes before the real recession hit," he said. "With oil prices falling, we have a real chance to be profitable in 2009."
Still, he said the airline industry needs to do more to reach profitability levels of other businesses. He said that will require more airline mergers, better engagement with labor unions and restraint by government regulators.