JetBlue rolls out 'Blue Basic' fares as it battles budget rivals
JetBlue is the latest carrier to add a basic economy fare, rolling out its new "Blue Basic" offering as part of a broader revamp of its fare structure.
JetBlue hopes the move will allow it to capture more price-conscious flyers for whom price is the chief concern when booking a flight.
"Our industry has come to a point where our customers feel they have to choose between an in-flight experience — a good one — and a low fare," JetBlue COO Joanna Geraghty told TPG. "Our focus with this Blue Basic fare is to show customers that you don't need to choose between great service and low fare. You can have both."
The effort comes as ultra low-cost carriers like Spirit, Frontier and Allegiant have grown rapidly across the U.S. this decade. They're known for offering rock-bottom fares but charging extra for nearly everything beyond boarding a flight. Historically, these "ULCCs" have enjoyed an advantage against full-service airlines on online travel-booking sites, which often display the carriers with the lowest fares first — even if the difference is just $1.
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Changes and cancellations will not be allowed, not even for a fee. Customers traveling on Blue Basic fares will forfeit their entire ticket cost if they do not travel on their originally booked flights.
Geraghty acknowledged that challenge, saying "oftentimes airlines such as JetBlue and other full-service operators are commoditized and are compared like-for-like with some of the ULCCs, and we're far from it."
She said JetBlue believes if it can lure some of these price-conscious flyers with competitive fares, they'll be won over by the carrier's offerings that include free in-flight Wi-Fi, seatback entertainment and relatively spacious seating.
"We just need to be part of that conversation and part of that decision set," she said.
JetBlue's new Blue Basic fare will give customers the carrier's cheapest fare, but will offer a minimum of perks.
Checked bags are not included, though customers' carry-on allowance will include both a personal item that fits underneath the seat in front of them and a larger item that can be stowed in the overhead storage bins — if space is available. Passengers flying on Blue Basic tickets will be the last group called for boarding. TrueBlue members holding the JetBlue Plus Card will still receive one checked bag for free, even at the Basic Blue fare.
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Blue Basic customers will not be able to select seats in advance for free, but they will be able to do so by paying a seat-selection fee. Otherwise, seat selection for Blue Basic customers will open up 24 hours in advance of a flight.
Customers flying with a Blue Basic ticket also will earn fewer of JetBlue's TrueBlue frequent-flyer points. Blue Basic tickets earn just 1 point per $1 of eligible fare. An online booking bonus adds another point per $1 spent if booked on JetBlue's website. Those earning rates, however, are just a third of what customers would earn on the airline's "Blue" fare that is positioned one level above Blue Basic.
Other changes
JetBlue's Blue Extra fare is expected to roll out across JetBlue's network on Tuesday. Blue Basic and the other tweaks will be phased in, starting in select markets before expanding across the carrier's entire set of markets by early 2020.
JetBlue also is tweaking its other fare types as it adds the Blue Basic category, part of what Geraghty described as an "evolution" of the airline's fare offerings that it first rolled out in 2015.
Related: Credit Card Review: The JetBlue Plus Card
Gone is JetBlue's "Blue Flex" fare type, replaced by "Blue Extra." With the change, customers will no longer receive two complimentary checked bags as they did under the Blue Flex fare.
The carrier's existing "Blue Plus" fare that included one checked bag will remain, but it will be relegated mostly to international markets in Latin America. That means most JetBlue customers will now have to pay to check a bag, unless they're flying in the Mint cabin or are from one of the "limited number of markets" that will retain Blue Plus. JetBlue's checked-bag fees begin at $30 for a first bag and $40 for a second.
Two of JetBlue's other existing fare types — Blue and Mint — will remain with no changes.
Cancellation and change-fee rules also will not change for Blue, Mint and Blue Plus tickets. For JetBlue's new Blue Extra fare type, changes and cancellations will be permitted.
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Points-earning changes
Along with the revamp to JetBlue's fare types, JetBlue customers also will earn fewer TrueBlue points on certain fares. None of the reductions are drastic, but they do represent a devaluation to current levels.
With the changes, here's what the following fare types will earn:
Blue Basic: 1 point per $1 of eligible fare with an online booking bonus of 1 point per $1 spent, amounting to 2 points per $1 for fares booked at JetBlue's website. Since this is a new fare type, there is no existing JetBlue fare type to compare it to. However, it earns only one-third of what JetBlue's previous lowest fare-type (Blue) earns.
Blue: 3 points per $1 of eligible fare with an online booking bonus of 3 points per $1 spent, amounting to 6 points per $1 for fares booked at JetBlue's website. This earning rate is unchanged.
Related: Snapshot: A look at JetBlue by the numbers
Blue Extra: 3 points per $1 of eligible fare with an online booking bonus of 3 points per $1 spent, amounting to 6 points per $1 for fares booked at JetBlue's website. While this is a new fare type, it compares most closely to the Blue Flex fare that JetBlue will end. Currently, Blue Flex fares earn 3 base points per $1 plus a 5-point-per-$1 bonus for online booking. In that comparison, maximum earnings drop from 8 points per $1 to 6.
Mint: 3 points per $1 of eligible fare with an online booking bonus of 3 points per $1 spent, amounting to 6 points per $1 for fares booked at JetBlue's website. This earning rate is unchanged.
Blue Plus*: 3 points per $1 of eligible fare with an online booking bonus of 3 points per $1 spent, amounting to 6 points per $1 for fares booked at JetBlue's website. In the previous structure, the online bonus for Blue Plus fares earned 4 points per $1, for a maximum of 7 TrueBlue points per $1. That will drop to 6 points per $1 in the new set-up. However, while the Blue Plus fare is not being eliminated, its availability will be greatly reduced under JetBlue's new fare revamp. *= This fare type will be available only in a "limited number of markets," mostly international.
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