JetBlue cutting legroom, adding checked-bags fee for some fliers
Free checked bags on airlines are not extinct, but soon they will be harder to find.
To boost revenue, JetBlue Airways announced plans Wednesday to eliminate free checked bags for its lowest fares and squeeze the legroom on most of its planes.
Those changes and others to be adopted by 2017 are expected to generate more than $400 million annually. That leaves Southwest Airlines as the only U.S. carrier to offer free checked bags to all its passengers.
New York-based JetBlue announced the move one month after reporting record third-quarter revenue of $1.5 billion. Net income for the three months that ended in September was $79 million, or 24 cents per share, compared with $71 million, or 21 cents, a year earlier.
“As we execute this plan and continue to grow, we also seek to drive significantly improved returns for our shareholders,” said Mark Powers, JetBlue’s chief financial officer.
The moves may be in response to pressure from Wall Street analysts and investors to generate more revenue at a time of growing demand and slumping fuel costs. That same pressure may have forced JetBlue Chief Executive David Barger to announce in September plans to step down. He will be replaced by company President Robin Hayes.
The response on social media from JetBlue fliers was mostly negative.
"@JetBlue used to be my airline of choice b/c of their focus on customer service,” New York resident Maryann Kuriakose wrote on JetBlue’s Twitter page. “Now, they’re just another airline focused on making $$$.”
If JetBlue continues to keep fares low, industry analysts say, few passengers will abandon the carrier.
“The core JetBlue loyalists will be disappointed, but I don’t think there will be a drop in passengers,” said Jay Sorensen, president of IdeaWorksCompany, an airline consultant on ancillary fees.
Starting early next year, the company announced, customers will have a choice of three “fare bundle options,” one of which will not include JetBlue’s signature “first bag free” promise. The other two fare options will allow customers to check one and two bags for free, respectively.
Dallas-based Southwest still offers the first two checked bags for free for all passengers.
Customers can say goodbye to JetBlue’s free Wi-Fi Internet service too. The company plans to start charging for in-flight Wi-Fi in the second half of 2015, but details have yet to be announced.
The airline is also delaying the delivery of 18 new aircraft, scheduled to arrive in 2016, by at least six years, cutting capital expenses by more than $900 million. JetBlue said it would instead “refresh” its existing fleet.
JetBlue plans to pack in more seats during the redesign, dropping legroom from its current 34-inch pitch to 32 inches for economy seats on the carrier’s A320 jets, said Tamara Young, a spokeswoman for the airline. The retrofit will also add larger seat-back screens and more entertainment options for customers, the company said.
The company also plans to ramp up its Mint service, a premium fare that includes lie-flat seats that debuted this year. JetBlue says it will add more flights with the service on the two existing routes from John F. Kennedy International to Los Angeles International and JFK to San Francisco International.
JetBlue shares rose 52 cents, or 4%, to $13.24.
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