Delta Airlines landed in some hot soup early June 2011 when they charged $2800 to US soldiers returning from a mission, for excess bags. According to policy, three bags are allowed to be checked in free for soldiers traveling Economy Class, and the fourth bag for each of the 34 soldiers had to be checked-in.

While the soldiers would have been re-imbursed the amount, the charges obviously upset them and they posted a video on Youtube shot in-flight, which hit 200,000 views in a few hours. The issue was covered on mainstream media, and received an angry emotional outburst from thousands over Twitter and community forums.
In the end, Delta Airlines relented by posting on their blog that the charges will be refunded and policy changed. They still kept getting angry comments on their blog.

So we’ve now done an independent analysis of the situation, mentioning the key facts, analyzing the tweets (using a cool sentiment analysis tool). We also assessed Delta’s response to the crises management framework we released after the ashcloud last year. And we’ve shared it all in the slide deck below for your benefit….

Everyone is now aware of the much criticized move by American Airlines to charge $15 for the first checked in bag, and $25 each for subsequent bags – a perfect example of the knee-jerk reactions we are getting used to from airlines. This is a one-way street for the passenger. What if oil goes down to $100 in two months? Surely the baggage fee will not be reduced. Sounds like a perfect recipe for disaster for customer confidence (if there is any left now).

Photo courtesy of http://www.worldrider.com/
Surely, there are better ways to deal with externalities than to squeeze out every nickle-and-dime out of the already exploited passenger. Airline executives in the US can learn some things from their counterparts in Asia (who’re still doing well in this environment) and also take some lessons in Economics. Here are three tips to get started: