JetBlue’s Justification For Baggage Fees Demonstrates The Sad State Of Airline Industry

(Meg Marco)

Late last year, JetBlue announced that it too would be kowtowing to investors’ demands and start charging fees for checked bags. This news did not go over well with many of the airlines’ customers, but JetBlue believes people will get over it… because they really have no other choice.

Speaking with the Wall Street Journal, JetBlue’s head of marketing Marty St. George says that it’s okay for the airline to now charge baggage fees because most of the other carriers do.

“Years ago, every piece of research we did said: ‘Don’t charge bag fees, they are horrible and people don’t like them.’ But every single year bag fees have become less important, and now they aren’t that big of a deal anymore,” explains St. George, who claims that customers are so used to paying the fees that even though JetBlue was known for not having these fees, travelers would pull out their credit cards at the ticket counter just expecting to be charged extra for checking a bag.

So basically, JetBlue allowed the bigger airlines to do the dirty work of really ticking off consumers for 3-4 years until it was beaten into them so frequently that they now expect to be nickel-and-dimed.

St. George contends that customers will come to love the airline again after it reveals its new fares in the coming months, obviously implying that the fees will result in lower ticket prices.

But as I recently pointed out, the airline industry loves to perpetuate this myth that these fees are effectively creating a la carte airline pricing, where you don’t pay for things you don’t use. But if that were true, it would necessarily mean that the airlines would be losing money.

A simple example:

Say an airline ticket on JetBlue costs $500 right now and it includes the cost of a checked bag. If 20% of people on a plane don’t check bags, that means the airline is making a profit on that unused option.

Now say JetBlue decides the checked-bag fee will be $35. If — as airlines would have you believe — this charge represents the actual cost of checking, stowing, and tracking bags, then the same JetBlue ticket should now be $465.

Automatically, that means the airline is no longer making a profit off those passengers with carry-on only and it’s highly likely that a larger percentage of people will now choose to not check bags just to avoid the fee. Thus, even fewer people paying for checked bags and the airline is now spending time and money processing and administering fees.

So obviously the checked bag fees are not representative of the actual cost of the service, and given the near-constant upward tendency of airfares, there is little to support claims that fees are doing anything other than stuffing carriers’ coffers.

Meanwhile, we all wait for the ball to drop when one of the majors decides to start charging for carry-ons.

by Chris Morran via Consumerist