American Air President: 'Don't Call Us Nickel and Dimers'

CHARLOTTE, N.C. (TheStreet) -- American Airlines (AAL) President Scott Kirby bristled when an airline analyst mentioned that some passengers view airlines as businesses that "nickel and dime" its customers.

"I hate the characterization of ancillary (revenue) as nickel and diming," Kirby said, speaking at the Wolfe Research airline investor conference earlier this week. "I don't think that's what it is."

As an example, Kirby said, "We spend more money carrying bags than we charge in bag fees ... we're not fully passing that on to the customers."

Kirby spoke after Wolfe Research analyst Hunter Keay questioned whether recent improvements in airline industry operational performance give carriers "more freedom to experiment with what (customers) would refer to as 'nickel and diming.'"

The widespread belief of the airline industry is that what customers most desire is on-time performance, not only because they arrive when they expect to but also because on-time performance leads to better baggage handling, fewer missed connections and an overall better experience. In 2012, nearly 82% of all U.S. flights arrived on time, the best total since 2003. The number slipped back to 78% in 2013 as a result of sequestration and bad weather.

Meanwhile, airlines are under assault in some quarters for a reliance on ancillary fees, primarily for checked baggage but also for seat selection and making flight changes after tickets are purchased.

Keay asked whether "running a good operation allows you to take more chances on the ancillary side" and "whether overall complaints about the concept of nickel and diming" have been declining.

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