How American Airlines Saved $40,000 One Olive At A Time
This isn’t exactly new but it was new to me so I thought I would share it assuming that it is new to some of you. And with airlines hemorrhaging money during this pandemic I think there will be a few stories shared like this 30 years from now too! This is the story of how American Airlines saved $40,000 one olive at a time and some other interesting cost cutting measures by airlines.
Update 1/9/21: There is a new cost savings story from United Airlines that needed to be added to the list. Added below.
It was the 1980’s and Robert Crandall was the head of American Airlines. He was famous for being very stingy and cutting costs wherever he could. One such story of him replacing security guards with a tape of a dog barking have been shared numerous times. Then one day he had a simple idea, what if we removed one olive from every salad on board? Passengers wouldn’t care and it would save the airline money, but how much? It saved more than I would have thought, to the tune of $40,000 that year. Who knew something so small could save so much?
Live and Let’s Fly broke a story a few weeks back about a new cost savings measure from United Airlines. There was a memo sent around to flight attendants that there will no longer be cocktail sticks for drink service. You know those little things that go through a lime wedge before they are plunked into your drink. The things that are completely useless and don’t have the aesthetic appeal of a cocktail umbrella. The lime will still make its way into the drink but without that small stick of plastic attached and the savings will add up. United estimates the savings will be around $80,000 per year. I expect more stories like this to roll out as we continue to see record low air travel from the pandemic.
Before Northwest Airlines merged with Delta they noticed that they were saving $500,000 a year compared to Delta by cutting their limes differently. Northwest was cutting their limes into 16 pieces for soft drinks and mixed drinks while Delta was only cutting them into 10 pieces. That simple adjustment meant they had to buy over 60% less limes compared to Delta, a savings of half a million dollars a year.
Delta decided to continue cutting their limes into 10 pieces after the merger but they realized they were carrying too many limes on each flight. By carrying less limes they were able to better control waste and reduce their costs that way.
The cheapest airline out there has to have an interesting cost cutting story right? I mean they were considering charging passengers to use the bathroom at one point! Ryanair does not disappoint with a few of their money saving schemes.
- They removed 2 of the 3 toilets on their aircraft to fit additional seats.
- They enforce weight limits on their flight attendants to save on fuel costs. How much it actually saves, no one knows.
Ryanair has thrown out some other crazy ideas in the past that didn’t pass the smell test. Things like removing the armrests on planes and having standing room only seats in the back of the plane. I imagine they will continue to come up with “inventive” cost saving ideas on top of hitting up their passengers with every fee imaginable.
In 2008 Air Canada’s regional carrier Jazz removed life jackets from their planes. They replaced them with personal flotation devices to cut down on extra weight and save on fuel costs. This was given an okay by the Canadian government if they stayed within 50 nautical miles of shore during the flight.
These are some fun and interesting cost saving measures (well some of them at least). And the savings really stack up, a lot more than I would have expected. When removing one olive from a salad or cutting a lime a different way equals 10’s to 100’s of thousands of dollars in savings, that is kind of insane. I imagine similar measures will be taken in the coming months and years. It will be an uphill battle to get these airlines back to profitability.
What is the crazies cost cutting measure you have seen an airline take? What are some ideas you think will be implemented in the future?