Skift Take
As JetBlue makes carry-on bags free for all passengers, is United's isolated market positioning becoming increasingly untenable?
JetBlue is making a big change to its baggage policy. From September, the airline will allow all passengers — even those on its most restrictive ‘Blue Basic’ fare — to bring a carry-on bag for no extra charge.
The customer-friendly move applies to everyone traveling from September 6, regardless of when the ticket was purchased. Until that date, Blue Basic guests who don’t fall into one of the exempted categories, need to pay $65 for the first or second checked bag, and $180 for a third.
The policy change brings JetBlue in line with most of its peers. American, Delta, Southwest, and Alaska all allow ‘free’ carry-on bags, plus a smaller underseat personal item, across all fare categories.
United Goes it Alone
However, one very big name is missing from that list. JetBlue’s announcement leaves United Airlines as the only major U.S. network carrier to charge its Basic Economy passengers for a carry-on. While United has carve-outs for long-haul routes and select international services, a fee applies for domestic flights and many regional links.
United’s policy states: “Carry-on bags are not included unless you’re flying to Canada, South America, across the Atlantic or on an international flight across the Pacific.”
Its website advises that Basic Economy passengers “can prepay to check a bag or check a carry-on at [the] gate for the regular bag fee plus an additional $25.” United currently charges $35 for the first prepaid checked bag, rising to $40 when not booked in advance. In effect, this means a non-compliant bag could cost $65 to be checked at the gate.
JetBlue’s Premium Push
After a rough few years, JetBlue is hoping the changes will help it regain lost ground. The carrier’s attempts at growth — whether through the Northeast Alliance with American Airlines or its merger with Spirit Airlines — have been struck down in court. It’s also struggled with overcapacity in core markets and has pulled out of other cities altogether.
Speaking shortly after her appointment as JetBlue CEO earlier this year, Joanna Geraghty said the airline is “returning to the business fundamentals.”
“We’ve got to fully leverage our unique position in the market, and with three years of distractions associated with the NEA [Northeast Alliance] and associated with Spirit, we’ve got a lot of work to do to get JetBlue back to profitability,” Geraghty said in March.
In a statement on Wednesday, JetBlue President, Marty St. George described carry-on bags as “an important part of travel to customers.”
“When presented with a choice between JetBlue’s award-winning service and another carrier’s basic offering, we want JetBlue to be the easy winner… As flying becomes cheaper and more accessible for a spectrum of customers, a one-size-fits-all offering no longer works,” said St. George.
Despite the carry-on enhancements, Blue Basic customers will remain the final group to board and tickets are subject to cancellation fees that do not apply to other fare categories. Full details are available to view here.
What is United’s Strategy?
Being the only airline out of the ‘big five’ not to offer free carry-ons could seem counterproductive for United. When JetBlue’s change comes into effect on September 6, it will become an even clearer differentiator among price-conscious travelers.
However, despite the questionable optics, United could actually find strength in its relative isolation.
Keeping its Basic Economy product in its stripped-back form should allow United to compete more effectively on price. Put simply, passengers who don’t need a larger carry-on won’t be overpaying for the unused right to bring one on board. Those who do need one can fly with another airline or buy one of United’s less restrictive fare options. It remains to be seen if this strategy will pay off in the long run.
Skift has approached United Airlines for comment.
Are U.S. Airlines Getting Friendlier?
Come September, United will find itself squeezed on two fronts. Along with all of its more upscale counterparts offering complimentary carry-ons as standard, even ‘ultra-low-cost airlines’ are making big customer service improvements.
Last month, Frontier announced significant changes to its fare structure and removed change fees for most of its fare classes. The Denver-based operator said the moves were part of a wider program which it billed as “The New Frontier.”
Just a few days later, Spirit quietly changed its policies. The budget carrier no longer charges change fees for any fare classes, except for group bookings. Spirit previously charged anywhere from $69 to $119 to change or cancel a reservation, depending on the number of days before a departure.
Both Frontier and Spirit continue to charge for carry-on or checked bags when buying their most restrictive fares.
A Regulatory Consideration?
The various changes at multiple major carriers comes as the Department of Transportation released a final rule on junk fees. This requires airlines to disclose all fees related to checked baggage, carry-ons, changing a reservation, or canceling one.
In May, several major U.S. airlines, along with industry trade group Airlines for America, filed a lawsuit against the rule, arguing that it was a regulatory overreach that could create more confusion for consumers.
American, Delta, United, JetBlue, Alaska, and Hawaiian are among those taking part in the action.
In a statement, JetBlue told Skift that its changes were unrelated to the recent DOT ruling: “JetBlue already provides clear and transparent information on what is included in our fare options and our onboard experience. This change aims to increase customer satisfaction and ensure customers who want to choose a basic economy fare have every reason to pick JetBlue.”
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Tags: american airlines, ancillary revenue, baggage, delta air lines, frontier airlines, jetblue airways, junk fees, southwest airlines, spirit airlines, united airlines
Photo credit: A United Airlines Boeing 767 at Newark Liberty Airport. Vincenzo Pace/aerovincenzo.com