JetBlue details new bag fees, which begin Tuesday

30 Jun 2015 | Author: | No comments yet »

Is JetBlue Selling Its Soul for a Bag Fee?.

It took seven years for us to get to this point, but there’s now only one major airline that doesn’t charge customers for the first checked bag – Southwest Airlines.

But those booking with JetBlue beginning Tuesday will chose from the following options: The cheapest fare, JetBlue’s “Blue” fares do not include checked bags. The new fee, disclosed in November after months of hints, leaves Southwest Airlines alone among large U.S. carriers in not charging for the cargo hold. It has also made some passengers and industry watchers wonder whether, at 15, JetBlue is already acting middle-aged. “The move to a we’ll-suck-less-than-the-other-guys approach is JetBlue at its most defensive, least disruptively innovative,” columnist Joe Brancatelli wrote in December. On top of the luggage fee, JetBlue will begin next year to add 15 seats to its 150-seat Airbus A320s, following an industry trend of “seat densification” to boost revenue.

The new, slimmer seats will reduce the space between rows from 34.7 inches to 33.1 in. across its A320 fleet, but it will still be the most generous allotment of legroom among U.S. airlines, JetBlue says. It’s all part of an effort under Chief Executive Officer Robin Hayes to improve the airline’s finances and show Wall Street that the company can be friendly to both air travelers and investors.

The second checked bag would cost $35. “Fare options will provide our customers the choice between three branded fares, with the first designed for customers we do not plan to check a bag,” JetBlue executive vice president Martin J. The bag fee, tighter seating, and additional revenue efforts are expected to bring in more than $450 million in operating income in 2019, when the cabin refits are finished, JetBlue told investors on releasing details of its plans in November. Those figures could be “somewhat understated,” partly reflecting conservatism, Morgan Stanley analyst Rajeev Lalwani wrote last week in a client report.

Bag fees collected during first quarter 2015, including fees for the third bag and beyond, oversized bags and bags that need special handling (in millions). Most customers assume by now that the fee is charged across the industry, which added a host of fees as airlines floundered during the financial crisis. “We do this research regularly, and we have seen a change over the years,” Marty St. JetBlue has been consistently profitable in recent years, but it hasn’t displayed the sort of return on invested capital Wall Street likes to see, partly because of a focus on expanding its network. The cabins feature lie-flat seats and other premium features and are available mostly on transcontinental routes to Los Angeles and San Francisco, and to a small number of Caribbean destinations.

U.S. airlines have been moving toward more fees and less legroom in the economy section, even as they have spent lavishly to make first class and business class cabins plusher. JetBlue has never competed on lowest price, assuming that people will spend a bit more for amenities such as free snacks, more space, live television and most recently, broadband Wi-Fi. “I will put this product up against any product in North America,” St. With most other carriers already charging for bags and certain perks, JetBlue’s new fare categories inch it it closer to the practices of most other big U.S. carriers. The company was surprised by the negative reaction—that an airline striving to restore “humanity” to air travel should be seen as just another nickel-and-dimer in an industry that is widely reviled. “Maybe we’re naive, but I was very surprised to get blasted like we did,” St.

And while JetBlue’s new Mint cabin may fly on only a handful of routes, it lets JetBlue sell lucrative premium seats between cities with lots of corporate and wealthy travelers. There will probably be a new round of lamentations, especially among “drama-loving” bloggers who “may , at least online, shrilly cite JetBlue’s actions as more proof of the end of civilization as we know it,” Henry Harteveldt, a travel analyst with Atmosphere Research Group, wrote on Monday in an e-mail. “An airline could find a cure for cancer and give everyone who wanted one a free kitten or puppy, and people would still be mad at it.”

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