Revenue-hungry airline to charge for aisle seats

Reuters ^ | 03/14/06 | Kyle Peterson

[MikeA]

By CHICAGO (Reuters) - Struggling U.S. airlines, looking for new ways to generate revenue, are getting bolder about charging for pretty much anything that makes air travel a little more comfortable -- including aisle seats.

First came charging passengers for in-flight meals. Then, reservations done by phone cost extra. And now, one major airline, Northwest Airlines Corp. (NWACQ.PK: Quote, Profile, Research), is trying to charge passengers for the right to sit in aisle seats and emergency-exit rows.

The day is coming when carriers will require special fees even to check a bag, experts say.

Analysts told Reuters that travelers should brace for more nickel and diming as airlines seek to recoup losses from soaring fuel costs and competitive pressures. Airlines are likely to test passengers' willingness to pay for an ever wider array of services.

"We're just scratching the surface. I think 2006 is going to bring a tremendous amount of changes," said Terry Trippler, an analyst with travel Web site Cheapseats.com.

"I think it's going to be the difference between a black bottom line and a red one," he said.

Bankrupt Northwest this week unveiled a program called Coach Choice in which the carrier will save some preferred coach seating on the aisle or emergency-exit rows until check-in. Passengers can pay $15 per flight to sit in those seats, which may offer more room.

Airlines has been weakened by rising fuel prices and low-fare competition that keeps ticket prices low. In recent years, carriers have been trying to cut costs by eliminating expendable services and perks. AMR Corp's (AMR.N: Quote, Profile, Research) American Airlines and Delta Air Lines (DALRQ.PK: Quote, Profile, Research) last year eliminated pillows on domestic flights.

"It's certainly a trend. I expect to see more of it," said Morningstar equity analyst Chris Lozier. "I had never even considered the possibility of charging for aisle seats. It's definitely being taken to extremes at this point."

Lozier said airlines must be careful when implementing programs like Northwest's. Carriers run the risk of alienating customers if they charge for services or seats that do not have special fees attached at other airlines.

Most carriers have cut meal service on shorter flights in the coach section. Many have begun charging for food, drinks and entertainment that used to be free. Continued ...

© Reuters 2006. All Rights Reserved.

[MikeA]

I flew Virgin Atlantic to London in 1993 when they were still a relatively new airline and I loved it! Coach and its amenities were like what is offered in business class on most other airlines with your own multi-channel movie screen, video games, excellent food, solicitious service from the flight attendants, etc. The only difference was the seat size and leg room. Anyway, I highly recommend VA. We were very pleased with our experience.

[SICSEMPERTYRANNUS]

I like continental... its a good airline, good service, comfortable...

I disagree, but your taste in vodka isn't too shabby : )

[Central Scrutiniser]

Well a couple of the big airlines got it, and adjusted, American has done wonders lately, Continental still is working it out. Delta and Northwest are disaster areas though.

As for smaller planes, it makes more sense to run a 190 seat 757 to a mid city like Copenhagen and fill it up, then to run a 260 seat 767 there and sell 75% of the seats. As for leg room, every time an airline tries to make more space, it fails. American tried it a few years ago and they lost their shirts.

Its a tough business, the revenue line is razor thin, the wrong equipment in the wrong market is a disaster.

[FlipWilson]

Quote: "To a business traveler, there is a huge difference between San Francisco and Oakland or San Jose. SFO is much closer to downtown San Francisco than San Jose, and doesn't require fighting Bay Bridge traffic at rush hour, like going to Oakland would. Time is money."

I actually prefer flying into San Jose as the SF airport blows. Besides, when I fly into the Bay Area, I usually am staying overnight as the trip is a cross country one for me.

[mombonn]

Thankfully, I haven't had to fly in several years.

If I did, I'd only consider paying for the privilege sitting in a window seat.

[Babu]

Southwest makes money because they have their fuel hedged better than anyone else, without the hedge they are losing money. And their hedge will be over soon, and they know it, which is why they just raised all their fares this week.

