People still fly on airlines and air travel is still popular. Some people probably don't notice the little charges that add up eventually. However, that strategy has to have a cumulative effect on the economy and on consumers at some point. Airlines or passengers or both will have to adapt if they want to maintain the status quo.
Yes, I do think that it is working a lot, and that they are making a huge amount of money off of the people that are flying today. I think that they are very smart in the way that they are doing all of this, and that they make alot.
No, I do not think that the nickel and dime strategy implemented by airlines is working, because it is hard to navigate through a flight without knowing what I am about to be charged for next. You are even charged to select a seat, as if you are going to have to stand if you choose not to select one.
Most of the people that I know fly with Southwest because they don't charge for bags and there are not a whole lot of fees that they tack on. It must work for some airlines because they keep doing it, but the majority of my friends pick Southwest because they don't.
The only thing this is accomplishing is making people angry that they have to pay more and more for less and less. Airlines used to provide food with the purchase of a ticket, refunds, and would change ticket dates free of charge. As well as not charging for baggage. Now they try to basically rob you.