US Airways likes changes caused by oil tabs
September 18th, 2008, 4:57 pm · 1 Comment · posted by Donna Hogan
Oil prices that plunged $50 in the last two weeks after spiking to nearly $150 per barrel will mean a $1.7 billion boost to the bottom line of Tempe-based US Airways if prices hold steady for the next year, airline president Scott Kirby told Wall Street analysts Thursday.
But it doesn’t mean the carrier will add back flights it has scratched, Kirby said. Or that US Airways will stop charging for Cokes and checked bags, he said.
Kirby was speaking at the Calyon Securities U.S. Airline Conference Thursday.
Major U.S. carriers all have announced plans to cut capacity this year and next in hopes of returning to profitablility after soaring oil prices obliterated profits — and then some.
US Airways plans to ditch 6 percent to 8 percent of its flights in fourth quarter, 8 percent to 10 percent in 2009.
The sudden and recent oil price plunge has been a remarkable turnabout, Kirby said. But the company has already gotten rid of planes and cut jobs to downsize flight schedules, and reversing that would take 18 to 24 months, Kirby said.
A la carte pricing has reaped unexpected benefits, he said. Charging for previously free amenities like sodas and sandwiches has made in-flight cabin service “calmer and more efficient” and eliminated logjams in the aisles, he said.
And the airline has checked about 10 percent fewer bags since it added fees for that, which also improved efficiency, Kirby said.
Separating bags and passengers and reuniting them at their destination, is “one of the most complex things we do as an airline,” Kirby said. So fewer checked bags means fewer problems, a smoother operation and better on-time performance, he said.
Kirby said the company plans to use money saved from oil price cuts and a la carte pricing to pay down debt.
September 22nd, 2008 at 8:26 pm
Anyone wanna bet USAIRWAYS is gone in 2 years? No business can succeed if their President shows such contempt for the customers. Their planes are ancient, their service is surly, they charge for every little extra, and they consider a non-center seat “extra.”
I fly Southwest a lot more now. They are generally cheaper, and I get to my destination less exhausted. I used to Chairman’s Club Platinum on HP and Usairways…..but now I avoid them at all costs.