Surprised? US Airways Is Doing Things Right

American, Distribution, Fares, United, US Airways

Something tells me I’m going to get a lot of flack for this post. I know there are plenty of people out there who think that US Airways is more evil than just about anything else on Earth, but I really think they’re doing a great job. You still with me? Before you faint or throw your keyboard into your monitor in anger, let me explain.

I know I’ve talked about this many times before. This isn’t your father’s US Airways (or USAir, or Allegheny, or . . . .) This is America West with a much bigger route structure and a strategy that they’re executing on quite well. As a refresher, here is the airline’s strategy as explained to us at this year’s Media Day.
08_03_03 usmediaday
First, let’s remember that I’m primarily talking about domestic flying here. So, schedule and price matter most as long as they are reliable, convenient, and have a respectable appearance. It sounds good to me, but then again, I’m not an old-school US Airways loyalist. If you go over to the US Airways board on FlyerTalk, you’d think that every reduction in benefits from previous levels is like a dagger being stuck in every frequent flier’s heart. But it’s not. It’s just different from what they’re used to. And yes, that’s going to alienate some people, but that’s the decision they’ve consciously made for the good of their business. (I mean come on; when was the old US Airways considered a model airline?!?)

What’s most important here is whether or not they can actually deliver on their simple strategy. So can they? Let’s start with reliability since that’s probably most important. On that front, they’re performing quite well, actually. Kudos are due to COO Robert Isom for bringing the airline back from the operational brink. Now that June DOT numbers are out, we know that the airline has been at the top of the charts for on-time performance for all of this year. Check out June in Philly. A chronically-delayed airport during the summer? Yeah, but US Airways still walked away with a 76.5% on time rate.

How about baggage? That was always the downfall of Philly in the past, but now they’re finishing in the middle of the pack throughout the system. June saw a rate of 4.65 bags lost per thousand passengers. That was good enough for 9th place (out of 19) but more importantly it was less than half last year’s abysmal 10.59. By the way, they’re also in 9th place for the full first half of the year, so this isn’t a one month anomaly.

So reliability is good. 08_08_12 usairwaysnotsobadAs for convenience, well, I don’t see them as being any better or worse than other airlines except that they do have a functional mobile site, something some airlines have yet to figure out. If they really want to become more convenient, they need to let me pay for these fees on the website at the time of booking. Then I’d be much happier. And appearance? Well, my understanding is that they’re sprucing up interiors on most of their planes. (They need it on some of those.)

Looking at this independently, you’d think US Airways would actually be a pretty good airline to fly, right? Then why does everyone seem to pile on the airline so much? Like I said, it’s because things are different now, and people don’t like change. This is why they never should have kept that name. That airline died during its second consecutive bankruptcy a couple years back.

Let’s look at this whole “charging for drinks” thing that has the nation in an uproar. Yes, they charge for drinks, but who says drinks should be included in your base fare? It’s just what you’re used to, and there’s nothing that says every airline should include drinks in your fare. US Airways is being up front about these things (except for that horribly shady booking fee on which still bothers me, if it’s still around). In general, they aren’t promising much and they’re delivering.

Let’s look at it another way. United and American like to act like they’re full service airlines, but they charge most of the same fees as US Airways does. On top of that, neither of those airlines got their planes to land on time more than 60% of the time in June. That’s a far bigger problem.

This doesn’t mean flying a fee-filled US Airways is for everyone. If you don’t like the fees, you can fly Southwest and, um, well, that’s about it these days. But if you don’t like paying for drinks, there are plenty of options. But for a lot of people, the lowest fare is what matters, and if US Airways has it, they’ll probably fly them. It’s not a strategy for every airline, and I’d certainly agree that this race to the fee-world opens up more opportunities for an all-inclusive experience at the other end, but it’s definitely a valid strategy that can work for the airline.

The bottom line is that as long as they keep running a solid operation, they’re going to remain a viable option for most domestic travelers. And if they keep beating the likes of United and American in on-time performance by 15 points, they’re going to become a preferred option, regardless of what fees they charge.

