Airline passengers have learned to rough it: no meals, no pillows -- now, no pretzels. A day hardly passes when an airline doesn't announce another lost amenity or a new fee, all in the name of financial stability.
Northwest Airlines announced this month that in place of free bags of pretzels, it would offer passengers the option of buying a three-ounce bag of almonds, cashews and raisins for $1. It also pulled the 30 consumer magazines aboard its flights.
Pillows have vanished from the aircraft of Northwest, Delta Air Lines and American Airlines so the carriers can save on cleaning costs.
And American has taken back the extra legroom it gave travelers in its four-year-old public relations campaign, "More Room Throughout Coach." In the past few months, American has added 12,000 seats on its fleet of planes, decreasing average legroom, or pitch, from 34 inches to the standard 32.
But one airline -- also in financial distress -- is taking a different tack. Through 2 1/2 years in bankruptcy protection, United Airlines has sought to preserve passenger perks and keep additional fees to a minimum to help ensure that its customers remain loyal.
"Our customers enable us. We get our revenue from our customers that ultimately pay our salaries," said Peter D. McDonald, United's chief operating officer.
Or as John P. Tague, head of United's marketing, sales and revenue, put it: "No customers, no money."
United has not removed its magazines or pillows, and it still hands out free snacks to passengers. It still offers extra legroom on its business-class seats, especially out of Chicago, where it competes heavily with American.
"As an industry, we are not where we are because it's our customers' fault. We're not pulling pillows and blankets off because we're still here to provide value-added service to customers," Tague said. "United is going to take a different path in continuing to believe that there is a large segment of customers who value and will pay for what we produce, and we're going to run an airline for them, and not for the people who don't."
United has cut more than $3.8 billion in annual costs during the past two years, with the brunt being borne by employees. Pay, benefits and job cuts have saved the airline $3.2 billion. About 41,000 jobs have been lost since 2001. United recently moved to have its pension plan -- underfunded by $10 billion -- taken over by the government, which would mean only about $6.6 billion would be covered.
The airline is now focusing on other ways to cut costs without seeking additional concessions from employees or passengers. It plans to emerge from bankruptcy by the end of fall, even as late as Dec. 21, the last official day of autumn, Tague said. During that time, the airline has to get a new contract with its baggage handlers and submit a reorganization plan that must be approved by its creditors and the bankruptcy court. And United must also attract about $2.5 billion in exit financing from investors.
At the same time, the airline is seeking to attract business travelers with new amenities. In the next 12 to 18 months, United plans to unveil an updated Web site that allows travelers to surf for available dates and destinations for redeeming their frequent-flier points rather than calling the airline.
Instead of cutting perks, United said it has trimmed costs and boosted revenue in other ways. The airline cut its domestic flights by 12 percent during the past year and increased by 14 percent its international flights, for which it can charge higher fares. Pilots are encouraged to reduce fuel costs by turning off their engines and switching to a backup unit while planes are parked at the gate.
United, the nation's second-largest carrier, has the most flights in and out of the Washington area, thanks largely to its hub at Dulles International Airport. Some airline analysts have encouraged United to cut its hub largely because the region is so saturated with low-cost carriers, such as AirTran, JetBlue and Independence Air.
But instead of reducing service, United plans to increase the number of flights, particularly those of its low-cost operation, Ted. United plans to add more Caribbean and Mexico destinations out of Dulles in the next year.
For now, the airline isn't planning additional service cuts.
"We can't continue to run these companies in a cyclical fashion. The industry races to provide Dom Perignon in the up cycle and isn't sure if it wants to give anyone a pillow in the down cycle," Tague said.
Fare Hike Rescinded: Northwest backed down from its planned one-way $50 fare increase aimed at business travelers after two larger airlines failed to match it. Another -- much smaller -- fare increase failed to stick after it was proposed about 10 days ago.
Northwest announced the fare increase on Friday, and United, Continental Airlines and US Airways matched it. But American and Delta did not follow.
The increase would have put fares above the level imposed when Delta capped one-way tickets at $499 in January. Other airlines matched Delta's new fare structure on routes where they compete, but they complained that the cheaper fares crippled the industry.