Correction -- Southwest only raised the high maximum for last-minute purchases. That reportedly amounts to about 2% of their fares, as only a tiny minority of customers purchase their tickets last-minute ... I have flown Southwest for many years and have never bought one of those near-term fares, and probably never will.

[FlipWilson]

Quote: "As for smaller planes, it makes more sense to run a 190 seat 757 to a mid city like Copenhagen and fill it up, then to run a 260 seat 767 there and sell 75% of the seats. As for leg room, every time an airline tries to make more space, it fails. American tried it a few years ago and they lost their shirts."


Yes, smaller more efficient planes are the way to go. Hence, Boeing is cleaning house these days. As for legroom, the dino's have not been serious about trying it and have done it more as a gimmick. For example, as someone pointed out above United has the extra legroom seats. But, rather than taking seats out of the coach cabin, i.e. fewer seats, they add seats into the non-extra legroom section making them even more cramped. They are trying to have their caked and eat it too. Once successful solution has been to take out first class, allowing for more coach seats to be added, then subtracting a row netting more leg room while still netting more seats (more $$$).

[ketelone]

Thanks... and I like your tagline :)

[conservative in nyc]

If routes to small cities don't pay, they shouldn't fly there. That's what busses are for.

It's not that routes to smaller cities don't pay; try flying to somewhere in North Dakota from either coast for less than $400. The problem is that not as many people want to fly from small cities to any one point, so you need to fly through a hub or use smaller planes. Southwest claims not have any hubs, and small city flying doesn't fit Southwest's one-size-fits all business model. The 737 is too large to fly there, and Southwest doesn't fly anything smaller. The legacy carriers fly a number of different aircraft types, which increases costs.

[Hot Tabasco]

This is ludicrious.

What is ludicrious is the fact that they are the most heavily regulated industry by the Federal Government in this country. Then add to that the fact each and every one of the airlines has multiple union affiliations that they have to appease in order to continue operation.

How they continue to remain in business with all the cards stacked against them I will never know.

Perhaps you should direct your anger towards the unions and the Federal government, not the airlines because just like the targets of your 401-K directed contributions, they are trying to stay afloat while at the same time trying to turn a profit for their shareholders by doing whatever it takes.

Unions + Federal Government = Unnecessary obstacles to a successfull economy

[MikeA]

You're preaching to the choir.

[Central Scrutiniser]

USAirways is doing some European service with only 8 larger seats in what was first class, and putting a bit more room in the back with their 757's. They just got 3 planes from ATA which are going to be that way, if it works, expect to see more .

[Cobra64]

I always insist on a window seat. I can't stand the sweathogs walking down the aisle and idiots who overpack trying to jam their carry-ons in the overhead. With the window seat, I put a pillow up against the bulkhead and sleep.

[Cobra64]

My last flight, I had the aisle in the last row. The guy in the middle seat was "beefy", so I tried to hang over the aisle, constantly bumped by the stews and bathroom users.

I HATE aisle seats. You end up black and blue by the time the flight is over.

[Flavius Josephus]

A number of the carriers, including Continental, now have those small, nimble little Embraer (Gulfstream?) jets for smaller routes and offpeak. Personally, I love'em.

[R.W.Ratikal]

The airlines resorting to these extreme charges are the very ones who cannot control costs. Partly, it's not entirely their fault.

Before deregulation there were only a few trunk line carriers and a larger number of regional carriers. The market was virtually closed to new entrants b because the FAA would not grant new certificates. Costs did not matter because the FAA/CAB allowed airlines to simply pass on higher costs to the flying public. The sky was the limit..

When deregulation came any airline could fly anywhere. But the former trunk carriers were burdened with years of high union imposed costs that could not be reduced. One after the other the old-line carriers crashed. Eastern Airlines, TWA, Braniff, PSA, Texas International, Air Florida, Western Airlines, Pan American, Northeast, and a host of others, large and small.

