The airline will soon have a new lower-priced base fare intended to help it compete with ultra-low-cost carriers and basic economy class.
JetBlue is hoping it can attract increasingly cost-conscious passengers with a new lower base fare that it will be launching next year. Customers who book this lower-fare class will opt out of things like higher priority boarding or choice seating assignments, but will still get traditional JetBlue inclusions, such as carry-on bags and in-flight snacks.
The move is intended to help JetBlue better compete with budget carriers and the major airlines’ basic economy fares.
“Ultra-low-cost carriers and basic economy options created a big market for bare-bones fares, and internet comparison sites encouraged more people to shop solely on price,” stated JetBlue’s president and COO, Joanna Geraghty, in a letter announcing the new fare plan to crewmembers.
“Customer behavior suggests our success is at risk if we do not disrupt this market by lowering fares without sacrificing the experience,” wrote Geraghty.
The letter stated that the lower fares will have some limitations, which might include things like boarding order, seating assignments, and flight change or cancelation flexibility. But it also stated that customers who book them will still get the standard services JetBlue has become known for, such as free live TV and internet, complimentary snacks and soft drinks, and carry-on bags.
According to Samuel Engel, senior vice president and head of the aviation group at consulting firm ICF, JetBlue’s move comes after Spirit and Frontier have disrupted the market over the past few years with their stripped-down base fares. That downward pricing pressure ultimately resulted in the major legacy carriers, including Delta, United, and American Airlines, having all added lower-priced basic economy fares over the past couple years (fares that come in below standard economy prices and that have reduced services such as non-priority boarding and limited flight change options).
The basic economy fares that major carriers have rolled out in response to the budget airlines’ bargain-basement prices have “really helped them compete,” said Engel. “They have seen it increase revenue.” And, he added, JetBlue has watched this play out in the marketplace and is realizing it is time to get in on the lower base fare game.
While JetBlue runs attractive seasonal sales and offers relatively competitive airfares, the carrier has not been considered a true low-fare airline for some time now when compared with budget carriers like Spirit or Frontier, according to airline industry analyst and consultant Robert Mann. JetBlue’s current lowest fare tier isn’t competitive with those carriers and “hence may not be a choice for price-seeking customers,” said Mann.
Currently, JetBlue offers three fare options: Blue, Blue Plus, and Blue Flex (not including its business class offering, Mint). With a Blue fare no checked bag is included, with Blue Plus one checked bag is included, and with Blue Flex two checked bags are included. There is also no change fee with Blue Flex bookings, and TrueBlue members get bonus miles when they book Blue Plus or Blue Flex fares online. However, very few customers book the Blue Flex option, according to Geraghty.
While the new lower-priced fares are intended to make JetBlue an even more competitive option for cost-conscious consumers, the airline also kicked off an avalanche of baggage fee increases across the U.S. airline industry this summer that now makes it more costly to check bags domestically on most carriers. JetBlue was the first U.S. airline to announce in August that it would be increasing its first-checked-bag fee to $30 from $25 and its second-checked-bag fee to $40 from $35, a move that was mimicked by several other U.S. carriers.