JetBlue First Checked Bag Fee Added

JetBlue has just announced that they’re introducing a new tiered fare structure, which essentially amounts to them adding a first checked bag. Up until now, JetBlue was one of only two US carriers (the other being Southwest) which didn’t charge for the first checked bag.

Here’s what JetBlue’s new fare structure looks like:

JetBlue-Checked-Bag-Fee

As you can see, JetBlue is introducing Blue, Blue Plus, and Blue Flex fares. There are some differences between the fare categorizations, though the most major difference is that Blue fares no longer include a free checked bag.

Under the new fare structure, on a Blue fare the cost of checked bags is as follows:

  • $20 for the first checked bag when purchased during web check-in or at a kiosk
  • $25 for the first checked bag when purchased at a check-in counter
  • $35 for the second checked bag

What’s interesting to note, however, is how minor the fare difference sometimes is between Blue and Blue Plus fares. For example, taking a random flight between Tampa and New York, a Blue Plus fare is $14 more than a Blue fare.

JetBlue-Blue-Plus

JetBlue is taking a brilliant approach here, in my opinion. If you know for sure you’re going to check a bag, then a Blue Plus fare represents a good value. However, they probably know enough people will purchase Blue Plus fares and then not end up checking bags, to the point that this makes sense, even if they’re hoping to generate an average of $20-25 per bag.

None of this comes as a surprise, given that last November JetBlue announced to investors their intent to add checked bag fees as of the first half of the year, and to also add more seats to planes. While airlines are already profitable, they’re under pressure from investors to maximize profits, and there’s no denying that JetBlue has had a differentiated product, without really charging much of a premium. Given how full planes are, it pays to add seats…

JetBlue

Skift has an interesting article about the changes, including an interview with Marty St. George, JetBlue’s EVP of commercial and planning. There are quite a few interesting quotes in the article, though I guess the overall message I take away is as follows:

  • The reason it has taken JetBlue so long to introduce checked bag fees is because of the back end IT involved; if it weren’t for that, these fees would have been introduced earlier
  • JetBlue thinks they still offer a differentiated product, the best in the US, even with the addition of these new fare tiers
  • JetBlue really wants to incentivize people to buy the higher fare tiers, which is why the price differences are quite minimal, and why the benefits offered with them go beyond checked bag fees

JetBlue-1

Bottom line

This move hardly comes as a surprise, as US airlines are recording record profits and also record load factors. The pressure from investors isn’t just to be profitable, but to be more profitable. And as far as adding checked bag fees goes, I think JetBlue is going about it pretty smart here by adding fare tiers which actually potentially add value.

Will JetBlue no longer offering a first checked bag free on “basic” fares impact your decision to fly them?

(Tip of the hat to View from the Wing)

Comments

  1. «The pressure from investors isn’t just to be profitable, but to be more profitable»

    this is the single idea that makes me hate wall street so much. the airline is profitable and has a great customer care, but that’s not enough: they have to make things worse for passengers in order to have a dollar increase in shares.

    I don’t remember where I read it, but there was an article published just shy of the announcements made by JetBlue slamming this idea, and I could’t agree more. for wall street, it’s literally f… the customers: your life has to be miserable in order for us to win some.

    too bad JetBlue fell for that.

  2. When you book with points, do you get the option to use more or less points for the different tiers?

  3. Regarding the Blue Plus fare being cheaper than checking a bag, the same happened to me while flying Germanwings CGN-PRG in May.
    Checking a bag was more expensive than going with their *business class* (of sorts), so we got the nicer product with more legroom, a meal, a drink and even lounge access thanks to my supporting LH FTL card. 😀 (FTL alone = no access, FTL plus 4U business = access)

