Skift Take

At Skift, we know more than most that airlines are in business to maximize revenue. But $30 for one checked bag seems a little extreme, no? Let's hope other carriers don't match JetBlue.

Do better, JetBlue Airways.

On Monday, JetBlue — the airline that purportedly seeks to bring humanity back to travel — increased the charge for the first checked bag by $5, to $30, effective immediately. An airline spokesman told Bloomberg, “We constantly review and adjust our ancillary pricing to ensure a healthy business.”

I understand airlines exist to make money. They have shareholders who expect them to wring as much revenue from each passenger as possible. Passengers might prefer otherwise, but for the most part, the U.S. government does not regulate what they charge.

But this strikes me as a lazy and shortsighted move, and one that may hurt JetBlue’s brand. The airline has never led on revenue-producing strategy — it was the last among major carriers to charge for bags — so passengers trust it more than most airlines. Now, customers will be upset when they learn they’ll have to pay more for what was once free.

On bag fees, the industry often moves together. If its competitors don’t follow, JetBlue might walk it back. If other airlines also raise fees, JetBlue probably is calculating no one will remember which carrier raised prices first.

Still, I don’t think this is a smart move. Bag fees not only make customers angry, but they also don’t help an airline operationally. People try to cram more stuff into their carry-ons, and then they insist on wedging them in the bins, whether there’s room or not.

What do you think? Is this a smart move by JetBlue?

— Brian Sumers, Aviation Business Editor [[email protected], @briansumers]

Stories of the Week

United Airlines President on Turning Skeptics Into Believers: If there’s a knock on United President Scott Kirby, it’s that he tries so hard to increase revenue that he doesn’t care about passenger happiness. But in an interview last week, he told me revenue and happy customers go together. “In the long term, you can look at airlines like Southwest who’ve had a history of good customer experience and perception and they drive superior results,” he said.

U.S. Airlines Once Considered China a Potential Gold Mine. Not Anymore: China will come back for U.S. airlines at some point. I guarantee it. But now, carriers are struggling on marginal routes, and even though China is a protected market — both governments limit the number of flights between the countries — two U.S. airlines have decided to reduce flights. In recent months, American has said it will cut two China routes, while Hawaiian said it will stop flying one.

Icelandair Struggles Despite a Hot Local Tourism Market: Icelandair cut its revenue guidance again for this year, and the CEO resigned. Given that Iceland is a strong tourism market, and not a bad connecting spot between the United States and Europe, its airlines should be performing OK. But they’re not.

Air Canada Begins Using a New Way to Distribute Fares to Partners: Air Canada last week processed its first transaction via a new platform called NDC Exchange. Skift Travel Tech Editor Sean O’Neill explains the significance in this story.

Virgin Group Announces New Loyalty Program Powered by Virgin Atlantic: Virgin isn’t the exciting brand it was a couple of decades ago, but to some it probably retains cachet. Skift contributor Grant Martin has details on a new loyalty program Virgin Group plans to introduce soon.

Ryanair’s Latest Fee Targets Carry-Ons With Wheels: Here’s a bag fee that makes sense. Ryanair knows carry-on bags with fees pose an operational challenge, because they’re generally large and can only fit in overhead bins. Now, if passengers want to bring bags with wheels, they’re going to have to pay for priority boarding. Ryanair says the new system will speed boarding and lead to fewer delays, according to this Bloomberg piece. You can call it a cash grab. I call it smart business.

When Will Qantas Lose the Monopoly on Its Money-Making Routes? Does Virgin Australia still exist? Technically, the answer is yes. But it’s not much of a competitor to Qantas. In this column, Bloomberg’s David Fickling asks whether a new entrant eventually will seek to chip away at Qantas’ virtual monopoly. He makes a persuasive argument that Australia needs a new domestic airline.

John McCain Refused to Fly Nonstop Between Washington and Phoenix for Years. Here’s Why: There have been many tributes to former Arizona Senator John McCain this week, but this is the only one — as far as I know — dealing with airlines. USA Today tells us McCain refused to fly America West’s (and later US Airways’) nonstop fight from Washington Reagan to Phoenix because he didn’t want to be seen as benefiting from a flight he helped make happen. (Most West Coast flights are banned from Reagan, but McCain helped America West get an exemption in 2000.)

Contact Me

Skift Aviation Business Editor Brian Sumers [[email protected]] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.


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Tags: airline innovation report, bag fees, jetblue airways, Scott Kirby, united airlines

Photo credit: Passengers wait to speak to an agent at Boston's Logan International Airport. JetBlue has raised the fee for the first checked bag to $30. 120672 / 120672

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