US Airways Says Goodbye to Free Meals
As the airline industry continues to tighten its belt, US Airways have announced today that they will be ending the tradition of free snacks on domestic flights. As of 1st June passengers will need to buy their snacks onboard with US Airways looking to reduce costs and increase income streams across the board. This is only the early stages of what looks to be a major overhaul of pricing and large scale changes in the airline industry.
When you consider that US Airways operate 3,800 flights a day to 230 destinations around the world, bringing in $11.7 billion in revenue and $427 million in profits in 2007, they may well have a lot of costs which they can cut!
While we have mentioned this in a number of posts over the last few months, the airline industry which went into the worldwide recession will not be the same as the one which appears at the other end. A number of smaller well-known companies have bitten the dust, and more and more of the larger ones are cutting out the luxuries from their services.
Will the industry be fitter? Will the industry be leaner when the economy starts to recover?
Even though there has been a great deal of cost cutting over the last few months as well as a number of price hikes, this is very much still the tip of the iceberg. The next stage will see corporate banks starting to turn the screw and asking companies to protect and strengthen their income streams. The airline industry needs the support of corporate banking more than ever at this stage of the economic cycle and the banks are very much calling the shots.