Yesterday, I posted the first half of my interview with current US Airways CEO Doug Parker. We talked most about employee communication, but today, I post the second half which is more about the customer experience, and what we might expect from the new American Airlines when he takes the helm of the merged carrier. Keep reading to find out which product features he thinks are most important, how the airline is going to compete in Asia, and a little bit more about the oneworld transition.

Cranky: When you are looking at the combined airline, a couple years down the line, there’s obviously a lot of integration that has to be done. But when you’re looking at the other two most similar competitors in the US, do you look and say, “this is an area we’re going to need to do a lot of work in to be competitive”? Or is it just a matter of getting the network together?

Doug: You know this stuff as well as I do. The big value is getting the networks together. Our biggest disadvantage at two carriers is scale. No ifs and or butts about it. You have to get that done. Are there others? I’m sure there are, but you know, I don’t think we at US Airways are losing customers to Delta and United because of the inflight product differential. If we’re losing customers, it’s because of scale.

Having said that, what I do think is once we get to the same scale… if the classic airline people care about schedule and price, you’re gonna have three airlines that pretty much have similar schedule, value proposition, and we always have the same price proposition because we have to match each other, or close to it. So then the other product attributes you’re gonna start seeing become more important again. You’re gonna see us start competing more on those other things. We do a lot of it now of course, but it becomes more important as we get to three airlines that are competing for those high value customers.

Cranky: Are there specific parts of the product that you see as being particularly important? Not the olive you put in the salad, but the seat, the service, the meal or is it everything?

Doug: No, it isn’t everything. Some things matter a lot more. Certainly for international, lie flat seats [in business class]. If you don’t have it, you’re gonna lose customers. It’s incredibly important. We have it now. Domestically, you know, we have a lot of anecdotal evidence, including ourselves, of people switching airlines because of whether or not there’s wifi on the airplane. That’s one of the things that will drive share if you’re not there. We’re all gonna be there for that reason, but that’s what happens with these things. We all have to do it or we’ll lose share. Those things are incredibly important.

Other things are important but hard to actually identify if you’re losing share or not from things like an extra inch of legroom or the olive or slightly better meals… but if you’re not competitive, you don’t have something that’s close enough or in the same ballpark, maybe I don’t have quite as much room but the seat is more comfortable. If it really feels different, you’re going to lose customers. So we can’t get in that position. And we think we’re going to be a position where we’ll have a product that’s as good or better than what the other guys have out there, the other guys being Delta and United.

Cranky: Do you consider premium economy, similar to Main Cabin Extra on American, is that something you have a view on right now?

Doug: Yeah, but I don’t think we’ve announced it yet but it’s one of the things we’re going to look at. Certainly the other guys have it, and there’s no doubt that customers will tell you for certain it’s one of those things that really matters. The offset to that is whether there’s enough [benefit to justify] the fewer seats, of course. Those are decisions we’re going to have to make, but it’s definitely a product attribute that matters to people.

Cranky: I’m probably getting a little more into the weeds for you, but how do you view Asia? We’ve talked today about how that’s the hole in the route network. How do you view that? Is there a way to adequately serve everything that needs to be served?

Doug: Adequately, of course. I think we will have a lot of growth opportunities with the bigger and stronger network with more hubs to serve more spots on American to Asia. When you add them all up, it’s still not going to be as big as what Northwest brought to Delta or what United has because they’ve had those things since a treaty in 1952 or some such thing. So that’s not something that can be replicated, but they can’t replicate our Latin America network. What really matters is when you add it all up, how does it compare? And we feel really good about our network versus either of those in total.

Agreed they’re going to have a stronger Asia network, but then what really matters is making sure you don’t lose customers throughout the rest of your network because you can’t get them anywhere in Asia. Of course, we don’t have that problem because of oneworld with JAL and the other partners, Qantas etc. We can get people anywhere in the world on really good airlines. I don’t view it as an issue. I think there’s a lot of growth opportunity; I’d probably describe it more as tactical than strategic. But we’re not gonna go try and build something we can’t build. We just need to make sure our customers that want to get there can use the miles they earned flying around our network and they can do that with our partners.

Cranky: And with oneworld, do you think this is going to be a difficult transition for you and your management team? I know you have this anchoring, I guess, with Star Alliance and your partners’ hubs and operations, and now to switch like this. Is that not really an issue?

