US Airways is a lesson in how not to run an airline. They’re hemorrhaging money and doing their best to drive away passengers. That doesn’t seem like a particularly good combination, does it? Well they’re at it again this week, with more cuts announced. At least one of the announcements this week was a good one.
First, the bad news. They’re dropping more flights from Las Vegas. Six flights are on the chopping block, removing non-stop service from five cities, including New York City and Baltimore. It is hard to believe that they cannot make money on those routes, though the competition from just about everyone in the NYC market and Southwest in the BWI market may have something to do with those. They’ve come a long, long way from their former status of having ~150 flights/day from Las Vegas to the current schedule of ~62. And that’s a long way in the wrong direction.
And now the good news. Beverages will soon be free again. The seven month experiment of charging for beverages on flights has finally been declared a failure by CEO Doug Parker. But even in retreat Doug somehow manages to come off as a total schmuck on this issue. For starters, they are waiting a week to actually implement the reversal. You actually cannot get a free drink until next Sunday. Why? No one knows, but for some reason they are stretching it out just one last week. And then there are the quotes from Dougie:
While US Airways remains “firmly committed” to the a la carte strategy, “it is a work in progress,” Parker said yesterday in an e-mail to employees before the beverage policy was announced publicly.
“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.
“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,” Parker told employees.
So either people do or don’t buy based on the charge for beverages. Doug seems to think that it plays both ways, depending on what he’s trying to prove. Sure, they had the best on-time performance for 2008, but that’s much easier when you have fewer flights and even fewer passengers on those flights.
What is amazing to me is that the Board of Directors and the shareholders haven’t managed to toss him out.
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