So far, it would seem, WN is clearly LOSING the fee wars. The other airlines have seen absolutely no decrease in demand -- even US, which has the odious "no free water" policy now. Indeed, it is WN's traffic that has looked the weakest, and is the reason why WN recently cut its winter schedule rather significantly. So the reality is that WN's competitors are raking in the extra money (fee income is substantial: CO estimates the $15 bag fee is worth $100 million), while WN gets nothing (and indeed is spending lots of money advertising its no-fee virtues).

This is not to say the strategy won't EVENTUALLY work. I mean, how pleased are you going to be when you get hit up two bucks for water? Clearly, at some level, customers should recognize the value of the free benefits, and the true costs of flying an airline with a la carte pricing (of course WN's advertising exagerates these costs -- most customers will simply forego the services they don't want to pay for).

But whether the forgone revenue at least equals the additional revenue from new happy passengers -- well, I guess we'll have to wait and see. If WN eventually institutes some fees, we'll know it didn't (and I wouldn't expect WN to give up for quite some time).