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The Concession Stand

The Midway

The American Way: Pissed. Off.

Thu May 22, 2008 at 09:30:26 AM

American Airlines' decision to charge $15 per checked bag gets a rave review this morning from Claes G. Fornell, a professor of business administration at the University of Michigan: “Seems really, dare I say it, stupid.” Also noted in there: American does not plan to offer refunds if suitcases do not arrive with the plane. Flight attendants -- who, earlier this month, demanded the resignation of the entire AMR board, including big-bonus bossman Gerard Arpey -- look forward to closing overhead bins.

And, in case you missed it, American pilots yesterday issued their own statement concerning the state of the Fort Worth-based carrier, which'll be just a wee bit smaller come fall as it trims 11 to 12 percent of its domestic capacity. Notes captain Lloyd Hill in the Allied Pilots Association's media release: “American Airlines management is failing its customers, its shareholders and its employees. This dismal performance is not sustainable.” Don't mince words, captain, how do you really feel? --Robert Wilonsky

27 Comments:

WM says:

seems strange that AA continues to institute policies that scare away customers... I would think they would want to increase business, but hey what do i know...

non-frequent flyer says:

You meant overhead "bins" right? This new policy will cause more problems than realized because everyone will try to pass off their two, oversized bags as carry-on luggage. Boarding and de-boarding will take longer, thus further damaging American's dismal on-time departure record and giving us yet another reason to hate AA. Won't this also hurt the luggage handlers, who will have less to do and probably be laid off?

Chris says:

this is stupid. I agree with the musers, raise the price on the ticket by $20. I would rather pay a higher flat fee than have to deal with this crap.

Spamboy says:

It's all our fault anyway. If we weren't alive and scattered across the U.S., the stoopid airlines wouldn't need to fly us around.

dave says:

You know what would do wonders for American and it wouldn't cost them a dime? Ask their employees to mix in a smile every once in awhile.

Surly is fun, too. I'm not saying they have to completely give it up. Just toss in a grin and fake some concern every so often.

Heywood U. Buzzoff says:

The next step is to replace the seats with hay so they can really treat us like the cattle they think we are.

Defeat Plaza says:

Question: anyone know if the overweight charges still apply for checked bags on AA?

If they were to roll back those charges (yes, I know: riiiiiight.), then it might actually be a windfall for my wife and I, who overstuff our crap into our checked baggage and often have to shell out 50-75 bucks for heavy checked luggage.

Randy says:

As a frequent AA business traveller, I'd like to see them raise ticket prices in a big way rather than make travel more of a hassle. I can't see how they make money flying me round trip to places like NYC and Miami for just over $200. Hell, double the price to $400 and then maybe I wouldn't have to deal with so many annoying children and inexperienced travellers who don't understand how to get through security. I haven't been on a plane that wasn't packed full in months. If everyone tries to carry their luggage on, it's going to make travel even more delightful than it already is...

Fred says:

actually the overweight charges are going UP.

Desert Rat says:

Anybody think that Arpey won't get his humongous bonus again this year? If so, I've got a convention center hotel that I'll sell you.

John says:

What I'm really waiting to see is the chaos that will ensue when a planeload of folks, all trying to carry on everything they can, discovers that there isn't nearly enough space. I don't know of a commercial jet that actually has enough overhead space to handle a reasonably-sized carry-on bag for each passenger on the plane. Most bins cover at least two rows of seats (usually 6 total) on one side of the plane, but will hold no more than 4 bags (assuming, again, that everyone brings reasonably sized bags, which they won't).

My prediction is that class-action, consumer protection lawsuits will start getting filed nationwide the day that AA actually begins to put this notion into practice.

Tim W. says:

You should just go ahead and make this category "Probably Insignificant Aviation News" into "You Really Don't Want Tim Wagner's Job Today."

But, having said that, here are some numbers to chew on:
Fuel cost per passenger in 2000: $24 per flight.
Fuel cost per passenger in 1Q 2008: $64 per flight
Fuel cost per passenger at today’s fuel price: $82 per flight
So, $58 increase per passenger.

Passenger revenue per flight per passenger in 2000: $163
Passenger revenue per flight per passenger 1Q 2008: $149
So, $14 decrease per passenger.

A lot of people say they'd rather pay a higher fare, but, when you get to choose a la carte-style, you don't subsidize someone else's two checked bags, when you're just carrying one bag onboard. Or, when you didn't want a cold sandwich, etc.

And, while gasoline costs are still less than 10% of most household's yearly expenses - jet fuel has gone from 10% to now close to 50% of an airline's yearly expense in just the past 4-5 years. So, something has to give.

Tim Wagner
Spokesman
American Airlines

Randy says:

Dear AA: Either raise your ticket prices or go broke, but don't make air travel more miserable than it already is. As a frequent business traveller, I learned a long time ago to travel light and not make a nuissance out of myself. Unfortunately, there are a lot of inexperienced travellers and terribly inconsiderate people out there who will forever push the limit on what can be carried onto an aircraft. This brilliant new scheme is going to have people fighting over already limited space in overhead bins.

David says:

If that was the real Tim Wagner who just posted, then he deserves much respect for stepping into the lion's den here. That said...

American and the other legacy carriers lost massive amounts of money when oil cost less than $50 a barrel. The cost of fuel isn't the problem.

The fact that you've created a product that your customers find unacceptable is the problem.

If people believe they are getting good value from you, they will fly you. Ask the folks at Southwest and JetBlue. It has to start with a genuinely good product that your employees can take pride in. And American doesn't offer one.

Tim W. says:

David,

This is most definitely the real Tim Wagner - at least the one that is a spokesman for AA. There's a Tim Wagner on this great Discovery channel show called "Alaskan Experience," and I would love to trade places with him - even if he did almost fall through some ice and freeze solid. But, I digress...

