American Airlines’ Pricing Blunders

It has not been a good week for American Airlines. First, the company drew the ire of air travelers by announcing it would charge $15 per checked bag beginning June 15. Then, American had to backpedal on a decision to charge $2 per bag checked by skycaps at Boston’s Logan International Airport and ban skycaps from accepting tips.

These recent moves by American Airlines are bewildering. It is no secret airlines have struggled since 9/11, and the effects of rising oil prices hit particularly hard in the airline industry. But, the company’s decision to use bag checking to create a revenue stream is a huge mistake. Travelers understand that the costs to use air transportation have risen. It would be much more palatable to build costs into prices of tickets. Add-on charges for baggage handling on top of higher fares just will not sit well with customers! Also, American is taking a risk that other airlines will follow suit with similar charges. If not, American may be forced to back off the fees. Unfortunately, the damage to customer goodwill will have occurred already.

Link: Baltimore Business Journal – “American Airlines to Halt Curb

Author: Don Roy

Don Roy is a marketing educator, blogger, and author. His thirty-year career began with roles in retail management, B2B sales, and franchise management. For the past 27 years, Don has shared his passion for marketing as a marketing professor. Don's teaching and research interests include brands, sports marketing, and social media marketing. Don has authored over 20 articles in scholarly journals, co-authored two textbooks, and self-published three books on personal branding. Don is an avid hockey fan and enjoys running. He and his wife, Sara, have three sons. View all posts by Don Roy