Why Did US Airways End Charges for Soda and Water? To Enhance Its Rep

Over the weekend, US Airways said it would stop charging for soda, water, coffee, and tea on March 1. You’ve probably read about this elsewhere by now, but it’s interesting to think about why they’re finally relenting on something that they held out on for months. It appears that this is a big shift in the US Airways strategy. The airline is now admitting that perception is important, and it is taking some seemingly small but actually big steps to fix their image problem.

In a world where airlines gladly charge for anything they can, US Airways surprisingly went it alone on this drink charge. No other major airline followed the lead to charge for soda and water. The airline resisted changing back despite all the criticism . . . until now. In the words of CEO Doug Parker:

We know 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. More importantly, this difference in our service has become a focal point that detracts from all of the outstanding improvements in on-time performance and baggage handling that all of us have worked so hard to achieve over the past year.

This really is a big change, despite what they’re saying. It was just last September that the airline explained how happy it was with the change. President Scott Kirby went so far as to say that the flight attendants would “riot” if they went back to the old way. Talk about a change of direction, huh?

New US Airways Ad Campagin (er, not)

It appears that the airlines reputation and high level of consumer complaints have caused the about-face. US Airways has made excellent strides with its on-time performance lately, and overall reliability has been quite good, yet the airline still ranks toward the bottom of the list when it comes to complaints. In December, for example, US Airways had the second best on-time performance behind perennial leader Hawaiian Airlines. The airline canceled only 2.1% of flights in the very difficult month (poor weather) and reported fewer mishandled bags than the industry average. But when it comes to complaints, the airline finished next to last, just ahead of cellar-dweller United. So what’s going on?

At last year’s media day, the management claimed that they needed to focus on reliability, appearance, and convenience. Apparently, management has now realized that it’s not enough. They actually need to do more than that to keep people happy. They must have been receiving a fair number of complaints about charging for water and soda, so they relented. They’ll lose some money on this, but people will be happier. And that has now strangely become important to them. What a pleasant surprise.

They are also looking to address other sore spots. Instead of just being happy with a strong on time performance, they’ve actually decided they need to tell people about it. This is an airline that has really avoided brand advertising for years. But now they are actually finding some value in it, and they’re promoting their on time performance in several different types of media.

It’s a very interesting move for an airline that had been moving to a true a la carte model and had not put stock in brand advertising for many years. Personally, I would have thought that simply not charging for water would have been plenty. As long as people can get something to drink, they’ll be fine. But US Airways has decided to remove the charges from soda, coffee, and tea as well in order to boost the airline’s image. It will be interesting to see if the consumer complaint number starts to drop after this move.


21 Responses to Why Did US Airways End Charges for Soda and Water? To Enhance Its Rep

  1. A says:

    For the leisure or business traveler I’m sure the charging for beverages generated complaints, but did it reduce traffic? Airlines can add all kinds of nickel and dime charges to generate revenue but most people don’t think about that. They go to their favorite website and search the cheapest possible fares with best available schedule. As a business traveler the only times I’ve flown US Airways is when they had the best schedule, otherwise I’d have gone with my perferred carrier. So, next time that person books a vacation or business trip they probably will care more about a lower ticket price and/or schedule than the $2 they spent on a can of Coke last time around. Not saying US Airways should keep charging, but I don’t think it’s as big a deal as it’s made out to be.

  2. Dave says:

    I think that the reason US Air reversed course on this was that none of the other airlines followed suit. Had United, Continental, American or Delta adopted the same policy, it would have been here to stay. Now i wonder if they’ll bring back movies on long flights. I was on US Air from Charlotte, NC to LAX recently and really wished for some help in passing the time. Now when i fly to the west coast, i make sure it’s not on US Air.

  3. Carl says:

    That’s is great news that US Airways are discontinueing the drink charges…I was actually sick and tired of reaching my wallet every time I wanted a drink. Now if they can make money with $7 beer, wine, and mixed drinks that would be fine. If not, lower it back to $4 or $5, US Airways would surely break even in no time!

  4. JM says:

    CF:

    You have it right– it is all about their reputation.

    US Airways/USAir has suffered for many years from having an “also-ran” reputation. The pay-for-beverages concept added to that reputation, undeserved or not.

    It is also the right move. They have admitted making a mistake and are reversing it. That shows that they have listened to their passengers– who complained about removing free beverages.

    As to US’ strategic direction, they been pretending recently to be a low cost carrier– which they are not.

    Instead, charging for beverages move helped to cement their reputation as a high fare (at PHL and CLT, anyway), low service, also-ran carrier.

    They should play to their strengths. US is a legacy carrier with comfortable aircraft, great on-time performance, and (as the Hudson River experience told the world), damned fine crews.

    That’s a great reputation to have!

  5. Zach says:

    Why exactly would FAs “riot” for having to once again do what every other FA in the non-Eurobudget skies is already doing (handing out cans of soda and mini-bottles of water without collecting cash or swiping a credit card)?

  6. Let’s not discount the waves of great publicity it received in the aftermath of flight 1549. This move capitalizes on the most lasting image many people will ever have of US Airways.

  7. CF says:

    Zach – Kirby said the flight attendants would riot because they had it much easier without having to do a full service. Since so few people actually bought drinks, it made it easier. The flight attendants, however, would disagree with that statement.

