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Well, the dominoes are starting to fall. After foreboding rumblings emerged from the US Airways shareholder meeting on Wednesday—including a prediction that the carrier's fuel bill will total $2 billion this year—the airline announced Thursday sweeping cuts and a flurry of new fees. First up, it will add a $15 fee for first checked bags, making it the third legacy line to do so. The fee will affect tickets purchased after July 9, and will apply to all domestic flights as well as service to Canada, the Caribbean, and Latin America. The news came mere hours after United added a fee of its own. American was the first airline to add this fee.
US Airways will also begin charging for onboard soft drinks, effective August 1, moving the airline toward a bare bones a la carte service model never before seen among legacy carriers. All non-alcoholic beverages, including bottled water, will cost $2. For comparison, low-cost carriers such as JetBlue and Southwest provide complimentary beverages, including sodas, coffee, and yes, bottled water. Alcoholic drinks, currently $5, will cost $7.
US Airways Dividend Miles members won't be spared pain either. To redeem award tickets, you'll now have to pay a new fee of $25 for domestic awards, $35 for Mexico and Caribbean awards, and $50 for Hawaii and other international destinations. The new fees take effect August 6. Note that this is in addition to the existing award ticketing fees.
But wait, there's more! The carrier will reduce flight capacity by 6 to 8 percent in the fall, particularly in Las Vegas, where service will be cut by roughly 50 percent. Ten planes will be returned to lessors, and two planes scheduled for delivery will be canceled.
There's a lot to digest here. First, the baggage fee, which in and of itself isn't a surprise (a sign of the times, to be sure). What is surprising is the routes affected. United and American limited their baggage fees to U.S. and Canada service, but US Airways has expanded to non-U.S. Caribbean islands and Latin America. That's not an insignificant amount of traffic, so the carrier has really raised the stakes.
Second, the soft drinks. Obviously this is going to be very unpopular, as it should be. My main question is whether or not passengers will have to buy a bottle of water if a plane is being held on the tarmac.
Third, sticking it to frequent flyers is a daring choice (even Chairman's and Platinum Preferred Members won't be spared), and possibly quite foolish. Theoretically, frequent flyers are a carrier's most dependable passengers, so it seems illogical for US Airways to hit them with new fees.
Lastly, the route reductions will mean less choice for passengers going forward. Most of the Las Vegas flights being cut will affect US Airways late-night service, save for a few East Coast routes.
And, of course, behind all this cost-cutting, people will lose their jobs: 1,700 employees in all, including 300 pilots, 400 flight attendants, 800 airport employees, and 200 staff and management.
You forgot to mention that US Air is ending the bonus miles accrued by frequent fliers which previously boosted miles by 25%-100%. This is a significant blow.