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US Airways: Fees to Stay Regardless of Oil Prices


As oil prices (and jet fuel prices) continue dropping faster than your 401(k) balance, many have wondered if, and when, airlines would begin rolling back those fees introduced throughout the spring and summer. Well, if you are a US Airways flyer, here's your answer: Don't hold your breath.

According to The Arizona Republic, US Airways CEO Doug Parker said he has no intention of eliminating the airlines' new fees, no matter where oil prices go. "You never say never because competitive forces could eventually force us to turn back," he said, "but we certainly hope that's not the case and don't believe it will be."

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Parker points to the charge-for-everything approach as a solution to years of industrywide financial struggle. "It's a better model for an industry that's been struggling for a long time to find a model that works," he said, noting that US Airways' new fee structure has been a success for the airline. In fact, US Airways estimates its fees will bring in between $400 million and $500 million in annual revenue.

Parker also offers some illuminating logic behind US Airways' fee structure and the a-la-carte model overall, noting that no other business gives away things like soda and food. He also says airlines have treated every seat in coach the same, and gives baseball parks as an example of how to implement a tiered pricing system that reflects the quality of one seat over another.

What it all comes down to, of course, is that US Airways isn't deviating from its new fee structure any time soon. "We're really excited about how this is playing out for the airline," Parker said, and it's easy to see why. While many would like US Airways and other airlines to lower fees as fuel prices decline, that reduced cost only makes it easier for an airline to post profit. Good luck arguing against that.

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