The United Airlines and the US Airways announced their new fees recently. Most carriers in the U.S already have instituted $25 charge for checking a second bag. Southwest Airlines will be the only U.S carrier that permits two checked bags for free. According to Tom Parsons, an air travel expert expects more service fees to come. Because of the extra charges for seat reservations, he expects the legacy carriers to follow the lead of discount carrier spirit Airlines. Currently, the prices are $5 for middle seats, $10 for window and aisle seats and $15 for exit-row seats. Other airlines also have started to charge money for window or aisle seats.
United Airline said the baggage fee will goes into place with customers who buy tickets beginning Friday for domestic flights. This will not apply to customers flying in first or business class. Also for those who have premier status with United or Star Alliance. It also increased their fee to check three or more bags in the Chicago-based carrier. The overweight bags or items that require special handling costs $125 from $100, and $250 from $200.
The United’s chief operating officer said, “With record-breaking fuel prices, we must pursue new revenue opportunities while continuing to offer competitive fares by tailoring our products and services around what our customers value most and are willing to pay for.” United expects $275 million of the potential revenue from baggage handling service fees a year. US Airways already planned to takes fees at the beginning of July 9th.
The US Airways Chairman mentioned that they must write a new playbook for running a profitable airline in this new and challenging environment. Also, the Steady rise of fuel surcharges continued with United, Continental Airlines, Delta Air lines, US Airways and Northwest Airlines. They all matched the cost which was increased $20. It was because of the fuel surcharges that were initiated by American on most of its domestic routes. Now, United Airlines are at their lowest level in the company’s three years out of bankruptcy.
I think while other companies raise their costs it would be a competitive advantage for companies that do not charge the same amount of fees. The situation might be difficult to lower the cost, however, increasing the market share through lowering price strategy would greatly benefit their profit.
http://www.newsweek.com/id/141246/page/3
United Airline said the baggage fee will goes into place with customers who buy tickets beginning Friday for domestic flights. This will not apply to customers flying in first or business class. Also for those who have premier status with United or Star Alliance. It also increased their fee to check three or more bags in the Chicago-based carrier. The overweight bags or items that require special handling costs $125 from $100, and $250 from $200.
The United’s chief operating officer said, “With record-breaking fuel prices, we must pursue new revenue opportunities while continuing to offer competitive fares by tailoring our products and services around what our customers value most and are willing to pay for.” United expects $275 million of the potential revenue from baggage handling service fees a year. US Airways already planned to takes fees at the beginning of July 9th.
The US Airways Chairman mentioned that they must write a new playbook for running a profitable airline in this new and challenging environment. Also, the Steady rise of fuel surcharges continued with United, Continental Airlines, Delta Air lines, US Airways and Northwest Airlines. They all matched the cost which was increased $20. It was because of the fuel surcharges that were initiated by American on most of its domestic routes. Now, United Airlines are at their lowest level in the company’s three years out of bankruptcy.
I think while other companies raise their costs it would be a competitive advantage for companies that do not charge the same amount of fees. The situation might be difficult to lower the cost, however, increasing the market share through lowering price strategy would greatly benefit their profit.
http://www.newsweek.com/id/141246/page/3
20620042 – entry # 14
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