Doug: I don’t know… Go ask Andrew [Nocella, SVP Marketing and Planning] or one of those guys who knows better than I do, but I haven’t heard it described that way. It’s the anchoring term where I kind of looked at you funny. I don’t think we view them as anchors. There are airplanes that fly into there that can fly to somewhere else. There are other airplanes currently flying around oneworld that can be flying into our new hubs. They are movable assets that’ll move. They’re not anchored at all. We certainly haven’t gone and built immovable structures around the Star network and Star partners haven’t built them around our network. To the extent Lufthansa is flying to one of our hubs and now we’re not in Star so it doesn’t make sense for them to fly there, which may or may not be the case, but my guess is that it makes sense for BA to fly there. Those kind of things might happen. But it’s as simple as that; an airplane stops flying to Frankfurt and begins flying to London.

Cranky: I’ll end on a personal note. Are you gonna be sad to leave Phoenix?

Doug: Yeah. We like it here, man. The kids have all grown up here. That’s one of the bad things, but it’s not about me.

Cranky: It has to be done.

Doug: Exactly. And Dallas is a good place. Gwen and I met there; she has family there. It’s not a bad place. It’s a good place. For the record [laughs], we like Dallas. Dallas and Phoenix are both great cities.

Cranky: And Ft Worth [laughing]?

Doug: Ft Worth, great city.

Cranky: Well I want to be mindful of your time, so I’ll end it here.

Doug: Thanks, Brett.

And that’s a wrap on my interview with Doug Parker. Click to read the first part where we talk about employee communication.

Last week, I had the chance to interview current US Airways CEO Doug Parker. As we all know, he’ll be running the new American Airlines when the merger closes at some point in the third quarter of this year. It ended up being a good 20 minute conversation, so I decided to split this into two parts. Today we’ll start with the piece on employee communication. That was clearly an important theme that came up time and time again at media day. Tomorrow we’ll get into more about important onboard product features, plans for Asia, and more.

Cranky: I was told originally I had like 10 minutes, so I thought I’d spend this whole time discussing the livery.
Doug Parker, US Airways CEO: [Big Laugh]
Cranky: I have no other questions.
Doug: You know, nobody’s asked about the livery today.
Cranky: That’s because everyone knows better by now.

Cranky: It’s always interesting to watch the progress [at Media Day] every year, but with US Airways, things are running well. The things you said you’d focus on with reliability, convenience, and appearance are working well. But now it’s a completely different story with American because it’s a completely different kind of airline. When you’re approaching this, there’s so much to consider around network, employees… how do you even decide where to focus your time?

Doug: Mine?

Cranky: Yeah, yours specifically

Doug: My time is and has to be focused mostly on employee communication. That’s where I’ve gotta be spending my time. I can do some of that now, but I can’t go traveling around the American system; though I guess I could if I asked. But it’s less effective anyway since we’re two separate airlines. The right thing to do is to go around and let people know what’s going on. One it’s the right thing to do and two, it’s an easy thing to do because we have the right people doing all this.

So much of this is just trying to learn it all. One of the things, having done this before now, we have the ability now to look back and the reality is I don’t remember what happened in the first 6 months exactly in the US Airways/America West deal. At the time we were thinking, “we have to get this done tomorrow and this done tomorrow and we’ll do all those things.” But the real answer is that’ll pass. And you can get yourself so focused on that that you forget about the longer term. The integration has to get done and it will get done, but that’s not the big picture. The big picture is we’re going to go build this airline and it’s gonna take time to do it right. It’s going to be something that lasts forever, not for 6 months. So that’s my focus.

Cranky: When you’re talking about employee communications, it’s a tall task. Maybe not the nuts and bolts of it, but having an impact on the employees. I’ve had several flights on American lately, and have had some great crews, but most felt fairly indifferent about this. I guess they’ve gotten beyond anger. If it’s anger, that’s almost easier to deal with. It’s some kind of emotion.

Doug: [Laughs]

Cranky: So how do you reach those people?

Doug: You gotta figure a way to communicate with them. It’s hard of course, because you can’t fly on every airplane. What I can tell you is my experience flying around has been dramatically different than that. It may just be that I’ve had different crews.

