JetBlue tends to be a leader when it comes to starting trends to increase checked bag fees, so this will be something to keep an eye on…
JetBlue tries to boost revenue with higher checked bag fees
Airlines are obviously in an incredibly tough spot at the moment. We’ve seen a massive increase in fuel costs, which is one of the biggest variable expenses that airlines have. If oil prices don’t decrease from these levels, even the world’s most profitable airlines will be losing money, while those airlines that were previously struggling may be in bankruptcy.
Effective immediately, JetBlue has increased checked bag fees. JetBlue has a rather complicated fee structure for checked bags, with both off-peak and peak pricing, plus different pricing based on whether you pay for the bag 24 hours or more in advance. With these changes, off-peak pricing has increased by $4 per bag, while peak pricing has increased by $9 per bag.
During peak periods, a first checked bag will now cost $49 if paying more than 24 hours in advance, while it’ll cost a staggering $59 if paying within 24 hours of departure. You can find the new checked bag pricing below (this doesn’t include the $10 discount if paying more than 24 hours in advance).
Why JetBlue is raising checked bag fees instead of fares
In a statement, JetBlue has shared that it is increasing checked bag fees to keep its fares “more competitive,” and that “while we recognize that fee increases are never ideal, we take careful consideration to ensure these changes are implemented only when necessary.”
In recent weeks, we’ve heard a lot of airline executives warn that airfare could go up due to higher oil prices. The issue is that demand for airfare is pretty elastic — when airfare goes up, demand goes down.
Even beyond that, Americans are feeling the impacts of higher oil prices, so many people also have less disposable income. If airlines could just easily raise prices, we wouldn’t be in a situation where most US carriers are turning operating losses.
From the perspective of airlines, if they desperately need to extract more revenue from passengers, increasing checked bag fees is a logical place to start, since it’s not a detail that passengers compare quite as closely as just direct ticket costs.
So yeah, the price of oil is impacting checked bag fees, but that’s simply because it’s a more practical way to try to increase revenue, compared to outright raising fares.
Bottom line
JetBlue has just increased checked bag fees by $4-9 per flight, depending on whether you’re traveling over off-peak or peak dates. The airline claims that this is a way to keep fares low — in other words, the airline sees it as the best way to boost revenue without having to increase fares. I have to imagine that JetBlue won’t be alone in moving in this direction, and once costs go up, they rarely come down.
What do you make of JetBlue increasing checked bag fees?
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