Then came the so-called low cost operaters. They took advantage of lower paid pilots, electronic ticketing, uniform equipment and other modern cost-cutters that the others could not put into affect.

The dinosaurs will probably eventually die off leaving a new industry.

[R.W.Ratikal]

The airlines resorting to these extreme charges are the very ones who cannot control costs. Partly, it's not entirely their fault.

Before deregulation there were only a few trunk line carriers and a larger number of regional carriers. The market was virtually closed to new entrants b because the FAA would not grant new certificates. Costs did not matter because the FAA/CAB allowed airlines to simply pass on higher costs to the flying public. The sky was the limit..

When deregulation came any airline could fly anywhere. But the former trunk carriers were burdened with years of high union imposed costs that could not be reduced. One after the other the old-line carriers crashed. Eastern Airlines, TWA, Braniff, PSA, Texas International, Air Florida, Western Airlines, Pan American, Northeast, and a host of others, large and small.

Then came the so-called low cost operaters. They took advantage of lower paid pilots, electronic ticketing, uniform equipment and other modern cost-cutters that the others could not put into affect.

The dinosaurs will probably eventually die off leaving a new industry.

[R.W.Ratikal]

The airlines resorting to these extreme charges are the very ones who cannot control costs. Partly, it's not entirely their fault.

Before deregulation there were only a few trunk line carriers and a larger number of regional carriers. The market was virtually closed to new entrants b because the FAA would not grant new certificates. Costs did not matter because the FAA/CAB allowed airlines to simply pass on higher costs to the flying public. The sky was the limit..

When deregulation came any airline could fly anywhere. But the former trunk carriers were burdened with years of high union imposed costs that could not be reduced. One after the other the old-line carriers crashed. Eastern Airlines, TWA, Braniff, PSA, Texas International, Air Florida, Western Airlines, Pan American, Northeast, and a host of others, large and small.

Then came the so-called low cost operaters. They took advantage of lower paid pilots, electronic ticketing, uniform equipment and other modern cost-cutters that the others could not put into affect.

The dinosaurs will probably eventually die off leaving a new industry.

[R.W.Ratikal]

The airlines resorting to these extreme charges are the very ones who cannot control costs. Partly, it's not entirely their fault.

Before deregulation there were only a few trunk line carriers and a larger number of regional carriers. The market was virtually closed to new entrants b because the FAA would not grant new certificates. Costs did not matter because the FAA/CAB allowed airlines to simply pass on higher costs to the flying public. The sky was the limit..

When deregulation came any airline could fly anywhere. But the former trunk carriers were burdened with years of high union imposed costs that could not be reduced. One after the other the old-line carriers crashed. Eastern Airlines, TWA, Braniff, PSA, Texas International, Air Florida, Western Airlines, Pan American, Northeast, and a host of others, large and small.

Then came the so-called low cost operaters. They took advantage of lower paid pilots, electronic ticketing, uniform equipment and other modern cost-cutters that the others could not put into affect.

The dinosaurs will probably eventually die off leaving a new industry.

[R.W.Ratikal]

The airlines resorting to these extreme charges are the very ones who cannot control costs. Partly, it's not entirely their fault.

Before deregulation there were only a few trunk line carriers and a larger number of regional carriers. The market was virtually closed to new entrants b ecause the FAA would not grant new certificates. Costs did not matter because the FAA/CAB allowed airlines to simply pass on higher costs to the flying public. The sky was the limit..

When deregulation came any airline could fly anywhere. But the former trunk carriers were burdened with years of high union imposed costs that could not be reduced. One after the other the old-line carriers crashed. Eastern Airlines, TWA, Brannif, PSA, Texas International, Air Florida, Western Airlines, Pan American, Northeast, and a host of others, large and small.

Then came the so-called low cost operaters. They took advantage of lower paid pilots, electronic ticketing, uniform equipment and other modern cost-cutters that the others could not put into affect.

The dinosauers will probably eventually die off leaving a new industry.