I can't argue with your point that we need to improve our customer service. At least I think that was your point. Because otherwise, we have a product that is amongst the best in the world - that is, we can get you on an AA plane or a codeshare partner to basically anywhere in the world in the same day (weather & ATC withstanding). We have the best frequent flyer program in the world, hands down, and we have a lot of other great attributes to our product.

We're working on the customer service issues, though. We have some labor issues right now that are not helping. To. Say. The. Least. And, maybe it's our fault for not having explained well the new reality of our industry following the economic downturn post-9/11. It's up to us to explain the new reality created by $120+ oil. There is no going back. There is only going forward or not going at all.

So, we're working to improve our customer service. A recent independent survey had us tied for second, with Continental, in the U.S. industry. But, we were significantly behind Southwest. Herb Kelleher explained what has made their customer service scores so high for all these years (it's in a Terry Maxon interview on the DMN aviation blog) - to summarize, he said "we under promise and over deliver."

That lesson is not lost on us. Unfortunately, AA and other 'legacy' airlines have 80+ years of promises that set expectation too high for the new reality of this world. That reality changed with deregulation and frankly, with Southwest. Price is king - there is no other consideration that comes close to price when a consumer makes a ticket purchasing decision. Network and frequent flyer program are the next most important factors - and you can't beat ours. So, we've got that going for us, which is nice.

Take this for instance, though: for years Southwest scored higher on 'food' in airline surveys than did AA or other airlines - despite the fact that they really had no food onboard. But, when you expect peanuts and you get peanuts, your expectations have been met. When you expect food, and you got a cold "Bistro" sandwich - the result was open to perception, putting it mildly.

And now, we have a whole new task at hand - changing our airline, our product, customer expectations, and the perception of what we offer and what we deliver. A rather large task to say the least.

Best,
Tim Wagner

Waterlewd says:

Oh my God...American Airlines is making those people who incur additional costs to pay for those additional costs. What bastards!!! How dare they use equality and logic to charge people for a service?!?! More bags = more weight = more fuel = more money -- not in the US of A, mother f#ckers. American Airlines has been flying too much in Europe to understand that we don't believe in personal responsibility. They're so out-of-touch....puuuuhh.[/satire]

American will have to strictly enforce carry-on baggage size using this new rule -- they have no choice.

Dear Randy: You little bitch, stop whining.

Chris says:

Thanks to Tim for the comments.

And I agree with Waterlewd. In my experience, the carry on baggage size has never been enforced, will that be a priority now?

David says:

Tim,

Thanks for the reply. And the honesty. You've got a damn tough job (especially on days like today), and it says a lot that you're willing to reach out in such a way. Kudos, and best of luck.

Tim W. says:

I should address the carry on issue, too.

If a customer carry's on an appropriate carry-on bag and then must gate-check the bag because our overhead bins are full, that customer will not be charged a fee. If you've ever flown American Eagle, you've probably gate-checked or seen people gate-check a bag.

It will be interesting to see if more people cary on bags. Right now, in the US, about half of our passengers check at least one bag. And, a significant portion of those people can continue to check a bag with no charge by dint of their frequent flyer status or because they paid full-fare or for a first class ticket. (Rest assured, you may think they are getting something for 'free,' but they paid for it one way or the other.) So, all of that to say - this fee affects less than a majority of our passengers.

My job isn't so tough, relatively. You know who has a tough job? Parents, evidently -http://www.onetoughjob.org/.

Warhol Reject says:

Two words for everyone: Fly Southwest.

That is all.

Tim W. says:

Someone didn't get his 15 minutes of fame...

Defeat Plaza says:

Tim W. - if you're still there...

Are overweight checked baggage costs indeed going up as Fred said?

Warhol Reject says:

Wakka-wakka, Mr. W.

(PS- Once again to the domestic travelers, avoid all these maladies and fly SW)

;)

Peterk says:

Randy wrote "I can't see how they make money flying me round trip to places like NYC and Miami for just over $200."

they don't. they make it off those folks who wait until the last minute and thus pay a higher price.

You're lucky in that you can book far enough in advance to get the low rate. some business travelers have to wait until just a few days before they travel to book their flights

what i can't wait to see is the individual who comes on board an AA flight with a wheelie bag and the overhead bins are full. Will AA charge them the $15?

I would like to see a rule put in place that says "if you can't lift it over your head to place it in the bin you have to check it."

Jason K says:

I'm curious about the overhead bins on those little Embraer RJ14x jets for American Eagle.
I didn't check, but does American Eagle have a different overhead bin size allowance than AA?
Those little bins can't handle the same size suitcase as say an MD-80, and I really don't want to pay extra on my next Eagle flight.

Platinum Member says:

I fly about 80 segments a year and have done so for about 4 years. Every once in a while I have to fly airlines other than AA (Delta and NorthWorst are notable examples) and when I do, the experience is always TERRIBLE. When my friends who don't fly much complain about AA, I always tell them it's the worst airline in the US other than all the rest.
I think the real problem these days is the bad attitude that many fliers have. I've noticed many people come into the airport expecting to have a bad experience, so they start looking for things to complain about from the start. It becomse a self-fullfilling prophesy. Usually the ones that bitch the most are the ones that don't fly much, and are on a vacation or something. They are usually also the ones that have no regard for fellow passengers-cramming half eaten candy bars in the seat pockets, handing dirty diapers to flight attendants when they are trying to serve food/drinks, putting their dirty feet all over the walls, etc. If a person has no regard for others, how can he expect others to have regard for him?

Gerald Brown says:

I am a frequent flyer and a frequent bitcher to AA.
Raise ticket prices and quit nickel and diming us all to death. Does anyone at American realize the public relations disaster they are creating?

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