Cranky: You’re a different person…

Doug: It may just be I haven’t had the same crews, but the people I’ve flown with have been anything but indifferent, they’ve been over-the-top excited. So that’s great, but it’s also something we have to be cognizant of. Because if we don’t do anything about it, it could be worse than indifference. It could be people were so excited and nothing changed. I worry as much about that as I do about the indifference. But anyway, I haven’t experienced [indifference]. And what that says to me is to the extent we can communicate, that people really are excited and want to be excited. But it gets to the same question, how do you get to 100,000 people?

So Michelle [Mohr, Director of Communications at US Airways, who was in the room] and people like her are really good at this. I can tell you what we do here has been phenomenally successful with Crew News. We go every month like clockwork and we do a pilot and flight attendant session. They’re in training so they have a free hour. You spend 10 minutes talking about the airline and spend 15 minutes taking questions and you film it, so there it is.

Michelle Mohr, Direct or Corp Comm for US Airways: We get 2,000 hits a month.

Doug: Two thousand hits a month at US Airways. It’s a fantastic communication vehicle. We do things like that. It’s not perfect, but it works well. The people who want to know what’s going on can find a way to figure out what’s going on.

And the other thing is it can’t all be me. We have to have a team in place – we have that now at US Airways. The reason we don’t have to have everybody tune into Crew News is because they hear this stuff from their own supervisors and Vice Presidents. We have officers that know a big part of their job is showing up and going to talk to their people. Every week we’re gonna ask them, who’d you talk to this week?

Cranky: And when are we going to see those people [in the new American]? Technically I believe you’re the only employee of the new airline.

Doug: Well, I’m not an employee. I’m an employee of US Airways and not American Airlines.

Cranky: Yeah, but you are the only announced employee, so when are we going to see more officers?

Doug: It’ll be before we close, I know that. And then the question is when before we close. Should we do something sooner than that? One one hand, we say “well yeah, the uncertainty is not good.” So once we know the right answer, we should get on with it. And I think that’s the right answer. What you don’t want to do is rush the decision. I have gone and looked at benchmarks at the other airlines — United/Continental and Delta/Northwest — and it’s about 3 months after the announcement So for us, that would be May 14. Sometime around there would be the earliest.

Cranky: I hear a lot of uncertainty on both sides. On the US Airways side it’s “will I have a job, and oh wait, do I have to go to Dallas?” while on the American side it’s “Is this a takeover”? I know there’s been a lot of discussion about how it’s not that way, but you can understand how on the American side, it’s hard to not to at least see it that way. So I think that’s the benefit [of announcing earlier].

Doug: Yeah, I know. I acknowledge there will be some value in announcing the team, but we won’t do it if we’re not ready.

Cranky: But when it does happen, I assume we’ll see people from both sides as a part of that team.

Doug: Oh yeah, it’ll be a mixture of both sides.

Come back tomorrow for the second part of the interview where we talk about the onboard product features that matter most, what to do in Asia, and more.

Yesterday was what is likely to be the last US Airways media day. Next year, the merger with American will be done, and we’ll all be heading to Dallas/Ft Worth for the first American media day. Since the merger has yet to close, there wasn’t a ton of news to break today, but I did have the chance to sit down and have some really good conversations.

Next week, I’ll have an Across the Aisle interview with US Airways Chairman and CEO Doug Parker. But today, I’m posting my interview with Andrew Nocella, Sr Vice President of Marketing and Planning.

While Andrew doesn’t even know if he’ll have a role in the new combined airline yet, in our talk, we discussed everything from what the new American might look like in LA and New York to what US Airways is going to do about those turboprops that are reaching the end of their useful lives.

Cranky: I’m curious about your views strategically on LA and New York in particular.

Andrew: Our strategy as US Airways is going to be different than our strategy as American Airlines; it has to be. We’re going to be changing in a lot of ways, as has Delta/Northwest and United/Continental, in my opinion. When you look at the business centers that LA and NY are, they’re economic engines for the country and for the airlines that fly there.

For US Airways, we had, I don’t want to say a boutique or niche approach, but I don’t know what the right word would be. We recognize where our strengths were, where we could deliver a great product at an efficient cost and make money and that wasn’t going to be in New York or LA as a US Airways standalone. But as the new American, we think it’s going to have a major presence in New York and LA. It needs to. And that’s where the corporate business is.

