US Airways announced a massive overhaul of their entire operation yesterday, including (but not limited to), reducing their domestic capacity by 8%; laying off 1,700 employees; charging $15 for a checked bag; all-but-shuttering their Las Vegas late night flights; charging $25 for domestic phone reservations and $35 for international; eliminating the mileage bonus for Preferred Status members; and two egregious fees:
– Sodas and water will now cost $2. I wouldn’t care much about this, but the (insert expletive here) TSA won’t let you bring liquids into the airport. In short, if you want a drink on your 5 hour flight to Phoenix, you’ll pay for it (bitch).
– Reward tickets (previously known as free tickets) will now cost you $25 in the US and $50 to Hawaii and international. We shall now refer to these as 90%-off-tickets.
Hoo boy. US Airways is basically going all-in with these moves. They’re going full Ryanair on their customers, and I’m certain we’ll see similar moves by the other majors. This is a code red, defcon 12, all hands on deck, every cliche you can think of move that suggests it is as bad as it’s ever been for these guys. After 9/11 we didn’t see anything close to this. During SARS we didn’t see anything close to this.
I don’t think I’m going out on a limb when I say (for like the 11th time in 3 months), this could be the end of the industry as we know it. It already is, really. The full-service airlines are now charging for water, shutting lounges and eliminating perks for their best frequent flyers. There’s nowhere else to go. All frills have been eliminated, and they can’t cut prices further. What would you do if you were running one of these airlines? I know what you’d do: the exact same thing. There’s nothing left to do. Well, there’s one thing left to do (and no one’s going to do it): Look at Malaysia Airlines.
Yes, Malaysia Airlines. Malaysia had a nice comfortable and profitable domestic network and a well-regarded international network until a couple of years ago. Then Air Asia came along and undercut them on price by something like 90%. Sure, Malaysia fought for a while, but in the end they did the only thing they could do: They called up Air Asia and told them they can have their stupid domestic routes (and/or shove them up their tuchus), that they were going to focus on the international business. (Mostly – they still set aside about 30% of their domestic seats for low fares…)
And so they did; and in the process created an extremely well regarded top-of-its-class international carrier. Air Asia won, and Malaysia Airlines won.
I don’t know if American would have the guts to say to JetBlue – OK, you win at JFK. The domestic routes are yours, but please feed them into our international network. Or say the same thing to Southwest in Dallas. Or for Delta to say the same to AirTran in Atlanta – you can have the domestic stuff, but let’s coordinate to get your connecting passengers to London on us.
That’s really the only option left, just as it was the only option for Malaysia. Anyone have the guts to try it?