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JetBlue is intent on increasing its fee revenue, but if it ultimately decides to offer free Wi-Fi on its flights on an ongoing basis, that would certainly be a development that other airlines will have to pay attention to.
As JetBlue gets set to install satellite-based Wi-Fi on its first aircraft, it is considering a game-changing move — making it available to passengers for free beyond the initial promotional period.
JetBlue has been slow in joining the Wi-Fi parade, and as it readies its first installations of Ka-band-based Wi-Fi from ViaSat in the next few months, JetBlue CEO Dave Barger notes that the Wi-Fi will be free on the first 30 A320 aircraft.
That had been previously announced.
But, kicking off the The J.P. Morgan Aviation, Transportation & Defense Conference today, Barger held out hope that the promotional free-Wi-Fi pricing could become permanent. Says Barger:
“In essence, the entire aircraft will have the enjoyment of Wi-Fi should they decide to participate with the product, which we announced would be free for the first 30 aircraft that we install across the A320 fleet. And we’re evaluating pricing into the future, including keeping it free, and so we’ll see how that plays out.”
JetBlue’s first checked bags are free, and making its satellite-based Wi-Fi free would certainly be a differentiator from other airlines.
Southwest Airlines, for example, has picked up market share with its Bags Fly Free campaign, allowing two free checked bags, but Southwest just raised its Wi-Fi rates to $8 per device.
Fees from bag-fee forgiving airlines
Even if JetBlue decides to keep on-board Wi-Fi free, you’d be wrong in thinking it doesn’t have big plans in raising ancillary revenue.
In fact, Barger told attendees at the conference that JetBlue is targeting a 10% to 15% jump in ancillary revenue in 2013.
Barger believes JetBlue’s Even More and Even More Speed products, which offer additional legroom and expedited screening, respectively, are different than those offered by some fee-gouging airlines (i.e. Spirit).
“And again, as you hopefully know from a JetBlue perspective, we’re really not about nickel and diming,” Barger says. “We’re really about here is the core product and how do you purchase up. And I think people really appreciate the fact that it’s — the product or the living space on the aircraft is something that people will pay a premium for and we’ve certainly seen that.”
Cozying up to the new American Airlines
In other news, Barger says JetBlue is seeking to upgrade the airline’s interline relationship with American Airlines, and a post-merger new American Airlines, with US Airways in the fold, particularly at JFK.
Barger says JetBlue currently connects 26 of its markets to 15 of American Airlines’ international markets in the interline partnership.
“And, as we look at mainly our route system and deployment of ASMs, I think opportunities that may exist in the New York Metropolitan area for the most part,” Barger says. “I mean American-U.S. Airways is pretty sizable when you put that together in a place like Boston. And in fact even the Caribbean now too, not just across Miami but Charlotte and of course, the transcons as well.”
As the legacy airline landscape changes with the pending US Airways-American Airlines tie-up, JetBlue is looking to take advantage of new possibilities.