JetBlue Introduces Surge Pricing for Bag-Check Fees
JetBlue has announced a new pricing strategy for bag-check fees, similar to Uber's surge pricing model. Passengers will now have to pay more to check luggage during peak travel times.
Travelers will be charged higher fees for checking bags when flying during busy periods or on international flights. JetBlue explained that this adjustment is necessary to cover the increased costs associated with transporting luggage, including rising wages and fuel expenses.
In a statement to CBS News, JetBlue stated, "The cost of transporting bags has gone up significantly due to increased wages and higher fuel costs, and we remain unprofitable since COVID. While we don't like increasing fees, we are making these adjustments to help get our company back to profitability and cover the increased costs."
JetBlue emphasized that this pricing strategy allows them to keep airfares competitive, while shifting the cost burden to services utilized by specific customers. Amenities such as seatback TVs and onboard wifi will continue to be complimentary for all passengers.
In the fourth quarter of 2023, JetBlue reported a loss of $104 million on operating revenue of $2.3 billion. This was a decrease from the profit of $24 million on revenue of $2.4 billion in the same period last year. The airline's plan to acquire discount carrier Spirit Airlines for $3.8 billion was halted in March after a federal judge intervened, citing concerns about potential negative impacts on industry competition.
The concept of dynamic pricing, commonly used in ticket pricing by airlines, has now extended to additional services in the travel industry. This pricing strategy is also being explored by other sectors, such as restaurants, which are testing out fluctuating menu prices based on demand and timing.
What are the new costs?
JetBlue has introduced a new pricing model on its website. Passengers who pay for checked bags more than 24 hours before a flight can save $10 on each bag, for up to two bags.
However, fees increase within 24 hours of a flight, reaching up to $110 for two checked bags on international flights during peak travel times, such as holidays or busy periods.
For travelers with "Blue," "Blue Basic," and "Blue Extra" fares – JetBlue's lower-cost ticket options – the first checked bag costs $45 for off-peak flights and $50 for peak hours. The second checked bag is priced at $60 for off-peak times and $70 for peak times.
Additional fees apply for transatlantic flights. On an off-peak "Blue Basic" fare, the first checked bag costs $65, while the second bag costs $105. During peak travel seasons, these fees increase by an extra $5 for the first bag and $10 for the second bag.
