New Airline Policy: The Cashless Cabin


Any frequent flyer knows the drill.

Order a $5 in-flight movie or cocktail, give the stewardess a $20 bill, and wait a half-an-hour for the change to come back.

But it’s a scene being played out less and less on commercial flights these days, as more airlines adopt a “cashless cabin” approach to in-flight payments. The latest to join the club is American Airlines (Stock Quote: AMR), who this week stopped accepting cash payments for onboard purchases during flights within the U.S. and Canada. Instead, the airlines will have flight attendants using hand-held sales recorders to process debit and credit card payments for that can of Budweiser or the chance to rewatch “Quantum of Solace.”

The “plastic only” directive will not affect customers flying American Eagle or AmericanConnection flights – although customers who want to use a credit card will be able to do so (American began deploying the hand-held charge units on all of its planes in 2006). The units are about the twice the size of a Blackberry and feature a touch-screen face, a credit and debit card reader, and a printer to handle receipts.

American Airlines is hardly alone. Southwest (Stock Quote: LUV), United Airlines (Stock Quote: UAUA), AirTran (Stock Quote: AAI) and JetBlue (Stock Quote: JBLU) have already abandoned cash payments. In fact, airlines look at the “plastic only” program as a potential profit center. Back in 2007, during the first week of its cashless cabin venture, JetBlue reported that its daily onboard revenues nearly doubled. And United Airlines is on record saying that customers spend more when using a charge card than with cash.

And while airlines do have to pay credit charge fees, they say that such fees won’t impact the price of food, beverages or headphones.

For its part, American Airlines is touting the cashless initiative as a customer convenience, claiming in a May 27 statement that there will be:

- No more waiting for the flight attendant to return your change.
- No more hunting for small bills.
- No more waiting for your beverage or snack while the person in front of you fumbles for change.

Surely, many airlines customers will be spared a trip to the ATM before boarding a flight. But it’s also a move designed to free flight attendants from the task of trolling the aisles asking for change for a $20 bill.

“We believe that, by moving to a cashless cabin, the transaction process is more convenient for both our customers and flight attendants,” said Lauri Curtis, American’s Vice President of Onboard Services.

For a complete breakdown of American’s cashless cabin policy, visit the American Airlines website.

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