Skift Take

JetBlue still allows a first bag for free, but other fees for seats with more legroom and Wi-Fi are a key part of its plan to increase profit margins.

JetBlue officials said the airline will begin equipping its aircraft with what it claims is super-fast satellite-based Wi-Fi within a few weeks, and 80% to 85% of its fleet, based on available seat miles, would be equipped with the ViaSat service by the end of 2014.

Robin Hayes, JetBlue’s chief commercial officer, said during the airline’s third quarter earnings call, that the service is in its final testing stage, has been certified, and that installation on A320s will begin within “a few weeks,” and the entire fleet will have the service in 2015.

CEO David Barger said the Wi-Fi will have a capacity of “12 mega-bytes per second per device,” and will be faster than other other domestic in-flight service.

“We believe this will become a game-changer for the in-flight Wi-Fi experience,” Barger said.

JetBlue hasn’t detailed pricing on its Wi-Fi service, but the airline is clearly looking to it as part of its formula to better its current 7% profit margin in 2014.

One analyst, pointing out that JetBlue’s profit margins trail most of its competitors, asked JetBlue officials how they intend to improve profit margins in 2014 given the fact that the benefits of its announced fleet restructuring would take several years to kick in.

In addition to growth in Boston, New York, Fort Lauderdale, and Latin America; increased passenger traffic from partnerships with Turkish Airlines, Emirates and Japan Airlines, and packaged travel initiatives, Barger pointed to increases in ancillary revenue, including its first Wi-Fi service and Even More Space seats, as growth drivers.

In the third quarter, JetBlue saw its ancillary revenue, driven by sales of Even More Space, increase 11%, or $21 per passenger, year over year.

CFO Mark Powers said JetBlue was on track to see its ancillary revenue grow 15% to $165 million in 2013.

Although it could begin Wi-Fi with some discounted introductory promotions, it doesn’t appear as though JetBlue’s Wi-Fi service will be flying free.


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Tags: fees, jetblue airways, wi-fi

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