Traditional full service airlines such as British Airways and Qantas could join their low-cost rivals in charging passengers for baggage check-in and food to cope with soaring oil prices, a leading industry executive told the Guardian today. The head of one of the world's biggest airline alliances, oneworld, whose members include BA and Qantas, said the group will consider changing membership rules in order to allow budget airline-style charges.
Add-on fees for stowing bags and refreshments are a staple of the budget carrier industry, but long-established airlines have refused to levy such charges in case they lose out to competitors. But John McCulloch, oneworld's managing partner, said: 'If the industry moves to a standard of charging for an apple juice in economy, the alliance will move in that direction.' Asked if bag check-in charges are also on the horizon, he told the newspaper: 'Airlines would argue that it's the right way to do it. It's 20 a bag, 10 for a meal. We are going to see much more of that.'
He added: 'Airlines are going to have to find some way of combating this fuel price, whether it's increasing fares or cutting costs, because the business is unsustainable today. People have realise that it's going to get more expensive to travel. Fares have to rise to a realistic level to reflect the fuel price. Whether that can happen without the industry breaking up is the key question.'
Mr McCulloch, speaking at the annual general meeting of the International Air Transport Association in Istanbul, added that the 10 oneworld airlines will cooperate more closely on buying fuel. He admitted that regulatory authorities in Australia, the US and Europe will watch the talks closely, but the industry has no choice other than to work harder on reducing costs together.
He added that ownership laws, which restrict foreign carriers to 25% of the shares in US airlines and in the European Union to 49%, will have to change as airline industry focuses on mere survival over the next year. Unions will also have to give concessions, adding:'There are attitudes towards ownership and labour that are historical and unsustainable,' saying that setting up an airline at Heathrow now faces significant obstacles due to trade union contracts. |