Edited 8/12 @ 1129a: For those who are new to the blog, I want to disclose that I worked at America West from 1997-2002 under the same management team that runs US Airways today. Robert Isom was my VP briefly at one point. I don’t believe this colors my view (I mean, I haven’t worked there in 6 years), but I wanted to make sure it was disclosed. If you’d like to see everywhere I’ve worked, you can always look at the about page.

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41 comments on “Surprised? US Airways Is Doing Things Right

  1. I think is is disengenuous to say if you don’t like the fees fly Southwest. People seem to choose to forget there are great airlines out there that, while they charge you to change a ticket, are not piling on the fees. Alaska Airlines, Hawaiian, etc. I haven’t flown Southwest and I don’t intend to. I don’t want to be treated like cattle when boarding the plane when I can get the same flight for a couple extra dollars and get treated just as nicely on Alaska or Hawaiian.

  2. As much as I don’t like to pay fees, I think you are dead on that a delayed flight is going to make a much worse impression on a traveler than having to pay $2 for a drink. I’d even argue that reliability is more important than FF benefits so I think their focus is in the right place.

  3. Jason H – I have to disagree. Let’s look at Alaska and Hawaiian.

    *$15 phone reservations fee
    *$25 2nd checked bag fee
    *$10 inflight entertainment rental
    *$5 for food
    *$25 frequent flier fee for redemption on partner airline

    *$10-25 phone reservations fee
    *$15 1st checked bag fee
    *$17-25 2nd checked bag fee

    This was just from a quick look, so I probably missed some. Besides, Hawaiian’s reach is very limited so that’s not a realistic option for most people.

    I’m not saying that some airlines don’t have fewer fees than others, but everyone except Southwest has been adding fees lately. Even Southwest added a fee for the 3rd checked bag, but that was something every other airline already charged for.

    And yes, I know that Southwest doesn’t offer inflight entertainment or meals at all so it’s not an apples to apples comparison. But the point is that if you don’t like fees, there really aren’t any good options for you outside of Southwest.

  4. It seems to me that US’s problem is it wants to be Southwest (or, perhaps, it wants to be America West again), but it’s stuck with the fleet, personnel, routing and fee structure of a legacy airline, and that’s the challenge they will have to muddle through to get to where they want to go. I flew America West back in the day, and they were fine for an LCC. If US could be that again, that would be fine (as opposed to a struggling carrier trying to be UA).

    I do wonder how US’s international service is going to do when it’s crossed with an LCC. My guess is it eventually goes the way of the dodo, as does US’s Star Alliance membership (the fact that CO is in *A and LH is investing in JetBlue seems a harbinger of an eventual drop).

  5. Jason,

    I really don’t understand how getting to pick your own seat is such a bad thing on SWA. Don’t like the family with the screaming baby that just sat down behind you fine get up and go to the back of the plane. Want a window, bulkhead, emergency exit or other wise ‘premium’ seat check in 24hrs in advance. Now granted I don’t spend a lot of time on other carriers but every time I do it reminds me how much more SWA has their stuff together. Their flight crews have fun and seem to enjoy their jobs more than any other airline. Where else do you see the flight crew singing to you or telling you (albeit corny) jokes. I feel like I get treated more like a human on SWA then any time I’ve flown another airline. I shouldn’t have to pay for premium cabin space to get treated with respect.

  6. Actually, quite often I GET Alaska at the same price as Southwest, not “for a few dollars more”. This is because Southwest pretty much sets the prices on the routes they fly in competition with Alaska (SEA/PDX-CA-PHX-LAS-DEN).

    Cranky’s point is well taken, though- unless you have elite status on Alaska (or some other airline), coach is pretty much coach, and Southwest’s coach arguably is better than other airlines in the lack of fees to be dinged on, on-time performance of the airline, frequencies across the US and so on. The ones I would differentiate from Southwest are actually Jet Blue and Virgin America- and that’s just because they have shiny IFE and more modern features that appeal to a generation that’s grown up with the Internet.

