American Airlines is experimenting with a business model that was first introduced by Air Canada.  The Canadian carrier has been using an a la carte pricing system.  This means that passengers must pay extra for anything beyond their seat on the airplane.  While industry-watchers consider this strategy a necessity, many passengers consider it a step too far.  Paying to check a bag is one thing, but making passengers pay for a drink and snack on the plane, that’s just cheap.

Other passengers disagree with the majority, saying that the extras are unnecessary and only serve to increase the overall price of tickets.  A la carte pricing allows a bit of respite from those added charges.  However, some airlines are able to offer comparable prices without having to resort to charging passengers for all the little things.  Southwest Airlines is known for its cheap fares and has, thus far, not charged passengers for in-flight refreshments or checked baggage.  They have not been known for their in-flight service, but now seems to be an industry leader, at least as far as domestic flights are concerned.  As competition increases, American Airlines might have to consider dropping the pricing scheme and reverting to the old ways.  However, for now, it seems that it, like many other major carriers, is merely trying to keep its head above water until the sour economy turns sweet again.

Meanwhile, low-cost carriers like Southwest, though also struggling, are poised to take a bigger chunk of the market.  They are banking on the pricing practices of major airlines to cause passengers to become so disappointed that they will be hungry for other options.  Some LCCs, like AirTran and Frontier Airlines, have banded together, code sharing, promoting each other’s routes and sharing gate and hangar space.  They hope that together, they can earn a bigger share of the market than they could if each operated independently.