JetBlue Fights Discounters With No-Frill Option in Fare Overhaul

(Bloomberg) -- JetBlue Airways Corp., bowing to rising competitive pressures, began offering a no-frills option in the first revamp of its fare categories since they were introduced in 2015.

Customers buying a reduced Blue Basic fare won’t get a refund if they have to cancel, can’t make changes to the reservation and will have to board last -- standards that match other airlines for the category. There are no extra fees for a carry-on bag and one personal item.

JetBlue is feeling pressure from ultra-discounters such as Spirit Airlines Inc. and Frontier Airlines, as well as from larger carriers like Delta Air Lines Inc. and American Airlines Group Inc. that adopted the reduced, no-extras basic fares several years ago to keep from losing customers to less-expensive rivals.

“Over the last few years, it’s become very clear this no-frills basic economy segment has become a larger and larger set of customers,” Dave Clark, JetBlue’s vice president of sales and revenue management, said in an interview. “Not having that offering, we couldn’t compete effectively.”

Blue Basic also will give JetBlue the tools to “more aggressively” drive fares lower, said JetBlue President Joanna Geraghty. The carrier, which plans to begin trans-Atlantic flights in 2021, hasn’t decided whether to offer Blue Basic on that service, she said.

In contrast to competitors, the Basic Blue fare will allow passengers to select a seat 24 hours before a flight at no charge. They also will receive the normal on-board amenities like seat-back entertainment screens and free Wi-Fi.

JetBlue offers “bundled” fare categories where the price rises along with the number of options it includes, like free carry-on bags, loyalty points, boarding position and more leg room. The airline will retain its existing Blue fare category, and a new option named Blue Extra will replace Blue Flex, with lower fares, more flexibility to change or cancel reservations and early boarding. A category dubbed Blue Plus will be offered only in limited international markets.

Blue Basic fares went on sale Tuesday on a few routes, including Fort Lauderdale, Florida, to Nassau, Bahamas, while Blue Extra debuted on most of JetBlue’s network. Availability will be expanded over the next two months, Geraghty said.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Tony Robinson

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