The corporate business in New York and LA will determine if we get the corporate accounts in Indianapolis and Chicago and Orlando and all those other cities. So we’re going from US Airways and now we’re gonna be one of four big airlines in the country. And at LAX, all four have a material presence. And in New York, three and JetBlue have a material presence. The dynamics of operating in an environment with that many airlines is different than we’re used to, but American is used to it.

Cranky: So it’s the corporate accounts that are going to drive this. It’s not, “we’re going to fly to Orlando because a lot of people want to go to Orlando from New York.” It’s, “well, we’ve got corporates, and they’re going to pay enough to make the flight work.”

Andrew: Yeah, I mean we’re going out there to compete hard against the new United and new Delta. We’re going to have to offer a product range in term of flight services and scope that allow us to do that and that means having a big presence in New York and LA. I’m so glad we still have the Shuttle and it’s going to mesh very well with American’s long haul opportunity in New York.

Cranky: Do you wish you hadn’t done the slot swap with Delta?

Andrew: I was afraid you were going to ask that question. I have to admit, I do not. The reason I don’t is after the merger closes, we’ll have about 175 flights a day out of LaGuardia. I think that’s a sufficient number to serve New York combined with 100 flights at JFK. We’ll have 300 flights a day out of New York City. The two others guy have close to 500. Five hundred is bigger than 300 but 300 is still a lot. It’s a gigantic presence and we can craft it so it works for the company.

Cranky: How do you see JetBlue fitting into that in New York and Alaska in LA?

Andrew: In the case of Alaska, it’s a really great relationship and American has recently expanded it. We don’t know a lot of the details in terms of the economics but I’m very bullish with what it brings to American. In the case of JetBlue, we haven’t looked at any details to be honest. That’s something we just haven’t gotten to at this point.

Cranky: They seem pretty interested in continuing the relationship.
Andrew: I’ve definitely seen some quotes here and there.

Cranky: In a place like Phoenix, I see it certainly having a place in the airline. It’s the west hub, it’s the option you have. But how do you see it evolving because your costs are higher as American?

Andrew: I think Phoenix, and across the whole airline, we have some cost synergies and some cost dis-synergies and a lot of revenue synergies. As we spread this across the network, we see a positive P&L hit. We think that’s true of Phoenix too. We’re going to use these cost efficiencies and revenue efficiencies to make what we have better. All that being said, Phoenix’s performance has been outstanding over the last 12 months. Highest improving margin hub recently. I think we’ve made a lot of changes and the competitive environment in Phoenix is in a way that the hub is profitable.

Cranky: How do you view the regional market right now? You’re inheriting a lot of 50 seaters. Delta and United have walked away. Is there an opportunity?

Andrew: As an industry and as an airline we’re moving away from them. We just did a deal with Mesa where we took out 9 Chautauqua ERJs and replaced them with CRJ-900s. We’re working on another 4 for 4 swap this summer. My macro view is that the larger the supply of 50-seaters becomes, the lower the pricepoint. So things over time come to an equilibrium because the aircraft are not just going to the desert to sit. That being said, they’ll never be the same numbers as before. And I do think the one complication with my theory is the engine costs. Overhauling the engines is a very expensive situation. Unless we can find a way to do that, those aircraft are in danger of never flying again.

Cranky: How are you going to replace your props?
Andrew: That we don’t know.
Cranky: They’re old.
Andrew: They are old.
Cranky: And there’s nothing there.

Andrew: Every time a manufacturer comes to visit us, I ask for a small and slow prop. I don’t need a large and fast prop because that’s just like a regional jet with props. Nobody seems to want to produce it for a lot of different reasons. So there is no effective replacement at this point.

Cranky: How long can they keep going?
Andrew: I think you’ll see Dash-8s in our fleet through 2017/18/19/20.
Cranky: And you don’t know what’s going to replace them.
Andrew: No. It’s a dilemma for the small communities that we serve.

Cranky: I look at Chicago and I see a lot of nearby cities that American serves that United doesn’t and that seems perfect for a prop.

