US Airways backs down on $2 soft-drink charge

US Airways plans to announce tomorrow that it will bring complimentary sodas, juices, tea, water and coffee to its flights starting next month. Charging for soft drinks — particularly bottled water — was highly unpopular with many of its passengers.

Drinks haven’t been free in economy class since Aug. 1, when US Airways announced what it called a Business Model Transformation.

Here’s the letter US Airways’ Doug Parker has sent to employees:

Tomorrow morning we will make an announcement returning complimentary sodas, juices, tea, water and coffee to US Airways. The free beverage service will resume on March 1. This change reverses part of the a la carte business model we believe is right for our business and I’d like to explain why we made this decision.

When we launched the beverage purchase program in 2008 we knew it would generate additional revenue. From this perspective the program was very successful. What we didn’t know at the time, but later experienced, was that the cabin atmosphere would also improve with fewer carts in the aisles and shorter lines to the lavatories.

Today, while we remain firmly committed to the a la carte strategy – we also know it is a work in progress. 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. More importantly, this difference in our service has become 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.

We are not making this decision because the airline industry is now healthy. To the contrary, while oil prices have dropped, a global recession is having a material negative impact on industry revenues and our industry still needs business model changes as much as ever. Moving to an a la carte model has helped us build an airline that can withstand the uncontrollable factors that influence our industry and we need to keep trying new programs, like a la carte pricing. Frankly, it would have been a bigger risk for us not to have tried charging for drinks because innovation and a new business model are desperately needed.

In fact, we still expect to generate $400 to $500 million in 2009 from a la carte items like checked baggage fees, Choice Seats, and our new blanket and pillow offering – the US Airways Power-Nap Sack ™.

Aggressively managing our business by anticipating what our world may look like in the future is the cornerstone of our culture. In other words, we are always thinking differently about how we operate and are not afraid to take a chance on new ideas designed to provide career certainty and stability, great customer service and positive returns for our shareholders. It is also part of the reason we received a vote of confidence from our investors and business partners last fall when we raised close to $1 billion to help keep the airline strong.

We will be issuing a press release announcing this news early tomorrow morning, as well as posting it on Wings and theHub. Thank you for continuing to take care of our customers.

US Airways has done right by its customers today.

  • http://www.govisithawaii.com Sheila

    Good news!

  • Harry

    I have to admit, giving everybody a drink seems like a bit of a waste. I like the way that charging for soda make the whole “service” part of the flight last about 5 minutes instead of 30 minutes.

  • Brian

    US Airways has done the right thing. I hope Doug Parker and the other executives of US Airways learned a valuable lesson from this experience. They should know that poor business decisions will infuriate its customers thus causing them to take their business to another carrier.

  • http://www.twclimited.com/blogs Carter Stewart

    Thanks for the breaking story, Elliott! Honestly charging for soft drinks is just a step too far toward Ryanair/Easyjet. USAirways can afford to up it’s image a bit right now, and this mixed with Sullenberger, and their latest on-time campaings should do wonders for their goodwill and image. Good luck to them!

  • Mike

    So, offering a free drink will improve their image? i just don’t get it. The ticket prices aren’t noticable lower, they charge to check a bag, they charge for a small, no make that mini pillow, and about anything else they can think of and yet giving a free soft drink will improve their image?

    And $2 for a can of pop? what a ripoff. The controlling authority on air travel should either make all carriers provide complimentary beverages or offer them at a normal price. (between $.65 and $.85 for a can of soda in most places I visit) I say this because the security checkpoints will not allow you to bring beverages on board. so you either go thirsty for who knows how long or you pay an insane markup.

  • Monica

    This is wonderful news! My family will fly US AIrways in April and we certainly don’t want the additional expense. $2/ea for the 15 of us that are traveling could be saved to buy something the kids really want.

  • Jim J

    The free drinks are a small step in the right direction, but US Airways has got to show me much, much more to get me to take them off my personal no-fly list. Until they treat customers as valued guests rather than walking cargo, my travel dollars will go elsewhere.

  • Jennifer

    US Air only changed course on this decision because no other airline followed suit. As Parker said, “with US Airways being the only large network carrier to charge for drinks, we are at a disadvantage.”

    I don’t believe that this reversal will significantly change the public’s poor perception of US. Nevertheless, it’s still the right call.

  • Amy

    My only flight on US Airways is March 1st :-)

  • David Z

    I say this because the security checkpoints will not allow you to bring beverages on board. so you either go thirsty for who knows how long or you pay an insane markup.

    Then that makes offering free drinks a good thing, don’t you think? :)

    It remains to be seen if this upcoming move indeed improve their “image” towards the public. But they have an unenviable responsibility of balancing interests among their fickle-minded prospects, paying customers, arguably hardworking personnel, and investing shareholders.

    If anything, this might “challenge” the other airlines to do either the same or something similar…or arguably better. We’ll see.

  • http://www.brandlogic.com Emerson

    USAir has a lot more fence-mending to do!

  • david

    Once they eliminated the movies and music on all flights domestically they lost me. Charging for water made me crazy. I needed to take a pill and the FA gave me a cup of ice and told me I could wait for it to melt. The whole attitude of their personell turns me off. Paying $50 to go to their board room and having to pay for drinks and internet access lost me. It will be a cold day in hell I voluntarily fly on US air again.

