JetBlue Reluctantly Considers Basic Economy, Apparently Under Pressure

by Chris Dong

JetBlue is joining the basic economy bandwagon. In an open letter to employees, JetBlue President and COO, Joanna Geraghty announced the introduction of a fare below standard economy, or what JetBlue now calls “Blue” fares. It will be here by late 2019, though we don’t really know what a basic economy fare will mean on JetBlue, which still promises free wi-fi and seat selection to all passengers.

Inspiring Humanity in a World of Basic Economy

“Later next year, we’ll evolve our current fare options (Blue, Blue Plus, Blue Flex) to give Customers the choices they want. This will attract ultra-low-fare seekers to JetBlue, where we can take better care of them than other airlines do. We’ll have options for the many Customers who shop on experience and loyalty too.”

The letter, as posted on the airline’s blog, goes on to use the word “Humanity” five times.

The new basic economy option will compete with bigger rivals like Delta, American, and United who have implemented this new class of service in recent years. As we’ve written before, Basic Economy has allowed full service airlnes to appear in search results alongside low-cost carriers (including JetBlue), while forcing business flyers to pay up to higher fare categories in order to enjoy full benefits. (See: Basic Economy Is Helping Airlines Squeeze More Cash From Passengers).

It appears JetBlue is feeling the squeeze. Geraghty’s letter is reluctant at times, and doesn’t exactly inspire confidence in the financial picture:

“At JetBlue, we never liked the “no frills” approach. But with these competitors now offering basic economy on many routes we fly, Customer behavior suggests our success is at risk if we do not disrupt this market by lowering fares without sacrificing the experience.”

Citi ThankYou Reserve to JetBlue transfer points

Will the JetBlue in-flight experience suffer with the introduction of basic economy? Or will the airline be forced to lower fares at expense.

While Garaghty’s announcement is vague, expect to see similar basic economy features that include no ticket changes and limited mileage earning. The letter sent out Friday specifically says that the airline won’t restrict seat selection and won’t restrict carry-on bags. That might make it difficult for JetBlue to convince most casual flyers to upgrade to a blue fare.

It really wasn’t that long ago when JetBlue charged few fees at all. The airline didn’t start charging checked bag fees until July 2015, which prompted a revision of their fare structure: “Blue”, “Blue Plus”, and “Blue Flex.”

JetBlue's current fare options listed on their website.

JetBlue’s current fare options listed on their website.

Checked bag notwithstanding, there’s currently very little to differentiate between “Blue” and “Blue Plus.” Indeed, today’s announcement hinted that there won’t be an additional fourth fare option. Instead, three will remain with “Blue Plus and Blue Flex” being combined into a new tier.

New JetBlue fare options are coming soon

New JetBlue fare options are coming soon. Names haven’t been branded yet.

The Upshot

This announcement comes on the heels of JetBlue’s increased checked bag fee to $30, a controversial move that sparked increases across all the major US airlines. And with shaky financials the last several quarters, it’s been a volatile time for this NYC based airline. 

It will be interesting to see how JetBlue plans to implement basic economy. I can’t imagine they will make the basic economy experience as hated as it is on the legacies. JetBlue’s reputation is driven by a product and experience that’s been slightly better than its competitors. 

Still, since JetBlue brands itself as a more customer-centric organization, I am saddened to see yet another airline introduce this decade’s most hated airline product: basic economy.

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