Andrew: Yeah, even from Miami to the nearby islands which used to be ATRs. They’re now on regional jets. The system is being subopimtized because there isn’t a viable 40 to 50 seat low cost slow turboprop available in the markepltace. It’s a frustration. We’d like to find a solution and we’d like to find a solution for our employees at Piedmont too.

Come back next week when I’ll post my talk with Doug Parker about how he spends his time these days.

Recently, little Island Air of Hawai’i decided that it was time to rebrand. The new logo and marketing effort was meant to support the airline in a new direction, mostly visibly in the form of new ATR aircraft. In general, I think airlines are way too quick to just rebrand as a way to show they’re doing something, so I wanted to talk to Island Air to better understand why this was happening. A couple weeks ago, I spoke with Island Air CEO Lesley Kaneshiro about the airline’s plans.

Cranky: Let’s just start with the rebranding in general. What was the reason for it?

Lesley: For the past several years, if you’ve been following the Hawai’i interisland market, Island Air has stayed under the radar with the fare wars that resulted in Aloha going out of business. We retracted into what we call our niche market: smaller communities in the State of Hawai’i that we service, those being Lanai, Molokai and West Maui. We really didn’t do a whole lot of marketing. We were out there a lot in the media and in front of the communities, but with the transition to the [new] ATR [turboprop aircraft], we see this as an opportunity for a new beginning for the company, something to give the employees something be excited about and proud about. What we put out in the new livery is just the beginning.

Cranky: So it’s a shift in strategy for the airline beyond the small routes to broader Hawai’i?

Lesley: Yes. Eventually we see ourselves connecting more of the islands together. It may be destinations that are not served today as a nonstop route. As enplanements into Hawai’i continue to grow, that will help us determine which markets to enter.

Cranky: You placed this order for the ATRs. Are they coming this month?

Lesley: We have one coming probably early September and it’s coming out of C check right now. It will go into paint next week.

Cranky: How many are you taking?

Lesley: We have 2 ATR 72s coming this year and then the ATR 42s we’re looking at 5 or 6 next year.

Cranky: And how many Dash 8s do you have right now?

Lesley: We have 3 Dash-8s right now and 1 wet lease with a Saab.

Cranky: This is certainly growth. I know you briefly flirted with the Q400, was that a couple years ago?
Lesley: In 2006.
Cranky: It was that long ago now?
Lesley: Yeah, time flies.

Cranky: So what is it now with the ATR 72 that it looks better than when the Q400 was introduced?

Lesley: Good question. What we’ve seen over the years, we see a lot more of the larger carriers coming inbound into Hawai’i. So for example, Allegiant, which is a new entrant into Hawai’i, just announced Spokane and Boise. These are secondary markets that did not have service to Hawai’i previously. We know that Southwest is working on certification to come into Hawai’i. And in the Asian market, there are a lot of Asian airlines like Korean Air, China Air that are adding flights into Hawai’i and with the restrictions on visas being lifted for Koreans and Chinese, we expect that we’ll see more visitors from those countries traveling to Hawai’i and through Hawai’i for vacation.

We’ve been also actively working on obtaining additional codeshare agreements with other carriers. We’ve been in discussions with half a dozen right now. We’re a small carrier and somebody in China or the East Coast, they’ve never traveled to Hawai’i. They may not know who Island Air is. They want to go to Hawai’i but they don’t know how to get there. And if they go to United’s website, they can see how to get their with our codeshare. Those codeshares are important.

Cranky: What percentage of your traffic comes from people connecting versus just local demand?

Lesley: It’s about 60 percent local and 40 percent visitor. But the local, I can’t really tell if they’re traveling for business or vacation.

Cranky: So with the ATRs coming, what’s the first route?

Lesley: The ATR is going to cover an existing aircraft that’s going out for heavy maintenance so we’re not really adding new flights. It’s going to pick up some of Maui to Lihue nonstop. We’ll try to use it in existing flights but looking out where there’s more opportunity to pick up additional passengers. Because some of the markets, if it’s small, the market doesn’t have the demand for the ATR 72.

Cranky: Can you talk about why you decided to go with the ATR versus something else?