  • LeeAnne

    “What we didn’t know at the time, but later experienced, was that the cabin atmosphere would also improve with fewer carts in the aisles and shorter lines to the lavatories.”

    Um…ew! So they’re evaluating their service decisions based on…exerting control over our bodily excretion functions? Wow, that’s taking things a wee bit too far, if you ask me…

  • Dang

    Whatever… really surprise USAir still exist.
    Logging more than 100,000 miles on different airlines every year, but flight only once in my life with US-Air because my original carrier missed my connection.
    USAir profit on the restriction of bringing liquid regulation. It sound like an organized scam.

  • Jay Drew

    I recently flew USAir on a triangle trip (SEA-WPB-PHX-SEA). One stop on all three legs, so a total of 6 different airports. I was annoyed by having to pay for beverages on board, but I could handle that by buying a water bottle in the terminal or filling an empty bottle from a water fountain.

    What put US Air on my personal no-fly list happened as I was boarding my last segment (LAS-SEA). Trusty rollaboard in tow, I lined up to board. The passenger ahead of me was stopped and informed that he had to check his carryon as it was too large. The agent directed that passenger’s attention to the carryon-bag sizer, which appeared to be pretty beat up; there was tape on the base where the bag outline normally was.

    As I handed the agent my boarding pass, I remarked that at least I wouldn’t have that problem, as I’d been flying with my rollaboard for 8 years and it had fit everywhere. He then said “Yeah, about that… I’m giving you a warning this time, but your bag is really too large. We shrank our sizers; the size limit for carry-ons is smaller.”

    That’s the last time I fly US Air.

  • MoNgo

    “What we didn’t know at the time, but later experienced, was that the cabin atmosphere would also improve with fewer carts in the aisles and shorter lines to the lavatories.” Well, duh. Here’s another news flash for your paid Industrial (time studies R us) Engineers, from the former head of American Airlines: You can save millions by eliminating just one pickel slice or one olive from your a la carte salads.

    So I can expect a lousy USairways cabin (on which the U.S. flag is painted on backwards) atmospheres of lines to the staph-infected toilet and beverage carts in the aisles, spilling sticky beverages on me 4 ounces at a time, while some old fart interrogates the attendant on the differences between Coke Zero and Diet Coke?
    Just stab me with a fork–I’m done!

  • James

    Whether the decision will improve their image isn’t really the point here as far as I’m concerned. What I like is that someone finally stood up and said this was a stupid decision and changed course. That’s a good start – now if they could only apply that same courage to other issues maybe the airlines wouldn’t be in such trouble.

  • MoNgo

    “Boy, these pickles are making me thirsty!”

  • Consumer Equalizer

    Oh how generous of them to decide to beat the consumer slaves on the plane a little less.

    It is NEVER the right business strategy to economically nickel and dime, no HARASS captive consumers. If they convince themselves in the future it is right because “everyone else is doing it”, that is called collusion, illegal and morally wrong.

    I am right in line with those consumers on here that object to fees galore. Why can’t they just raise the fares to include all the fees, include everything, and leave people the frick alone on their flight, at the ticket counter, in security, at the gate and on the plane?

    Fees are just an annoying slap in the face. I don’t want a drink fee, a pillow fee, a clean seat fee, a bathroom fee, a call light fee, a luggage fee, a tarmac fee, booking fee, counter fee, or any other fee. Do your damn job, take care of people without harassing them, the way it used to be.

    As long as fees continue though, I think as a consumer I should be able to charge incompetence fees, inconvenience fees and rudeness fees right back on the airlines and airline employees personally for all the inconveniences airlines force upon us. Gee don’t want customers putting fees in YOUR face? Don’t put fees in theirs.

    Whoever said fees are only for coporations to levy and not for consumers to levy in return? It’s a business contract – either party can set the terms or change them or levy fees.

  • David Z

    Why can’t they just raise the fares to include all the fees, include everything

    They could, but aren’t many people unwilling to pay them anyway? If US Airways charges $100 more than, say, Southwest for the same date/s and route/s with practically similar times and level of service, who do you think customers will more likely book with?

    US Airways, like some if not all other businesses, want to maximize their profit potential. Some are fine with making money up to a certain point, but that’s every business’ choice depending on how far they’re willing to push.

    It so happens that, also arguably, many people are willing to put up with US Airways’ so-called nickleing and diming. I also know some webmasters who bill customers for their time for extra support after building their web sites for a 1-time fee, some of whom complain they’re also being nickled and dimed for that.

    And don’t worry, you can levy your “outrageous” fees to US Airways or anyone who chooses to continue doing business with you. :)

  • John H

    Bringing back free drinks will not change my mind about not using US Airways.
    Living in PHX, they and Southwest are the dominant carriers. But at least Southwest recognizes that customers are #1.
    Case in point: I had two vouchers worth $200 each on US Airways. My wife and I wanted to travel to Charleston. When I called to use them I was told that the lowest fare that could be quoted by the agent of the phone was almost $200 higher than the internet fare, making my vouchers worthless. I traveled on Continental for less than US Aiways internet fare and was treated like a valued customer.
    US Airways has a LONG ways to go before I ever ever ever fly them again.