JetBlue’s cost to check a bag has increased $5, going from $25 to $30 for your first bag, and $40 for your second (also a $5 increase). United Airlines has followed suit as well– charging a similar $30 for the first bag, and $40 for the second–their change went into effect August 31.
Surely a company like JetBlue, which quite clearly has capable leadership–capable enough to keep the airline highest in customer satisfaction for 12 straight years (Southwest has now unseated them, but JetBlue hangs tight to 2nd place)–wouldn’t do something like this lightly.
The cause? Fuel prices are spiking.
You would imagine that they’ve run every possible scenario through various algorithms and concluded that raising baggage prices was the most logical option. And yes, something had to be done, because rising fuel prices over the last year have cut heavily into airline profits.
As such, airlines are trying to rapidly figure out how to increase revenue while cutting expenses.
Doug Mcgraw, Vice President, Corporate Communications at JetBlue, said, “We routinely review and adjust our ancillary pricing to ensure a healthy business so we can continue offering the best customer experience of any U.S. airline.”
This definitely bodes problematic for those like Southwest and their infamous ‘bags fly free’ tagline. However, that isn’t stopping them from trying to find creative, ancillary techniques to drive top-line increases and recently announced that they are increasing the price of their EarlyBird boarding fee as much as $10 (depending on your route).
Is there a hidden genius here, or is it just a last resort?
Maybe they’re banking on the price increases being offset by their faithful frequent fliers– JetBlue also has the highest-rated loyalty program among U.S. airlines.
Still, this seems like a risky tactic. Once upon a time, we liked to say that ‘any press is good press’. But that just doesn’t ring true anymore.
No matter what amount of positive reputation JetBlue has garnered in the past, it doesn’t make them invincible to the power of bad headlines, especially when you’re a first mover of something that has to do with price hikes. And if you want to know how to get those, vaulting yourself to the top of a price list for something nobody actually likes paying for is certainly one way–even if United, WestJet, and Air Canada have all raised their prices as well.
The truth is, it’s very rare that you’d want to have the highest price for anything, especially when your biggest competitor is offering the exact same thing for free.
A move like this shows that JetBlue has been painted into a corner and, and instead of waiting it out, they’re tracking through the wet stuff and making a media mess. Guess we’ll see what it looks like when it dries.