U.S. Airways CEO: We Don't Overcharge, We Pass On Costs

If any of you had some sort of pipe dream that there might be a day when airlines wouldn’t charge ancillary fees for services that used to be included in the ticket price, U.S. Airways CEO Doug Parker has made it clear the charges aren’t going anywhere because they benefit everyone in the long run.

Speaking to delegates of the Global Business Travel Association, Parker explained that the advent of fees for everything from checked bag to food has helped stabilize the industry:

The reality is a financial crisis for airlines is terrible for business travel. We are now more healthy, which is a good thing for travel buyers….

But we are not overcharging, we’re passing on the costs. [Checked] luggage services are extremely expensive.

Asked about fuel prices, Parker said US Airways was not hedging: “We did until August 2008 and it nearly pushed the company into bankruptcy.

“It is risky and extremely expensive. Prices tend to fall during periods of weak economy, so the airline finds itself paying a high price for fuel at the time when the economy’s going down, which is a real risk. It doesn’t make sense.”

On the subject of ticket prices, Parker had some strong words about just how much of what travelers pay goes into the government’s coffers. “Here 30% of the ticket price is tax,” he said. “These levels are what you see on cigarettes and liquor. We are taxed like we are a vice. Airlines should be being encouraged to go out and create healthy businesses.”

GBTA 2011: US Airways boss – ancillary charges are here to stay [ABTN]