• Miami Herald, Monday, February 16, 2009 10:45 AM

The airline industry cut capacity to adjust to the rising cost of fuel last year. The move made it look "incredibly insightful" when the recession hit, Dan Garton, American Airline's evp of marketing tells Ina Paiva Cordle, because it had already adjusted to the drop in demand before it happened. "Sometimes they say it's better to be lucky than good," he quips.

In a Q&A, Garton says that it has taken time for consumers to adjust to new fees for services such as checked bags but that, overall, the programs have been successful and are here to stay. First, they generate revenue. Second, they give customers choices about things like how many bags to travel with, which they like. "You get what you pay for," he says. Finally, it allows the airline to differentiate among customers -- frequent fliers don't pay the same fees as vacationers who travel once a year on economy tickets.

Although he cannot talk about possible fare reductions, Garton says that there's "no secret to the fact that demand is down" and that "normally that softness is then reflected in some kind of lower fares."

Read the whole story at Miami Herald »