Meeting with Doug Parker Yesterday (11/5/10)

[Art at ISP]

While we did not ask specifically about that, they were asked why they had policies and procedures (such as choice seats) which were NOT in line with their competitors. The general sense was they'd rather have the extra money today and risk losing the customer for the long term.

One of the repeated themes was that the extra fees, and charges are here to stay, because they would help the airline survive if business goes south again, which we all know it will (industry wide). They will not increase capacity and will not give pay raises just because of one or two good quarters.

Regarding the pilots issue, your bitterness and anger should not be directed at customers. The ongoing dispute affects the whole company, and in turn those who fly them. So get over it. If you spent as much energy trying to find a solution as you do railing against others maybe you could solve the problem.

Again, I give management alot of credit for meeting with us in the first place. They must have KNOWN it would not be the most friendly crowd....and we did behave nicely, although we did ask tough questions.

 

[Hope777]

TOTALLY AGREE! Really don't understand WHY any passenger would even be concerned with the topic or even interested............it has NOTHING to do with them. Even another airline employee........nobody cares what You think Could, Should, Would need to be done. I certainly don't lose sleep over Holiday Inn changing their logo and wouldn't choose to NOT stay at one of their locations because "I" don't really care for their new logo. People are absolutely amazing and pathetic at times. The Pilot Issue at US pertains to the PILOTS O-n-l-y at US and No One else. And let's really stop the silly notion of having ANY type of Nonsense Interest in H-o-w it will be resolved. Unless You are a pilot...........NO ONE gives Two *'s what You think on the matter. And that is REALITY! Face It!

I do have to say that the Pilot Issues Pertains to ALL 35,000 Employees of USAirways.......

 

[No Land Green]

The total profit year to date, however, was roughly equal to the amount collected in baggage fees.... hmmmm....

Hi Art,

Thanks for the post.

Just to comment on the above statement you made. Parker has said the same thing in the Crew News Videos. So since you mentioned someone brought up the Pilots at the gathering, if you do the math, IMHO, there is no real rush to have a new Pilot CBA on the part of Management. If we stop charging for bags, LCC will be a money loser again. In a way it is a shame that we can only make money charging for checked baggage...........

 

[SS255]

Hi Art,

Thanks for the post.

Just to comment on the above statement you made. Parker has said the same thing in the Crew News Videos. So since you mentioned someone brought up the Pilots at the gathering, if you do the math, IMHO, there is no real rush to have a new Pilot CBA on the part of Management. If we stop charging for bags, LCC will be a money loser again. In a way it is a shame that we can only make money charging for checked baggage...........

That's pretty much what Doug said. I can definitely see the logic in all of the above, from an airline management standpoint. But (pilot dispute aside) there is something fundamentally wrong with a business model which relies upon baggage fees to be sustainable.....and where the management is not confident enough in long-term profitability that they are willing to 1) incrementally increase employee salaries, 2) invest in the product, and 3) eliminate uncompetitive fees.

This particular crowd represented the mindset of the business traveler. We are looking for decent value, NOT the cheapest ticket. I don't have to pay any bag fees on US, but I would willingly pay $50 more roundtrip and sleep easy knowing that US is not losing money on my ticket than have US stick my fellow travelers with onerous baggage fees which may or may not keep them in the black.

Despite what the spreadsheets may say, US is losing revenue by charging fees which other airlines do not charge.

 

[nycbusdriver]

But (pilot dispute aside) there is something fundamentally wrong with a business model which relies upon baggage fees to be sustainable.....

I disagree. Airlines are in the business of selling air transportation. Why should cargo in the form of passenger baggage be exempt from fees when it is transported by air? It definitely costs the airline a lot of money to carry this cargo.

It may not be a sound business model when considered competitively, but that's because airline passengers were traditionally spoiled in the pre-deregulation era, and some carriers still want to continue those illogical perks.

Every average Joe pretty much agrees in the principle that there's "no free lunch"...until they buy an airline ticket.

 

[ChockJockey]

....it has NOTHING to do with them. Even another airline employee........nobody cares what You think Could, Should, Would need to be done....The Pilot Issue at US pertains to the PILOTS O-n-l-y at US and No One else. And let's really stop the silly notion of having ANY type of Nonsense Interest in H-o-w it will be resolved. Unless You are a pilot...........NO ONE gives Two *'s what You think on the matter. And that is REALITY! Face It!

What an unsurprisingly egocentric statement. Right, because the entire Epic Pilot Struggle (2005-201?) is taking place in a vacuum and has no effect on the operation or culture of the airline, the quality of the product, the people who depend on it for income and occupation, the labor relations/positions of the other work groups, our vendors and partner airlines, investors, and the people that pay money to keep us in uniform. Because, as evidenced by the thousands upon thousands of cheerful and productive posts in the Pilot thread, they're doing such a bang up job so far on reconciling their concerns.

Despite what the spreadsheets may say, US is losing revenue by charging fees which other airlines do not charge.

Is this based simply on sentiment and anecdote or do you have actual hard data that Tempe somehow doesn't?

I disagree. Airlines are in the business of selling air transportation. Why should cargo in the form of passenger baggage be exempt from fees when it is transported by air? It definitely costs the airline a lot of money to carry this cargo.

I read an article some time ago in which the reporter did an analysis on baggage fees and if the cost incurred the airlines by the transport of the average bag could justify such fees. Apparently US was the only carrier willing to share operational specifics and after compiling costs for fuel, equipment, labor, insurance and belt maintenance, the average per-bag cost to carry came to be roughly the same as what the fees were at the time. I don't have the time to find this article right now but if I dig it up I will certainly post it.

People think one or two bags is no big deal, but put 100 bags together in an aircraft bin (~3000 lbs) and fly them from one side of the country to another and it's a considerable operational cost. There is no doubt that baggage fees will scare away a certain number of travelers, but fewer bags have helped US' operational performance in terms of baggage handling and on-time performance, two categories in which we've been beating Southwest.

 

[Art at ISP]

Allow me to clarify a point or two...and thank you Chock Jockey for your retort to the angry and the bitter.....

First- we have no fundamental objection to the baggage fees in principle. Those are not the fees which SS255 was referring to as being non-competitive. The issue is that the company's reliance of the fees alone for their profit (or the appearance thereof) does not constitute sound business practice. We realize that baggage fees are here to stay-right or wrong, but every airline with few exceptions (such as Southwest) has them now.

The fees which we object to are those charged to Elite Flyers such as charging a Chairmans Preferred or Platinum member for a Choice Seat, or the aforementioned mileage redemption/redeposit fees. Virtually EVERY airline who charges extra for seats or mileage transactions waives them for their upper tier elites, WITH THE SOLE EXCEPTION of US AIRWAYS. When I asked the question regarding those fees, Doug's initial response showed he was making some erroneous assumptions about how that actually worked (a Chairmans member in the audience politely told him he was wrong on a couple of points). After he answered, I said, "so does this mean you would prefer to have my $15 to $20 today for the seat at the risk of losing my $15-$20K in business over the coming year?"

"Well when you put it that way, no" was his answer...but the actions do not reflect that answer. At the end of the discussion of this question, Doug agreed to take another look at that policy, and we expect him to do so. They have reversed some other poorly thought out decisions in the past, and there is no guaranty that they will reverse this one, but a promise to look into it further is good enough for now.

Regarding the potential loss of revenue from people who choose not to be nickel and dimed, we do have hard evidence of hundreds of former US elites who have moved on to other carriers and never looked back. We offered to provide that data, including annual spend of those who left (of course trusting the respondents to give accurate information), but at the time they chose to ignore the information offered. Therefore, I have commissioned another survey of the almost 1500 FFOCUS members and hope to have an up to date snapshot of the high tier flyers who belong to our group for US in the near future.

I want to emphasize again, we are VERY grateful to Doug and his team for hosting us last Friday. I had a rather detailed conversation afterward with Fern Fernandez in Customer Loyalty and Marketing afterward, and hope to follow up with hard data for him soon.

I will no longer comment on the appropriateness of our group bringing up the pilots' dispute... bottom line is the longer it goes on the more it hurts just about everyone.

Thanks--and if you have anything constructive to add we're all ears.

My BEST to you all.....

 

[BoeingBoy]

Every average Joe pretty much agrees in the principle that there's "no free lunch"...until they buy an airline ticket.

Well, ole Joe looks at it this way - he can go to another counter and buy a ticket without the checked bag fee or he can buy a ticket from US (or any other legacy) and pay the bag. fee. It's not Joe's fault that US needs the bag fee money to make a profit so why should he pay more than necessary? It's not a "free lunch" if someone else is willing to sell the ticket without the bag fees.