Lesley: We have some unusual runway restrictions in Hawai’i. Kapalua airport is a short runway, 3,000 feet, and that requires the aircraft to be able to land and takeoff with that short runway restriction. The Dash 8 gets in an out pretty easily. The Saab cannot because it’s too heavy. Based upon the restrictions, that’s what we look for – the aircraft that best meets those requirements. The ATR 72 will not be able to land in Kapalua but the ATR 42 will be able to. We will probably take a weight penalty depending upon several factors.

Cranky: The ATR is the only real option? I guess, are the Dash 8s getting too old?

Lesley: Because the Dash 8s aren’t in production anymore, the smaller aircraft when you get to the 37, and the ATR 42 will have 46 seats, [size category], there’s limited inventory. The Dash, we’ve been looking for aircraft for the last two years when we saw we could start to take on more. They just weren’t available at a reasonable price that we thought was realistic to make money. Because we weren’t able to solidify more aircraft, we decided to look outside to find what aircraft meet the needs.

Cranky: You said these are coming out of C check so these are used aircraft?
Lesley: Yes, the 72 is a -212.

Cranky: Where are they coming from?
Lesley: These two were operated by American Eagle
Cranky: And the ATR 42s?
Lesley: I don’t know yet.

Cranky: Your partner Hawaiian has recently said it would get smaller aircraft of its own and presumably start to compete with you. How do you plan to be able to compete with them?

Lesley: We’ve been in active discussion about the codeshare agreement and looking to see how we can work together to expand the agreement as recent as last week. Their media release really was very vague – they said turboprops but they gave no indication as to the timeline. We would and have always been a rational partner with Hawaiian. We want to work with them versus work against them and we have communicated that to them more than several times…. If they choose to treat us as a competitor, you know Aloha and Hawaiian coexisted in the market for many years and still maintained a rational competition there.

Cranky: Does a lot of your trafifc come from Hawaiian today?

Lesley: We have two codeshare partners, and they are not our largest. They give us a significant amount of revenue but they aren’t our largest partner.

Cranky: But it is a threat if they decide to start competing with you so you have to be ready for that.

Lesley: Yes

Cranky: In 5 years, do you have a vision of how Island Air will look?

Lesley: Our business plan is not to be the biggest. It’s to operate within the state of Hawai’i, provide alternatives for travel for the communities here in Hawai’i and for visitors. We’d like to get more codeshare partners, to put Island Air out there more. That’s going to be important for us. We plan to grow, take a little bit more market share than we have today with 4 aircraft. We want to be profitable but offer a safe alternative with good frequency to the destinations people want to travel to.

Cranky: Do you have any interest in smaller aircraft or leave that to the Mokuleles and Pacific Wings of the world?

Lesley: We’ve looked at those options. For right now we’d like to focus on the ATR, the 72 and the 42 will give us two different sized aircraft…. On a 9-seat Caravan, if you look at most of the other operations, they’re non-union. If I put my union costs into a template, I’m not certain fiscally that would be a good decision. But we’ve looked at it and we haven’t discounted it. For now we’d like to concentrate on the ATRs and transition out of the Dashes. It’s a big project to do all at the same time.

And we’re back with Spirit’s Chief Marketing Officer, Barry Biffle. Yesterday we dug in on the new routes out of Chicago and Vegas. Today, it’s time to talk fees. Many of you love to hate fees, but as long as they’re properly disclosed, then I see no problem at all with this kind of model. Here’s what Barry has to say. See a few of my comments at the end as well.

Cranky: Now what about Vegas? People have long thought of Southwest as the low fare airline, and you’re coming into Vegas-West markets where Southwest has long ruled the roost. But you think that Southwest’s fares have risen to the point where there’s room for a lower fare operator?

Barry: Well, we added LA last month. You’ve still got Delta, US Airways, American, and United. There are plenty of high cost guys. But we do have lower costs than Southwest. We also offer a different product. Southwest would actually go out and tell you that everything is free. They tell you bags are free, but what they really ought to say is that you’re subsidizing people who want to check bags. It’s like when you go out to dinner with friends and someone orders a really expensive bottle of wine. When you split the bill, you’re paying for it whether you drank the wine or not.

In 2006 our total revenue per passenger was $109. We actually had less than $5 in non-ticket revenue. In 2010, our average total prce including options was $112. It was only up $3 but our non-ticket revenue was $35. We don’t nickel and dime. What we’ve done is allowed people options. Most people are figuring out that we’re a much more consumer-friendly model. But we also cater to a different clientele. If you’re the guy who always orders that wine, you like the Southwest model.