  8. I’m actually kinda sad this didn’t stick. I would’ve liked them to perhaps go to only credit card, and make the price $1.99 which is psychologically cheaper, and make water free.

    Its sad people get all in arms about the drink. When is the last time you went to a restaurant and got a free soda? Its actually part of the meal, but its always been sold a la carte…

  9. TheRobin says:

    To me the charge of $7 for a can of beer is really stupid. I would pay $4-5 for one, but not $7. Not for beer at least. They would make more money if they lowered the beer charge a few bucks.

    I also agree that if they made water free, it would be fine to charge for soda.

  10. I wish I had access to their sales numbers, and seeing if when beer was $5 if they ever ran out, and how by how much?

    That would be really useful data to have in determining their pricing.

  11. Benji says:

    Good move on their part… I honestly tend to think more about price and safety record than anything else, but following that, how I’ll be treated. I don’t pay attention to being on-time, since that is always such a gamble. It’s nice to see USAirways taking a negative (yes, standing out from their rivals in a bad way) and using it to point out the positives. Now if only they wouldn’t charge for blankets or checked bags…

  12. Artie says:

    I wanted to state that when it comes to drinks making a difference in consumer behavior, at least for this consumer, yes it does!

    That said, let’s be sensible. If the price difference is significant (for me that is over $50), then drinks won’t matter. But the last several flights I bought cross-country were under $50 difference in price between US Airways and the airlines I actually did buy the ticket from: American and Virgin America.

    All else being equal (because it was, including having good flight times that worked for me), I actually DID choose AA and VA over US even though US was a bit cheaper…simply because of the drink policy! Had US announced this earlier, I would have booked with them.

    Yes, I recognize this is only anecdotal evidence and I certainly don’t know what the numbers say about whether they lost traffic. But I tend to believe that there must be others out there who acted similarly; how I am treated in the sky makes a difference to me.

  13. Oliver says:

    US Airways would have to do a lot more than just tout their on-time performance and free drinks to make me a passenger.

  14. Oliver (the other one) says:

    Artie, how’s your nose doing? ;-)

    Spending significantly more money on a ticket to save a few bucks on a drink doesn’t seem, wise “in these tough economic times” (I really love how this fits into pretty much every argument these days).

    I booked a trip from SFO-PHX last year. Outbound on US, return on UA/TED. Both flights were fine. I brought my own water bought at the airport (which turned out to be more expensive than US’ water, but I was drinking some before the flight). And on the return I got a free cup of diet coke from Uncle Ted (remember, they don’t give you cans). I picked the US outbound flight (even though I am a UA 1) because it was at a more convenient time, for the same price as TED.

    I guess I am with Nicholas on this issue.

  15. jonathan reed says:

    From visiting flyertalk.com, I think US has gotten the reputation of being the cheapest major airline. Fly first class, but forget meal choice if you aren’t in the first couple of rows. Pay for water. These things add up and create an airline that frequent flyers love to hate. Frequent flyers are usually flying on business and paying more for their tickets. If you hate US you may have many opportunities to get your business to put you on a different airline. The leisure traveller may be more rationale about not avoiding US because of one charge or another, but the business traveller often finds travelling a pain and it is psychologically less stressful to find an airline to hate than a boss to hate.

  16. Shannon G says:

    Bottom line: Follow the leader didn’t work like it does with fares…

    I flew US last week PHX-SEA-PHX. I saw quite a few pax handing over the cash or plastic, myself included. On the return flight I bought a snack box(pretty good assortment of treats for $5) and asked for ice only which the yhad no problem with giving us free. I bought a few bottles of soda in the airport so it wasn’t as bad as the $2 each for a can.

  17. Artie says:

    Oliver (the other one) –

    My nose is fine, thank you very much; but your eyes might need a fine tune ;)

    I said I would NOT spend significantly more money to save on drinks. Unless you count the $25 difference in fare I paid a significant difference, in which case, ya, regardless of economic times, I’m guilty of valuing my drink THAT much – lol :)

    I suppose I should have noted earlier that I have loyalty to AA for the miles and I have loyalty to VA for the oh so cool Red system that makes ordering anything tres cool!

  18. axelsarki says:

    Quite frankly, the guy that thought about charging for water should be shot.

  19. Richard says:

    As a business consultant I always look at these types of decisions.

    People often don’t think things through. Will a couple of buck charge for water or soda make up for the bad press and resentment from the customer? I think not. And their change in policy proves it.

  20. JC says:

    Hey–I’m a flight attendant for guess-which-airline… and I just wanted to say–

    Cranky, that billboard is funny as hell.

  21. Bill C. says:

    My wife and I flew U.S. Airways from Phoenix to Ixtapa and back on Feb.,1st and 10th. I refused to buy a beer for 7 bucks!! Outrageous!! The funny thing is, I never saw anyone else buy one either!! So, where does ANy profit for them come from??? It doesn’t!!! The Brain Surgeon running this airline,obviously has never heard that old saying,” Pigs get FAT, HOGS get slaughtered”!! I’m sure glad this marketing genius,does not work for me!! $4.00 Beer will sell!! $7.00 Beer will sit in the plane and go skunky!! PS. I know how to resolve the mis directed baggage too!! Then you will really start making some $$$$$!!!

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