This article caught my attention. In short, the airlines which charged the most ancillary fees for "extras" like checking bags lost more money than those that didn't.
I also thought about this Fake Steve Jobs post regarding IBM mainframes and the old-school airline carriers. Many of the same companies charging fees and losing money are stuck customers of IBM. Snark aside, FSJ is correct in that the airlines are basically computer operators.
Over the past several years I've flown a lot, on both old-school large carriers (American, United, etc.) and new commuter carriers (Virgin America, JetBlue) as well as some in-between (Alaska, Southwest).
Next month I'm speaking at Loyola in New Orleans and had to book air travel. I realized I was disappointed that I had to fly old-school. Really disappointed.
Given the choice, I'd be flying Virgin or JetBlue. They provide TVs in the seatbacks. Wi-Fi. Comfortable seats. Decent online check-in. Minimal fees for the sort of travel I tend to do. Pleasant terminal experiences.
When I think of the old-school carriers, I think of middle seats, "here's yer peanuts", no movies, no power outlets, and a general sense of "we're doing you a favor by flying this plane, so siddown and shut up until we get there". Then I think about how I need to budget more time at the airport because I'm now going to be charged $25 to check my bag. And I think about all the super-thrifty folks who will be lugging their overstuffed rollaboard bags down the aisle and trying to ram them into the overhead compartments just to save $25 or more, and how much less-pleasant that makes things.
A quick side note about that: One of my least favorite experiences here is watching this happen - and not just because it's frequently my bag getting mashed by someone else's. Frequently there's an older woman who is trying to heft a massive, should-have-been-checked bag into the overhead compartment.
The flight attendant approaches and asks me to help the woman with her bag, because "we don't handle luggage". I'm a polite guy, I'll help out someone obviously in distress, but hey, I don't work for the airline. I "don't handle luggage", either! The flight attendants aren't allowed because of risk of injury and lawsuit - so clearly I, a paying customer, should have to do this. Maybe I can pass out knives at the restaurant tonight, too.
I digress. I don't want much out of air travel. I want to get where I'm going safely. I want a comfortable seat. I want some options for entertainment, including a power outlet. Internet access is a bonus.
Ultimately I suspect the reason the old-school carriers are hurting is more about their business attitude than the fees they're charging customers or their mainframes and back end. The new carriers seem to care about your flying experience (or at least the flying experience for my demographic) first. The old airlines project an image that my experience is incidental to their business.
I think the older airlines are stuck in many ways - the attitude towards customer experience is just as important as the business model, executive motivation, fees, or technology back end.
When was the last time your business evaluated what your customers really want?
When was the last time you thought about how well you're serving that need?
When was the last time you changed anything?