The worst fears of JetBlue loyalists were confirmed today in a news release distributed in advance of the company’s Wednesday investors conference.
The airline has been under pressure from Wall Street for months to boost its bottom line and, ultimately, its stock price. That, industry analysts have long contended, is easily accomplished with just two moves. First, increase so-called ancillary revenues by imposing fees for checked bags. And second, increase the revenue potential of every flight by adding more seats on every plane.
As one of only two airlines not charging for checked bags (Southwest is the other), and a carrier lauded for its extra-generous coach legroom, such profit-maximizing changes would fly in the face of everything JetBlue has come to stand for.
But as today’s announcement, headlined “JetBlue Outlines Plan to Drive Shareholder Returns Through Differentiated Product and Service,” makes clear, diluting the company’s brand equity is a small price to pay for higher profit margins.
The fee for checked bags will be folded into the airline’s new three-tiered pricing structure (think Southwest’s Business Select, Anytime, and Wanna Get Away fares), set to debut in mid-2015. The two more expensive fare types will come bundled with a free checked bag; the cheapest will require a surcharge to check bags.
No word yet on the dollar amount of the bag fees, but the industry standard is $25.
JetBlue currently boasts 34 inches between most coach seats on its A320 aircraft. Beginning in mid-2016, those planes will be reconfigured to accommodate an extra 15 seats, squeezing legroom down to 33 inches.
A statement rationalizing the moves from Robin Hayes, JetBlue’s president, is notably disingenuous: “We believe the plan laid out today benefits our three key stakeholders. It delivers improved, sustainable profitability for our investors, the best travel experience for our customers and ensures a strong, healthy company for our crewmembers.” Investors and JetBlue employees may indeed be well served by the changes. The company’s share price spiked by more than 2 percent following the announcement. But to claim that higher fees and less legroom benefit JetBlue flyers is astonishingly at odds with reality.
Reader Reality Check
This isn’t your father’s JetBlue. Will it be yours?
This article originally appeared on FrequentFlier.com.
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