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JetBlue Rolls Out Blue Basic, A Cheaper, No-Frills Fare

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JetBlue Rolls Out Blue Basic, A Cheaper, No-Frills Fare

JetBlue Airways Corporation (NASDAQ: JBLU) is moving to match competitors by offering a new basic economy fare for passengers who are willing to give up early seat selection and the ability to change a flight.

JetBlue said Tuesday it would begin rolling out “Blue Basic” fares on a couple of routes. The lower, no-frills tickets are expected to be available on more routes starting next year.

Passengers who choose the cheaper tickets will board last, won't be able to pick a seat until 24 hours before the flight and aren't permitted to change a flight without forfeiting the cost of the ticket.

How Cheap Are The Flights?

Most JetBlue flight searches Tuesday didn’t yet turn up the Blue Basic fares, so it’s hard to compare the new prices.

One route where a search did show Blue Basic fares was Fort Lauderdale to Nassau, Bahamas. A Blue Basic one-way fare to Nassau in mid-December showed up for $69, about $15 cheaper than JetBlue’s other less-restricted fares.

The JetBlue Blue Basic fare for that one-way Fort Lauderdale to Nassau flight on a Tuesday was the cheapest found on a site searching multiple air fares, coming in about $3 less than a Bahamasair flight.

Challenging Spirit 

The move by JetBlue, its first fare category revamp since differing fares were introduced by the airline in 2015, is an effort to compete with low-cost carriers like Spirit Airlines Incorporated (NYSE: SAVE), as well as larger airlines, including American Airlines Group Inc. (NASDAQ: AAL), Delta Air Lines, Inc. (NYSE: DAL) and United Airlines Holdings Inc. (NASDAQ: UAL), which have also introduced reduced, no-frills fares.

JetBlue and other airlines offering such low fares typically intend to make money by upselling customers who want to avoid the inconveniences of the cheaper flights, hoping fliers will choose to pay extra to check bags or choose a seat.

JetBlue does expect the new fare category to bring in about $150 million in revenue next year, the airline said on the company's last earnings call.

Blue Basic fare fliers still will have access to free Wi-Fi, snacks and drinks on flights. They can also bring one free carry-on, the same as customers who bought the more expensive fares. Most fare tiers charge for checked bags.

"Our new fare options recognize that one size does not fit all, and give you the chance to choose what’s important to you," the airline said on its website. 

"Some don’t have a seating preference — they just want a seat and they want it for the lowest possible price ... some want to be the first to board and snag that overhead bin, while others are traveling light and don’t mind sashaying onto the plane just before final boarding call."

JetBlue Stock Trades Higher 

JetBlue shares closed Wednesday's session 1.45% higher at $19.58. 

Related Links:

7 Most Shorted Airline Stocks Since The 737 Max Grounding

Airliners Giving Mixed Guidance: United, Delta Reaffirm, JetBlue Warns

Photo courtesy of JetBlue. 

Posted-In: airlines Blue BasicNews Travel General Best of Benzinga

 

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