Cranky: Let’s talk about one of the more controversial moves. You’ve started charging for people to bring carry-on bags.

Barry: We were averaging 17 gate-checked bags per departure at LaGuardia. The reason is because airlines lie to you, not Spirit, well, they don’t really lie but they’re allowing you two bags when there isn’t enough space above all the seats for everybody to jam a bag up there. If it’s a full flight, there’s a backup, nowhere to put the bag so its gets checked. It delays the flight and the customer gets mad. Will it be checked to my connection? Wait, I’ve got to get my medicine out. We don’t have those issues anymore. We’ve ended up with a better customer experience. Our total turn is down by 7 minutes because I’m not gate checking bags. Are we evil or are we actually the best option for consumers?

Cranky: Some people think that you’re being sneaky and trying to hide fees from them.

Barry: I want you to know what’s optional and what’s not and what’s included and what’s not. Part of the challenge is that there are so many requirements for disclosing this or that (not just in the airlines) and so people don’t pay attention. I don’t want to deceive anybody. I want people to feel good about the purchase that they bought. We just think the airline industry operated forever in a manner that didn’t give options. If you go way back, we assumed everyone wanted a meal.

At the end of the day, if you take a Haitian who lives in South Florida and they immigrated here 10 years ago and they’re living the American Dream and they want to go see their mother back in Haiti, who am I to say they need bags or they need a TV or they need food? We believe it’s our job to get them the cheapest possible way to go see their mother because otherwise they might not be able to afford it.

Cranky: But disclosure is a lot tougher for sales that aren’t through Spirit directly. And you do sell through third parties.

Barry: I think there’s frustration with the third parties. If they sell the ticket they should be obligated to tell our policies. How many times have you gone to Expedia and then you get to the hotel and there’s a $15 a day resort fee and it’s mandatory. Wait, so this is required of me and you didn’t tell me this? But they should have just said it.

There is an issue with people who haven’t flown us and bought us through a third party. The third party causes the most challenge. We like that distribution partner, but we’re not in all of them. We’re comfortable with the partners we have and we see value in it. We’re just trying to isolate the specific issue you mention. We’re not going to go to them with a big mandate, but at some point we’re going to have to figure out a way for them to disclose better and better present the options to the customer.

But the third party is a separate issue. When we changed our model in 2007 in a big way, there were people who had flown Spirit before who were not familiar with the new model. I’m not aware of a complaint we’ve ever got from Haiti, but routes that we had flown before, there was a higher propensity. There definitely was a conditioning of previous customers on previous routes. Last year was a good example. When we announced carry-on fees, we had these huge banners, maybe we went overboard. If I’m going to carry 700,000 people a month, if I get 99 percent, if 1 percent of people don’t know, that’s still a large number of people. I don’t know how we get every last person conditioned, but I’m committed to trying to get there.

Cranky: You talk about places like Haiti, but those are markets where people usually do bring a lot of bags when they go back to their families. There hasn’t been any backlash?

Barry: What we normally do to illustrate it to people is explain that your fares are going to drop so much that you can afford to go back and forth. Before you were paying $700 and you wanted to make that trip count, so you would take a gazillion things back with you. But now they don’t need to bring as much stuff. We see checked bags drop the longer we’ve been in a market.

And that was the end of the interview. I tend to agree with just about everything Spirit says, but there are a couple practices that I don’t like. First, Spirit charges an $8 passenger usage fee each way. This applies to everyone unless you buy at the ticket counter, so that’s how they get around it being considered optional. I’m fine with that, but I want a disclaimer that shows me that I can save $8 each way if I go to the airport. It’s not very clear.

The second issue is with opt-in versus opt-out. As Barry mentions, people do get overwhelmed with disclosures and end up missing things. So when, for example, travel insurance is already pre-checked for me and I have to opt out, that’s a little tricky in my mind. How many people fail to uncheck it even if they don’t want it? Of course, this will be going away with the recent DOT regulation change, so it won’t be an issue for much longer.

Other than, I like what Spirit does. I have no clue if they can make big city markets work, but hey, they think they can and the results have been promising in those cities with the trial balloons they’ve sent up so far.