"Frugal US Airways drops free pretzels to save dough"

Thursday, July 7, 2005

Frugal US Airways drops free pretzels to save dough
Another frill is gone
By Dan Fitzpatrick
The Pittsburgh (PA) Post-Gazette


US Airways is bagging free pretzels on all domestic flights -- a move that
should save the money-losing airline more than $1 million a year.

The snack, made by Central Pennsylvania-based Snyder's of Hanover, will be
gone as of Sept. 1, leaving only juice and soft drinks as free offerings
aboard most flights of US Airways, still Pittsburgh's dominant airline and
employer of about 5,000 locally.

Ditching the tiny, half-ounce bag of mini-pretzels is the latest move away
from the frills and luxury that once defined air travel.

Some airlines, while losing hundreds of millions a year, are eliminating
free pillows, magazines and plush airport clubs. At twice-bankrupt US
Airways, gone are the champagne and ice cream for first-class passengers,
real wine glasses -- saving the carrier $4 million a year in dish-washing
bills -- and free meals for the passengers in coach, who now have to shell
out $7 for a boxed lunch or dinner, $5 for a snack box and $3 for a can of
Pringles or a large Kit-Kat chocolate bar.

"The soft drinks are next," said Kim Booth, who works for a Downtown
Pittsburgh technology company. "I just know it!"

The airline's pretzel decision left other travelers feeling a little salty
yesterday.

"It comes across as being cheap," said Bob Johnson, a US Airways frequent
flier from Mystic Island, N.J.

For business travelers, "the absence of the pretzels will be a virtually
continuous reminder of the problems US [Airways] is experiencing," said
Kevin Mitchell of the Radnor, Pa.-based Business Travel Coalition. "Each and
every time a business traveler orders a drink, he will instinctively await
the offer of snacks only to remember how much trouble this airline is in
when the offer is not forthcoming."

Airlines have been chipping away at amenities for decades, a trend spawned
by Congress' deregulation of the industry in 1978, which forced carriers to
compete on price and find ways to save a few bucks here and there.

One of the first cost-cutters was American Airlines Chief Executive Officer
Robert Crandall, who bragged two decades ago about saving $40,000 after
eliminating black olives from salads. Delta Air Lines, in the mid-1990s, cut
a single lettuce leaf from meals and saved $1.4 million a year. Many
airlines also began charging for alcoholic drinks.

But the changes had been relatively imperceptible until the Sept. 11, 2001,
terrorist attacks, an event that crippled the industry and forced several
troubled carriers to seek the protection of bankruptcy court. In the time
since, U.S. airlines have lost a combined $30 billion and could lose another
$5 billion this year, according to analysts.

Complimentary snacks and meals were among the first frills to go after 9/11.
America West Airlines, the carrier planning to merge this fall with US
Airways, was among the first major airline to take the risky move of
charging for meals in coach. US Airways did the same in 2003, as did many
other big carriers.

Now carriers are looking to even smaller items as a way of saving money.

Delta and American did away with complimentary pillows this year. Northwest
Airlines, which has lost more than $3 billion since 2001, stopped carrying
Newsweek, Glamour and other magazines on its planes and in its airport
clubs, saving $565,000.

American and United Airlines began experimenting with a $2-per-bag fee for
curbside check-ins. Northwest also dropped pretzels as a free snack from its
1,500 domestic flights last month, saving about $2 million a year. In place
of the pretzels, Northwest offered a nut mix for $1.

Ironically, many low-cost carriers such as Southwest Airlines, JetBlue
Airways and AirTran Airways now look extravagant by comparison, offering
leather seats, satellite TVs, pillows and free snacks.

Southwest, king of the no-frills approach, has no reserved seating but it
does offer free peanuts and pretzels, along with crackers on medium-haul
flights and "snack packs" on long-haul flights. All are complimentary.

In three decades as a company, Southwest has never offered meals on its
flights because it realizes how much the food costs to produce. The airline
wants people to "pay less and get to the destination and enjoy a nice meal
there," said spokeswoman Whitney Eichinger.

One Pennsylvania company feeling the volatility of the airline snack issue
is Snyder's, the privately held company that provides US Airways and several
other airlines with millions of mini-pretzel bags per year.

Snyder's spokesman John Bartman would not say how many bags are sold to US
Airways, but he did say the loss of the pretzel contract would not affect
the snack company in a larger way. Sales to airlines represent a "small
piece" of the company's overall business.

"We certainly don't like to lose business," he said, "but it is part of
being in business."

Bartman is not worried about the long-term damage to the airline snack
business, either. It "comes and goes," he said. "It's not something you get
and hold forever."

As for US Airways' pretzels, they will still be available on trans-Atlantic
flights, and first-class passengers will continue to receive, free of
charge, a snack basket with rotating choice of nuts, chocolate cookies and
potato chips.

And for pretzel-lovers riding in coach, hope remains: America West, if it
merges with US Airways in the fall, may keep its policy of free pretzels --
and peanuts -- for all flights.

That is "one detail among many that will have to be eventually addressed,"
said America West spokesman Carlo Bertolini. "At this point, it is still too
early."


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