The Forward Cabin reports that American Airlines is raising the price of beer, wine, and liquor in coach by $1 effective October 1.
- Beer: $8
- Wine: $9
- Spirits: $9
Many international flights have complimentary adult beverages in coach.
- Europe: complimentary beer and wine
- Asia: complimentary beer and wine
- Hong Kong, Tokyo, Sydney, Auckland: beer, wine and spirits are complimentary. Hong Kong is their longest flight, and you can’t have a successful joint venture with Japan Airlines and Qantas while charging for booze.
- Latin America: some destinations have complimentary beer and wine
- Dallas – Hawaii: complimentary beer and wine
American’s Executive Platinum and ConciergeKey members receive a complimentary beverage in coach, while Main Cabin Extra customers are limited only by their ability to convince flight attendants to perform service (and to look sober).
I think there are several ways to understand American’s latest ancillary fee increase.
- It’s like movie theater popcorn, of course it’s expensive if you want to make it part of the experience. And it’s optional.
- It’s like movie theaters enforcing a ban on bringing your own popcorn under color of law. Comedian Steven Wright used to say that he got kicked out of a theater for bringing his own food. His argument was that the concession stand prices were outrageous and besides he hadn’t had a good barbecue in a long time.
You aren’t supposed to bring your own snacks to the movies. If you bring your own beverages on a plane you may go to prison.
- Defies supply and demand. American started catering more drinks on board on many domestic flights, you’d think they would be reducing the price of alcohol for these flights.
- TANSTAFB There ain’t no such thing as free beer. September 1 they changed up the beers they offer and now they’re making those less accessible.
- It’s still cheaper than a big city bar. Of course there you’re paying for the ambiance and rent, but you’re already renting your seat from American on the flight.
- We don’t want passengers drinking anyway Drinking on plane causes problems they’re just using economics to solve a problem that affects us all. Along some margin this should mean that fewer flights divert.
- Space on a plane comes at a real premium. American’s CEO Doug Parker keeps reminding us how costly those two inches are that he stole from the lavatories. So the cost of alcohol needs to reflect how valuable that space is — or else he’d be tempted to replace beverage carts with more seats.
- Maybe American could get rid of lavatories entirely? This change may mean fewer people need to use the bathroom, with fewer people buying booze maybe they won’t even need to have lavs.
- It could be worse — under this management. At least they aren’t charging for water like they did when they ran US Airways.
- Single handedly fixing American’s revenue problem. American says they have a premium revenue problem while customers spend more to fly Delta. United and Delta’s inflight alcohol charges hover around $8, so American is driving to a higher price point. Perhaps this will make up for some of their RASM disadvantage.
- It’s the fault of online travel agencies American started allowing basic economy customers to bring full sized carry on bags onto aircraft again, since customers were increasingly comparing total trip cost and customers wanting a carry on bag saw that American was more money than Delta on the same trip. Maybe online travel sites need to calculate total trip cost with booze?
- If the price were lower basic economy passengers might buy booze to go. Basic economy passengers now have carry on bags on board so the profit-maximizing equilibrium might be selling more beer and wine to go, stuff them in their rollaboards to drink later.
- Will United and Delta match? American was last among the majors to raise checked bag fees by $5, following United and then Delta. This gets them out ahead of the curve at the end of the third quarter, before earnings season.