Southwest may soon be the only major U .S . airline not Charging to Check First Piece of Luggage (316 hits)
(Bloomberg) -- JetBlue Airways Corp., one of the U.S. industry's holdouts in not charging for a first checked bag, is considering adding the levy as the carrier overhauls the way it prices tickets. "The concept of a first-bag fee is on the table," Chief Financial Officer Mark Powers said in an interview. "There is a construct under which we would, in effect, be able to charge for bags." A fee may be part of JetBlue's new fare structure, Mr. Powers said Thursday, as the New York-based airline creates classes of tickets whose price would include services such as one free piece of checked luggage. While fliers could still choose a cheaper seat, they would have to start paying for any baggage, not just their second suitcase.
Adoption of such a fee would leave Southwest Airlines Co. as the only major U.S. carrier that doesn't charge passengers for the first bag. Hunter Keay, a Wolfe Research LLC analyst in New York, has estimated that an across-the-board levy at JetBlue would boost annual earnings per share by 30 cents. JetBlue trails most of its domestic peers on benchmark profit measures such as operating margin and per-share earnings, according to data compiled by Bloomberg. The carrier's 30% stock gain this year through yesterday lagged behind the 35% advance for the Bloomberg U.S. Airlines Index.
Families, buckets
Software upgrades to let JetBlue create the fare classes—which the carrier refers to as "families" or "buckets"—should be in place in the first half of 2015, according to the airline. Mr. Powers declined to discuss specifics of the program because work on the fare categories is continuing. In broad terms, JetBlue would tailor the fare packages possibly based on the market, time of day or other criteria. "If you chose to buy a bucket without attributes and show up with a bag, you probably should pay for it," Mr. Powers said. "It's a terrific way, and in a JetBlue-friendly way, of monetizing all the excellent product attributes we have without doing what we're absolutely opposed to—nickel and diming and gouging customers." ...