  7. CF,
    It’s not the ‘little’ things about USAirways that bother me – it’s the poor customer service on the phone, the $100 fee to return FF points to your account when canceling a ticket, and the rude check-in and gate agents that bother me. When you add nickel and diming fees to the above, I can’t champion their come back.

    Not that I’m a fan of AA or United either…I’m just trying not to fly unless it’s critical or business is paying for my ticket. BYW, wouldn’t mind paying for drinks if there was an alternative – but except for filling an empty water bottle at a luke warm fountain in the airport or buying even more expensive drinks after TSA check-in, we’re captive to $2/bottle water onboard. Not a pretty picture and hard to swallow praise for minor changes. Reminds me of friends who are excited when gas prices drop to $3.80/gallon!!

  8. spengle – I understand about the little things, but I tend to think some of those are generalizations. I mean – it’s not every gate agent that’s rude. Every airline has that problem, some far more than others. And that is something that needs to be addressed, but ultimately you only have to deal with a gate agent when things go wrong these days. Things have a better chance of not going wrong on US Airways now that the airline is running a better operation. If they want to be a low customer service airline, that’s their choice.

    My point here isn’t that everyone should want to fly them, because everyone has different wants and needs. My only point is that they are running a solid airline and the value proposition is clear. If that is appealing to you, then you would probably be happy flying US Airways right now.

  9. I don’t get people still referring to WN’s boarding as a “cattle call.” They haven’t boarded like cattle in quite a while. Now you’re assigned a boarding group (A/B/C) and a number with a designated place in line at the gate. How is this any different than boarding in a Zone like DL, UA, US, etc? I don’t fly WN very often, but I certainly don’t avoid them because of their boarding process.

    The last time I flew B6 it felt more like a cattle call. They just opened the door and said have at it…130 people trying to cram on all at once.

  10. Spengle,

    I think the point CF is trying to make is…US is clearly stating what they do and then delivering on it. Say what you do, and do what you say. He’s not saying their product is the best, but it’s certainly what they’ve said it will be.

    CO is another one good at this. They clearly state what their product is and they consistently deliver on it. Very few surprises.

    The other majors could all take notes from US and CO in that respect.

  11. US Airways has certainly had an impressive turnaround in terms of on-time performance. I never really expected it, and the airline really deserves credit for it.

    I found it interesting how WN and US had the same on time ratings for June. (Random I know.)

    But there are still a few issues for me. The DOT report on June has US Airways almost last in terms of customer complaints – the only airline to do worse is United. While US Airways’ June 2008 number is better than the June 2007 number, there still needs to be some work in that area I think.

    I will certainly consider flying US in the future but I will have to comparison shop though. For example, if Continental gives me a lower fare there’s a good chance I would go with them as I would have a free first bag and get the included drink. (Though I may not want to deal with EWR.)

    On a side note, I think it would be really cool if sites like InsideTrip and Kayak would allow you to select how many checked bags you were planning to bring and have that built-in to the fare? I’m sure the airlines wouldn’t be too pleased though.

  12. Dan – I think the customer complaints are exactly what I’m trying to address here. People are beating up US Airways because they don’t like the fees so they’re still complaining a lot. Also, there’s probably a hangover from past operational problems and reputation that makes people more likely to pull the trigger on a complaint than they might be with another airline. Still, the number needs to improve, and it looks like that has started.

    What you say about comparison shopping is absolutely right. Who wouldn’t fly CO if the price and schedule are better? That’s exactly what US is saying. If they have the right price and schedule, people will fly them.

  13. I totally get your point after reading your comment. I guess one could say I’m a tad biased after some friends and family had some bad US experience which I’m sure are isolated in the grand scheme of things.

    Sadly US doesn’t seem to have the price nor schedule for me in some markets. I’m not sure what other passengers will say, but at least for my home airport we’re essentially a US East station sans PIT flights.

  14. WN over US for me. The WN interiors are much nicer and seats more comfortable, and a beverage and snack served with a smile.

