JetBlue’s CEO Doesn’t Want To Increase Fares – So He’s Increased Fees Instead!
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JetBlue is known for being one of the most consumer-conscious airlines around. They also have a highly-rated loyalty program and often run great fare sales and promotions.
Unfortunately, they recently caved on their pricing and have raised the cost on checked bags. While that news isn’t horribly alarming, it is a trend that all the major US airlines are jumping on. And in the past few months, airlines such as Southwest and United have announced price increases for other services like Early-Bird Check-In and seat selection.
JetBlue CEO Robin Hayes recently announced that he doesn’t want to increase fares. So instead, JetBlue is raising the cost of checking a bag.
The first question in my mind is “why are they doing this?” The main reason for rising any sort of cost is typically for higher cost of materials. Jet fuel is up over 33% this year. Along with that, there is an incredible shortage of pilots right now, only adding to difficulties.
However, I feel that this type of pricing tactic is very similar to resort fees. The frustration is as a consumer, you are expecting to pay $200 for that round-trip airfare, and then it turns into $275 after checked bags, taxes, and fees.
This is a tactic commonly known as partitioned pricing. Airlines want to remain competitive on the “front end,” but end up making a large amount of revenue on the “back end.” In my eyes, it is a very questionable business practice.
As frustrating as these fees are, it does make the free checked bag benefit offered by some credit cards a bit more valuable. But knowing that airlines are adopting the partitioned pricing model is concerning. All we can do is be weary as consumers…a little frustrated too!
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