That's the problem that the legacies have on their hands. They can't compete on price with the lcc's so they have to charge extra fees so that they can appear to compete on price.

Jim

 

[ggiby]

Guys, FFOCUS still has pictures of "dirty seat backs", "broken seats", and "long customer service lines" from ~2003, when US was in the doldrums (yet they claim to be advocates for all airlines now, not just US).

They can't even update their HOME PAGE. Come on.


Take it for what it's worth.

Right on w/ your comment... The focus stuff is years old.... Come on guys... get w/ the 21 century LOL....

 

[usa1]

I disagree. Airlines are in the business of selling air transportation. Why should cargo in the form of passenger baggage be exempt from fees when it is transported by air? It definitely costs the airline a lot of money to carry this cargo.

It may not be a sound business model when considered competitively, but that's because airline passengers were traditionally spoiled in the pre-deregulation era, and some carriers still want to continue those illogical perks.

Every average Joe pretty much agrees in the principle that there's "no free lunch"...until they buy an airline ticket.

I couldn't agree more .... I never understood why the guy with no checked "cargo/bags" paid the same fare as the guy behind him in line who checks 100 pounds freight. The guy with no luggage simply subsidizes the other guy. Moral to the story ... travel lite and save money!

 

[Be Careful What You Wish For.]

But (pilot dispute aside) there is something fundamentally wrong with a business model which relies upon baggage fees to be sustainable.....

You apparently are the person who unbundles their cablel-internet-phone bill.

 

[Bear96]

Really don't understand WHY any passenger would even be concerned with the topic or even interested............it has NOTHING to do with them. Even another airline employee........nobody cares what You think Could, Should, Would need to be done. I certainly don't lose sleep over Holiday Inn changing their logo and wouldn't choose to NOT stay at one of their locations because "I" don't really care for their new logo. People are absolutely amazing and pathetic at times. The Pilot Issue at US pertains to the PILOTS O-n-l-y at US and No One else. And let's really stop the silly notion of having ANY type of Nonsense Interest in H-o-w it will be resolved. Unless You are a pilot...........NO ONE gives Two *'s what You think on the matter. And that is REALITY! Face It!

Actually, the pilot labor issue is one reason why I (a frequent flyer) generally try to avoid LCC.

The extreme anger and lack of logic displayed by the East posters here has made me want to minimize my chances of being on the same plane with them.

 

[usa1]

Actually, the pilot labor issue is one reason why I (a frequent flyer) generally try to avoid LCC.

The extreme anger and lak of logic displayed by the East posters here has made me want to minimize my chances of being on the same plane with them.

It's all politicking ..... Do you avoid the United States because the politicians bicker for whats in there best interest?

It's also like a family / domestic disturbance .... don't get involved, because they'll both turn on you. Once it gets work out they'll kiss and make up ....

 

[Bear96]

It's all politicking ..... Do you avoid the United States because the politicians bicker for whats in there best interest?

I agree with what some politicians "bicker" for if it would end up benefiting me.

I do prefer not to travel to, do not do business in and would not relocate to certain parts of the country because of the local political tone (i.e., some parts of the country have or want to have laws that are downright hostile to me and my family - but now we are getting way off topic).

 

[wings396]

I couldn't agree more .... I never understood why the guy with no checked "cargo/bags" paid the same fare as the guy behind him in line who checks 100 pounds freight. The guy with no luggage simply subsidizes the other guy. Moral to the story ... travel lite and save money!

I agree as well. If charging bag fees add to the bottom line profits, then keep collecting them. This only goes to further prove that this industry has been selling its product below a sustainable cost for many years now. Ticket prices are equal to or even lower than they were 20 years ago, while everything around us has gone up in cost. The cost of operating an Aircraft alone is way above what it once was, yet the Airlines continue to offer foolish fares that can't cover their cost just in order to sell a friggen ticket. We all know very well that they have stripped the employees of wages and benefits to cut costs, so what more can be done in order to make a profit? You can raise the fares a bit and/or charge for any extra services that are being provided to become profitable, and this is exactly what most have done. We are in the business to make money, not just to bearly break even so everyone can fly all over the place in a cheap seat that cost less than a train or bus fare in most cases. My wages are about inline with what they were 15 years ago, but it seems that EVERYTHING that I need to purchase has gone way up during that time. Boy I wish that I could go buy a brand new car for $10k and have it dropped off at my front door with a full tank of gas too!