  15. Southwest, ontime? I think not!!! I’ve traveled slowest many times and their on time is a farce!! (lie, lie, drop from the sky) They must have someone at the DOT on payroll. Just like they give themselves awards for no reason except PR!! Masters of PR.

  16. So this coming weekend I’ll fly US one-way from SFO to PHX, and my return trip is on UniTED. Both airlines offered comparable fares, but US’ departure time was more convenient for me, so I (a UA 1K) picked them. It’s going to be my fifth leg on US, and while they are certainly not amazing, I don’t see a significant difference (other than E+) with UA and other domestic carriers. While there is a lot of good advice available on Flyertalk, I sometimes feel that some people are a little bit extreme in their likes and dislikes of certain carriers.

  17. I have a question for everyone. Not counting fares or fees, when you complain about US Air on service and it’s employees, whom exactly are you complaining about? The western part of the USA which is mostly American West and former PSA employees or the eastern part of the country which is mostly “old” US Air employees? Seems that would make a big difference since in the east there would be a lot of old time workers from all the past airlines that became US Air, and the not as many old time employees in the west that became American West.

    From working at an airline myself years ago, I can tell you the longer an employee worked for the airline the more they hated the company and did the basic job and not one extra thing. Newer employees were younger and had a better attitude and did their best to help the passenger.

    People seem to judge the ‘whole’ by the performence of the ‘one’. If one employee out of thousands did not please you, is it right to judge the whole company badly because of that one person?

  18. I’ve been planning trip across the Atlantic for a few months and US always comes up the cheapest and the best routing for me. However, I am reluctant to choose them as I just know that long haul it is going to be miserable. A focus on price and performance are more important for domestic but long haul other factors come into play and I just don’t have the confidence to book with them. So whilst I agree with their domestic strategy I think that on a long haul flight, things like a decent meal, a drink (I would be willing to pre-order and pay in advance for these things rather than fumble for change onboard) comfortable, clean seat and an inflight movie are very important. I think I will be choosing BA.

  19. I’ll admit that I don’t fly US too often, especially now that work doesn’t take me to PHX all that often. But, my experiences with them weren’t much different from NW and AA, the two carries I fly most often…and would say US was more pleasant than DL and UA have been on my most recent trips.

    So far as I’m concerned, domestic flying in coach on any airline is “low cost carrier” treatment. Everyone is understaffed with surly rebooking agents, etc. For a business traveler that hasn’t checked a bag in years the fees haven’t really stung me yet. And after a long day of meetings, an adult beverage on the red eye home has always cost money, something I’m already used to.

    Yeah, some guys have fancy IFE systems, but that still doesn’t make up for the service I remember from 20+ years ago. I remember always flying on a large and roomy DC10 or L1011 if traveling between major hubs. Never ever getting crammed into regional jets. Always getting a meal, which although not always great, was something. All airlines had ample staff, who processed the passengers faster than electronic kiosks do today, etc. etc. Just a better time for flying domestically, bar none.

  20. What people tend to forget is that USAirways is a transportation company. They are not a restaraunt, a deli, a movie theater, or a bar.

    What the airline is doing is moving back to their core business. The only thing that matters is moving people SAFELY and efficiently from point A to point B, then back to point A. Everything else is secondary.

    Over and over again, the public has made it clear that the ONLY thing that matters is price. The web has made it very easy to price compare different airlines for the same destination and no one compares service levels or amenities when booking a ticket. With current ticket prices airlines are not able to make a profit.

    USAirways is not a public service. They are a for-profit corporation. The employees of the airline made significant sacrifices during the first two bankruptcies and can give no more to subsidize lower ticket prices. (For example, every pilot who works in the east lost a 1 million dollar pension during the second bankruptcy.) The airline has a commitment to the shareholders to make a profit, and they are using a viable strategy of “if you want it, you have to pay for it.” After all if you order a bottle of water at a movie theater, you need to pay for it. It is not included in the ticket price for the movie. It is the same with the airline. What the ticket price covers now, is simple transportation, from point A, to B, then back to A. Everything else is extra.

