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US Airways to end fees for non-alcoholic drinks

US Airways, bowing to customer grumbling and a lack of response from competitors, plans to stop charging for soda, juice, water and coffee beginning March 1.

The Arizona-based airline is the only major U.S. airline to charge for non-alcoholic beverages and until now has been largely unapologetic for the $1-$2 fees and other new charges instituted last summer when fuel prices were escalating.

The airline announced the return to free drinks to employees Sunday afternoon and plans a public announcement Monday morning. It is the airline's second major retreat in three months, the last a return of mileage perks for frequent fliers.

Andrew Nocella, the airline's senior vice president of marketing and planning, said the airline ultimately decided to reverse its decision because the negative passenger reaction wasn't worth the limited amount of extra revenue the fees brought in.

Some travelers were upset they had to pay for drinks because they hadn't heard about the new charges, while others wondered why US Airways was charging when competitors such as Southwest and others don't, Nocella said.

"It's such a minor issue in the grand scheme of things but was having a large impact on the perception of our brand," he said. "We just came to the conclusion that it was distracting our passengers from all the other things we were accomplishing, in particular our great on-time performance."

The airline would not disclose the amount of revenue it took in from the beverage charges. Altogether, passenger fees brought in $100 million in revenue in the fourth quarter and are expected to bring in $400 million to $500 million this year. Eliminating the drink fees does not change that estimate, Nocella said.

As recently as last fall, US Airways CEO Doug Parker said in an interview that the airline had no plans to eliminate any of the fees despite the plunge in fuel prices.

"You never say never because competitive forces could eventually force us to turn back," he said, "but we certainly hope that's not the case and don't believe it will be."

He did say at the time that the airline was not selling as many drinks as it expected to sell, but called that a good thing because it meant the aisles weren't constantly clogged with beverage carts and it freed up flight attendants' time for more important matters.

US Airways President Scott Kirby went so far as to say the airlines' flight attendants, who initially came out against the beverage fees because they would bear the brunt of customers' wrath, would "riot" if the airline reversed its decision.

The Association of Flight Attendants, the union representing US Airways' flight attendants, debunked that notion and said his comment was "just his way of telling himself they made the right decision."

Mike Flores, president of the US Airways' unit of the AFA, praised the airline's decision to return to free drinks.

"Flight attendants are safety professionals first and foremost," he said. "This decision by the company will help return us to that status rather than being salespeople in the aisle of the airplane."

Nocella said the reversal on the drink front is not a sign US Airways' is abandoning its industry-leading embrace of passenger fees, or "a la carte" pricing.

"It really doesn't change our philosophy that a la carte is what we need to do as a business and an industry to move forward," he said.

In the memo to employees, Parker suggested that airline executives had no regrets about testing the out the beverage fee.

"Frankly, it would have been a bigger risk for us not to have tried charging for drinks because innovation and a new business model are desperately needed," he said.

Southwest Airlines, US Airways' main rival in its Phoenix hub and other cities, has called fees by US Airways and its competitors "a gift." The airline launched a major national advertising campaign touting its lack of fees. Company officials have said there is anecdotal evidence they are winning business from fee-charging competitors.

At US Airways, Nocella said, "It's hard to find any evidence that people weren't flying us because we were charging for drinks."

The Arizona Republic is owned by Gannett, parent company of USA TODAY.