The nation’s largest beverage companies are battling for the sugary, malty soul of US Airways. Among the hard choices the Tempe-based carrier faces are which routes to keep, the best ways to integrate workers and whether to go with Coke or Pepsi on its flights.
America West Airlines served Pepsi. Its beer of choice was Budweiser. US Airways serves Coke, and its beer is Miller Lite.
The two carriers merged in September, creating some lofty questions on in-flight amenities. Does the nation’s fifth largest airline go with the the "Real Thing," or are its customers part of the "Pepsi Generation?" Does it serve the "King of Beers" or is "Great Taste . . . Less Filling" the way to go once cruising altitude is reached?
"We’re not going to have the Pepsi Challenge on board the aircraft," said Phil Gee, US Airways spokesman. "It might be behind closed doors."
It’s a decision that could be worth millions to the carrier, and it gives the drink companies big, visible contracts. In 2002, United Airlines dumped Coke for Pepsi in a deal that was estimated to be worth $25 million over five years.
The carrier says the decisions could be the most visible of the series of choices that will help define the new US Airways’ in-flight experience. The company is expected to announce which way it will go in early 2006.
"People definitely have certain preferences to what beverage they like," Gee said. The airline’s beverage contracts are periodically up for review, typically annually or biannually, he said.
A catering logistics team being assembled will decide.
None of the beverage companies chose to comment on the debate.
While beverage choice may be important at the supermarket, it’s not a big deal to airline passengers, said Mike Boyd, a Coloradobased airline analyst. "They take whatever they’re handed," he said. "Do you think
anybody’s not going to fly because they got the Pepsi Challenge rather than Coke? Come on. They’re on the airplane before they even find out anyway."
Boyd said the decision can be costly because of differences in catering equipment.
"What they have on a former America West Airbus might not be the same thing as former US Airways Airbus," he said. "Those kinds of things can get very clumsy and very expensive."
Being the beverage of choice for an airline can mean great product exposure, especially for underdog niche or local companies looking to place their products. When PanAm started its shuttle service, it negotiated a deal with the Boston Beer Co., brewers of Sam Adams.
"I don’t want to say we put Sam Adams on the map, but on the other hand, since 1986 when the PanAm shuttle started it had a lot of exposure, and, in fact, Delta maintains it on board right now," said Robert Mann a New York airline consultant who worked for PanAm.
Typically, airlines will pay for beverages but at less than retail prices, Mann said. They usually extract other considerations such as a fee for using the product in exchange for advertising on in-flight entertainment and in magazines.
"It depends on how hungry the brand is and how creative the airline wants to get," Mann said. "America West has some pretty creative marketers there, so my guess is there’s some competition going on."
Gee said price will play a big part in determining the winners, especially at a time when the industry is under financial pressure because of soaring fuel costs. Other considerations will include how easily the products can be distributed and put on the planes, he said.