Newsletter: Some pricing trickery from JetBlue
I’m Business columnist David Lazarus, with a look today at airline baggage fees. Or, more broadly, nickel-and-dime fees in general.
JetBlue Airways last week said it was jacking up its baggage fees for the second time in two years (thanks, guys!).
Your first checked bag will now cost $35, up from $30. A second checked bag will run a hefty $45, up from $40.
But what’s really beautiful here is that the airline is spinning the price hikes as a boon to travelers. Because JetBlue is offering a $5 discount for checking bags online, it says this will do wonders for relieving congestion at airport ticket counters.
The higher fees will “reduce transactions in the airport lobby and improve the Customer experience,” the carrier said in a memo to employees.
It also said that “we are changing our fee structure to give Customers extra motivation to use those self-service tools, while at the same time increasing revenue for JetBlue even as we keep our base fares low.”
OK, let’s pick all that apart.
First, higher fees may be a plus for consumers in some parallel universe. But on this plane of existence, they’re almost always just another way for businesses to boost their bottom line.
Second, higher online fees don’t “improve the Customer experience.” You’ll still have to check in your bags at the airport. The only difference is you won’t need to take out your credit card again. Big wow.
Lastly, JetBlue is getting closer to the truth when it admits the higher baggage fees increase revenue “even as we keep our base fare low.” That’s the whole game — tricking people into thinking they’re getting a good deal when in fact the overall cost is up.
As I’ve noted previously, this racket of base prices and add-on fees — a common practice among airlines, telecom companies, hotels and restaurants — is designed to prevent consumers from making apples-to-apples comparisons when shopping around.
It allows businesses to maintain the fiction that they’re offering reasonable prices when in reality they’re reaching as deep as they can into customers’ pockets.
The solution is for businesses to offer a single, all-inclusive price for goods and services.
That’s how they do it across the Atlantic. The European Union says consumers “have to be clearly informed about the total price, including all taxes and additional charges.” In other words, the price you see listed is the price you pay.
Compare that with JetBlue’s approach, which is to promote a deceptively low base price and then smack travelers upside the head with sky-high extra fees (see: $45 for a second bag). Phone and cable companies routinely play the same obnoxious game.
Nobody begrudges companies making a fair profit. If a price hike is warranted, so be it. Explain why people are being asked to pay more and move on.
But don’t act as if you’re doing customers a favor. That’s cowardice at best. Fraud at worst.
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For our friends at JetBlue, some songs about sleight of hand. The Steve Miller Band weighs in with a little hey-presto. Santana wants you to meet a black magic woman. This one from Pilot is cheesy but fun. But my top picks are from Screamin’ Jay Hawkins and the Lovin’ Spoonful.
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