    I would be surprised if other carriers do not follow suit. Free beverages are going to be part of the good old days, back when planes were flying half full, with lots of leg room, friendly stewardesses who were young and happy, a round trip ticket to the west coast was $2,500……………and the airlines costs for fuel were 5% of what it is today.

    Its time to realize that a paradigm shift is underway or just stay home.

  21. Greg – I’m happy to have people who disagree with me here. What exactly do you think is so “pathetic” about them? Please elaborate so we can discuss it more.

    Daren S – If you’re comparing to BA, then yeah, that’s probably a nicer option. But US actually has a pretty decent product across the Atlantic if you’re on an A330. (You don’t want to be in coach on a 767.) The A330 has a full audio/video on demand system to keep you busy, so I don’t know that I’d be too afraid of it here. Then again, I haven’t flown them internationally so it’s all just speculation on my part.

    Rick – I agree with much of what you say, but I’d like to clear up one thing. US Airways pilots did not lose their entire pensions in the last bankruptcy. The plan was taken over by the PBGC and while they did see reductions in payout at the top end, they in no way lost them completely.

  22. Cranky, a story about how much the airline employees really lost in bankruptcy (through salary cuts or pension kills/hand-overs to PBGC) would be interesting. You often see it mentioned in stories about the industry or talked about online, but I have not really seen a detailed analysis.

  23. Daren S – US Airways doesn’t charge for meals on Trans-Atlantic flights. And I’ve done Trans-Atlantic coach on the 767 and it wasn’t bad at all. The interiors have been redone, and while it doesn’t have in seat video of the A330 (which I haven’t been on), neither did the Delta L1011s on my previous Trans-Atlantic trips.

  24. CF
    I hate to break it to you, but I work for USAirways. And yes, the pilots lost a 1 million dollar cash settlement. And yes, they get a minimal payment by the PBGC, however, it in no way makes up for the million dollar loss.
    The maximum payment yearly from the PBGC is less than the yearly interest from the million dollar payout. I am NOT a pilot, and I effectively lost 44% of my income between the two bankruptcies.

  25. Rick – My point was that US Airways pilots did not lose all of their pensions. Here’s an article saying that “a retiring captain with 30 years of service can expect to accumulate a total of $1 million from all sources after the airline sets up its new defined contribution plan.”

    Of course, that was an old article, so I don’t know how that one turned out in the end. I do know that at the age of 65, annual payouts top out at around $45k. Some pilots could easily have been double or potentially triple that at the very top end, but it’s not like all of their retirement disappeared completely.

    If you have some more reading on this, please send it along.

  26. They are doing things right.

    Too bad the east whiners and union goons don’t get it.

    It is not 20 years ago, and the old USAir is gone, get over it.

    The HP pilots did get screwed over though.

  27. All right, Cranky, maybe you have a point. Let me ask this, though: How many people aspire to fly US in a premium cabin if they have to pay for it, even at a discount. Perhaps, US is happy to use the premium cabins only as free rewards and sell an occasional premium seat to someone who buys on schedule convenience. I have paid to fly United domestic
    First and felt a lot better about the experience than when I paid to fly US domestic First.

  28. jonathan – I think US is probably pretty happy with using F as an upgrade tool. That’s really all it was for America West back in the day. Although, if it isn’t being used for upgrades, they do have strong success selling upgrades at the gate to those in coach.

    I would love to see how many F tickets they sell, because I bet your right. There aren’t very many.

    That being said, I’m surprised to hear you’ve paid to fly UA F. I mean, if you’re flying p.s., then maybe. Even a 757 is a pretty good product, but I couldn’t imagine paying for F on any of their other narrowbodies.

  29. I think Piedmont used F as a place to warehouse their frequent fliers when they finally got around to installing F in their entire fleet, not just the 727s that flew between CLT and SFO/LAX.

