US Airways Stops Charging for Soda


CHARLOTTE, N.C. -- US Airways (Stock Quote: LCC) says it will abandon its policy of charging passengers for drinks, seven months after adopting it and despite repeated assertions that the strategy was working.

Distribution of free soda, juice, tea, water and coffee to coach passengers will resume March 1, CEO Doug Parker said Sunday night in a letter to employees.

"We know customers don't buy an airline ticket based on whether or not they will get a free soda onboard, but with US Airways being the only large network carrier to charge for drinks, we are at a disadvantage," Parker wrote. "This difference in our service has been a focal point that detracts from all of the outstanding improvements in on-time performance and baggage handling that all of us have worked so hard to achieve over the past year."

US Airways began testing its "buy on board" policy for drinks -- $2 for soda and bottled water and $1 for coffee or tea -- on Aug. 1. While nearly every carrier now charges for some amenities, particularly checked baggage, not a single major carrier matched US Airways' drink charge.

While US Airways hasn't broken out revenue from drink charges, Parker said "the program was very successful" in generating revenue. However, he said the carrier still expects to generate $400 million to $500 million in new fee revenue this year, the same amount it has regularly cited as likely fee revenue before rescinding the drink charge.

The announcement Sunday comes as a surprise, because US Airways executives have frequently touted the advantage of charging for drinks. For instance, at an investor conference in September, President Scott Kirby noted that "the cabin environment is much calmer and more efficient." In the past, he said, because drinks were free, nearly every passenger had one. The charge meant that carts no longer clogged the aisles, restroom lines diminished, less trash was left on board, and the frequency of aircraft catering diminished.

Nevertheless, last week, Mike Flores, president of the US Airways chapter of the Association of Flight Attendants, called the policy "a complete disaster" in an e-mail to union members.

"Passenger complaints have not died down (and) the quantity and provisioning of beverages is inconsistent," Flores wrote, noting that passengers sometimes become upset when flight attendants run out of drinks. "Simply put, the a la carte beverage program needs to go," he wrote. "No other airline has matched us and none will."

On Sunday night, Flores said the decision to drop the beverage charge likely was motivated by a continuing high level of passenger complaints and the failure of other carriers to match.

"The bottom line is that the airline industry is not the transportation industry," Flores said. "It's a customer service industry and if you're not pleasing your customers then you've got a problem."

While 2008 was a year when airlines generally benefited from adding fees for various services including the first checked bag, the second checked bag, and ticketing changes, occasional policy revisions have occurred.

In November, five months after AMR (Stock Quote: AMR) unit American introduced the concept of charging to check a first bag, Delta (Stock Quote: LCC) became the last major network carrier to sign on to the policy.

Delta had thought it might benefit by holding itself out as a carrier that eschewed the fee, but its passengers -- seemingly unaware of the distinction -- increasingly were carrying bags on board in an effort to avoid paying the non-existent fee.

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