Beginning on March 1, coffee, tea, water, juice, and soda will once again be free for US Airways (NYSE:LCC) coach passengers. Great news, right? Sure -- just don't ask management to be happy about it.
"US Airways was the only large network carrier to charge for drinks, and that put us at a disadvantage," said CEO Doug Parker. Soda wars meets airline wars.
This positioning is astounding. Charging $2 for a Coke, if I'm reading Parker correctly, was like passing along a fare increase. Passengers noticed and, consequently, chose to fly Delta (NYSE:DAL), AMR's (NYSE:AMR) American, UAL's (NASDAQ:UAUA) United, or another carrier. Can you imagine?
Actually, I can. Bad press rained on US Airways after it announced that once-complimentary services -- including in-flight beverage service -- would be sold a la carte. As blogger Wayne Schultz described it, " US Airways introduces new free beverage service called bathroom sink."
Southwest Airlines (NYSE:LUV) subsequently piled on by poking fun at its price-gouging peers in a series of TV ads. Apparently, the strategy worked.
And that should scare the beejeezus out of hopeful airline investors.
Yes, I know some analysts are touting these stocks as potential winners over the next six to 18 months. They may very well be right. Oil has recently dropped under $40 a barrel. If prices were to remain below $50 a barrel for the bulk of 2009, cash-crunched carriers could see a windfall.
What won't change are the broader implications of Parker's statement. He won't say so, but tacitly he's admitting that U.S. Airways has zero competitive advantage -- that it has nothing to learn from innovators like Apple (NASDAQ:AAPL). Its only viable strategy is to keep doing what everyone else does.
Yeah, that's comforting.
Get your clicks with related Foolishness:
- This airline stock may yet climb into the black.
- Check the gauges on your airline operating metrics before investing.
- Airline fees left some ski resorts in the cold.
