This is just another sign, airlines are moving towards an "a la carte" menu to extract additional dollars from their customers.
In business school, this approach involves extracting additional customer surplus to maximize company profits. By further segmenting the flying population, the airlines can extract additional surplus which it was giving away on a first come, first serve basis. With oil prices at a record high, airplanes are competing to stay in business, not steal away customers from other airlines. By cutting down on flight schedules, seat capacity is now in short supply so there is no concern about flying empty airplanes. In a market with limited competition, the customer will pay the price.
Just when you thought it was over…
Here’s a few choice quotes from the article:
"…the combination of reducing seating capacity within the airline’s fleet, moving toward an a la carte system of charging fliers for such things as checking bags, eating and drinking, along with expense reductions, will save the Tempe, Ariz.-based carrier $500 million annually."
"In addition to charges for baggage and refreshments, US Airways has raised the $15 charge to book flights through its call center to $25 for domestic flights and $35 for international flights. The $20 service fee to buy a ticket at an airport or city ticketing office increases to $35 for domestic travel and $45 for international travel."
"Most airlines except Southwest have announced capacity and personnel reductions, and a la carte charges."
"Fare-paying now looks like the customer is just paying the base price for the flight…You want doors – that’s going to cost you more."
"Right now, you’re dealing with a panicked industry which, after fuel costs, is making about 30 bucks a seat…If they can get an extra $10 out of a passenger, that’s a 33 percent increase. The industry already has sold most of its product for July and August below cost."
Don’t hold your breath - you can expect the other airlines to follow shortly.