  4. @Chico Luz smart wall street people won’t really invest in airlines, like Warren Buffett.
    If you know how much money investor lost in investing airlines several years ago, you will have some sympathy.
    Investors are under lots of pressure because they simply lost too much money in bad years for investing in airlines, do you know airline ticket prices fell 50% in 30 years while oil prices increased more than 50% in 30 years?
    More importantly, US airlines fight on their own, without supports from big government like Emirates. Also, unlike Korean Air, Cathay Pacific, Singapore Airlines, Japan Airlines and many other airlines made profits through connecting traffics, US airlines, however, do not have such opportunities because of geolocation of most US airports.
    US airlines work hard to pay back their investors. Also, US airlines created millions of job opportunities and are avid supporter of veterans and minorities groups. Have seen any airlines other than US airlines took social responsibility and hire many minorities groups? (Not Emirates, not Cathay Pacific, not Japan Airlines because they discriminate many minorities groups like transgenders. )
    And now, after helped so many people, it is time to get more profits US airlines deserved.

  5. The only thing that surprises me about this is that they did not include the “Even More Space” extra legroom seats for free in the Blue Flex package.

  6. @Foid

    You are forgetting a not so tiny fact when you list that whole list of non-us airlines, none of them can fly domestically in the US which is the largest domestic marked in the world.

    Even if the US3 are driven totally out of the international marked, they would still be among the largest in the world.

    What probably drives a lot of JetBlue’s traffic is a offering better service and more space, take that away and why would the customers fly continue to fly Jetblue? Take gun, aim at foot, pull trigger WallStreet?

    If they did not like the Jetblue’s strategy for running the company why did they invest in the company instead of Alligent or Spirit? It’s like buying into a higher end restaurant chain and then insist they become McDonald’s.

  7. @Foid

    US airlines actually did not pay back their investors during the lean years, they went through bankruptcies and generally the stockholders got very little. The debt holders picked up a lot of the equity and did ok given the rebound in recent years.

    The subsidies thing is a complete sham by the US3. They have been the beneficiaries of huge amounts of US federal, state, and local government subsidies, indirect facilities subsidies at their fortress hubs, lower fees through tax advantaged municipal bond financings of airports, Justice Dept allowing oligoloplistic mergers and anticompetitive behavior (“pricing and capacity discipline” comments are clear signaling by any antitrust definition), US bankruptcy law advantages over other countries. And they target the ME3, while ignoring their Chinese, Saudi Arabian, Russian, Indian, etc partners, who conveniently show no interest in competing with them on the lucrative transatlantic routes previously carved up by anticompetitive joint ventures. I would go on, but I think VFTW has covered this stuff pretty well.

    As far as minorities/veterans/disabled, I’m not well informed about them vs other airlines, so no comment there.

  8. I’m disappointed by this change, not just because the tiers make comparing fares between airlines more difficult, but because it represents further surrender on JetBlue’s part to the Wall Street short-term mentality.

    I do think this diminishes the product differentiation between JetBlue and the Big Three (and the basic service airlines like Spirit), although JetBlue still has the best seat pitch for regular coach seats, and from what I’ve read their version of the slimline seats are more comfortable (or less uncomfortable, take your pick) than those used by other carriers.

    But I can’t help but think that getting the message out that Blue with a bag fee, or Blue Plus, is still competitive with Southwest isn’t going to be easy and could particularly hurt them on the Northeast-to-Florida market, and especially with the cruise passenger market, virtually all of whom check a bag (and most check two.)

  9. And now JetBlue boarding will be like Delta/AA/United where they run out of bag space on almost every flight and have to gate check

  10. I knew this was coming, but was hoping they’d come up with something better or at least partially lower some of their base fares (news flash: they didn’t- literally buying your ticket today vs. yesterday means you just get less.)

    I’m also bummed there’s no waiver for card holders.

  11. Chico, great comment, you took the words out of my mouth.

    Wall St vermin hounded this company for years over the fact that they weren’t charging a checked bag fee and that they were providing too much room for the cattle…er…passengers. The race to the bottom in this once great country continues unabated. USA, of, by & for the corporations.

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