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JetBlue Gives You Less

by Lux Joseph 16. December 2014

Jetblue Airlines and Southwest airlines appear to be the only two US Carriers that still allow passengers to travel with one checked bag free of charge. For travelers, this is a luxury considering every other airline charges a fee for a checked bag and those rates van vary among carriers. But is Jetblue shifting their philosophy and joining the reins of their competitors by adding baggage fees to their products?
 
JetBlue Airways recently made the decision to charge for checked bags in the upcoming quarter after pressure from analysts advising them to align their fees with their competitors. When we asked our travel agent how he thinks this will affect passengers he stated, A lot of individuals still look to JetBlue and Southwest because of the first bag checked for free however, that is primarily your travelers who dont travel frequently. Most individuals who travel frequently have status with one or more of the airlines, or have a credit card that pays for the first checked bag to ultimately it will not affect them. The decision to charge for bag fees was not a single decision made by JetBlue Airways. This shift comes with other changes including fare structures, legroom in economy class, and plane configuration.
 
As mentioned earlier, these decisions were driven by a Wall Street viewpoint to increase the maximum revenue potential for JetBlue Airways. In regards to checked bags, JetBlue plans to introduce a fare structure that will be three tiered based on the number of bags the guest has. Similar to other airline programs, the higher fares offer more flexibility and increased number of frequent flier points to be earned. Just a small increase for the airline will drive approximately 65 million in additional revenue for 2015.
 
Along with the fare structure change, JetBlue is reconfiguring their airplanes to add additional seats. This is another attempt to add additional revenue to their sales portfolio. However, this will affect the customer experience with a decrease in seat pitch. JetBlues current seat pitch is 34.7 inches. However after the planes new configuration the seat pitch will decrease to 33.1. The average traveler may be disgruntled by this change, but JetBlue will still lead the industry with the largest seat pitch. On the A320s the increased number of seats will go to 165 whereas they could have increased it to 180. JetBlue believes in the customer experience, but also realizes its place in the industry. In the USA alone we have seen the number of major domestic carriers decrease year over year due to bankruptcy and mergers. JetBlue is attempting to find a medium between making the numbers profitable, and also meeting the needs of their customers.
 
When JetBlue Airways first introduced these changes, the first thought from consumers was negative, but that is because the change hasnt been fully processed by the traveler. They have decreased the seat pitch, but they are still ahead of all their competitors. They are beginning to charge for bags, but they still will have fares that include a first bag checked for free. JetBlue is leaving the decision up to the customer as to whether they add a fee to their flight or choose a fare in which it is included. These fares are scheduled to begin in early 2015.
 
Southwest will soon reign as the only USA carrier to include the first checked bag free of charge. While Southwest may see this as an opportunity to acquire a share of JetBlues customer’s who oppose the fee; it will be interesting to see if these changes actually shift customers to look at Southwest as their new carrier of choice. When travelers look for an airline ticket there are a variety of factors that are considered including fare cost, baggage fees, destinations, seat comfort, in-flight entertainment, etc. A small change like this may not mean a loss of business for JetBlue, but instead, additional revenue that was sitting on table.
 

 


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