    Since I’m now living within walking distance of DCA, I expect to do more flying from there instead of IAD or BWI, and will probably end up on more US flights than I have in the past. I hope their product in the east and their personnel stabilize so that I can actually choose a carrier based on actual performance instead of “giving them a try.”

  30. UA’s domestic F to Hawaii was fairly attractive for a couple when UA still had Ameniti which let you buy 2 seats for the price of one and allowed last minute changes w/o charge since the 2 for 1 deal was full price F. True, seat pitch in F to Hawaii isn’t much better than E+ but the extra width is very nice. And UA did put on some nice meals in domestic F to Hawaii.

  31. Hey Cranky you’re the voice of reason. The US bashing is pretty pathetic in my opinion. FFOCUS, which claims to want US Airways to be succesful does not even mention positive. On Time leader for the first half of 2008 I Their mechanics won quality awards The FAA cited ATC control planning practices as one of the best. I may be have to pay for beverages, but I know my plane won’t crash and I will get there on time. However I am not sure this hybrid strategy is working on much broader scale Wh They want to be America West, but are stuck with the calf iced culture of legacy carrier. Of Customers also need adjust their expectations. Be like the Borg on Star Trek and adapt Reduce consumptions if you must. The good old days are over. Airlines are under no obligation to provide any ancillary services.

  32. Cranky,
    I disagree with you Even if they had the kept America West, they still had to take on past sins.

  33. Come on, Dude, they are pissin off a lot of people due to a lot of reasons. Mine is that I volunteered for a “bump” and was told I would get a certificate for a RT flight anywhere in the US. Turns out I got what is essentially a frequent flyer coupon worth 25,000 “dividend miles” and it turns out to be virtually worthless even trying to book a flight as far out as May. BTW, I have tried all day to get hold of someone in customer relations but the line is so overloaded that you can’t reach someone on the phone. Also, BTW, the damned coupon has an expiration date on it and they will not extend it. Is that any way to treat your customers?

  34. Well, you should have looked at the coupon. If the phone was busy you have tried again or written a letter. The point was that compared to last years ops disaster They are doing better.

  35. Yeah, I know someone who works for US Air, he hates the AmWest because they took the name and are using same strategy as the former AmWest. I can understand that the US People, it was a schocking change especially moving the HQ out west. I was thinking he should used to the change because tUS Air went through so many mergers. He worked . I agree with Cranky alot of this emotional not rational. It is What I call people trying to promote tastes and prefrences as fact. Look at the ops stats, look what even the harshest critics such as Philadephia Inquirer are saying. Perception has not caught with reality and that is where Parker and Co. can do a better job such as in marketing and external commuincations. They’ve done hard job by intergrating the best of the two when a forced assimilation would have been easier. Parker learned from the past management’s mistakes, but was not quick to admit his own. Another huge perceptual blunder. I call this merger the greatest experiment since the formation of the United States. No one has tried to merger a younger and older company. This without precedent. Therefore, I forgive him if makes mistakes. The fact he has proven himself. I always say be true not new.
    The bottom line is that one company cannot please everyone. When customer start dictating a company’s strategy than it is in trouble because is not focused.The company has use it strategy to determine which customers it will go after and work hard to retain those who are the most profitable for them( On that point I agree with the critics, if they tick their FFers, they are losing their most profitable customers.) THis is crucial in any high competitve low margin industry. US has to create a clearer value proposition and hopefully with Andrew Nocella as the new chief marketer, they can. Yeah they’ve improved, but what makes them different. Their strategy is baseline. and CO and WN have done better job in their respective categories. Nocella has worked with the old US and has some of that organizational memory and know what those customers are looking for. US is fine for me, but they will have define themselves better for more finicky fliers.

  36. Well Cranky Flier, wonder if you can do the analysis of flying mainline (which US should be doing) vs RJ clunkers flying (which US should do away with money losing RJs anyways). BTW, I prefer turboprops, which ARE STILL the bread and butter routes (LONG BEFORE THOSE RJ CLUNKERS). Would love to see everyone output on this!

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