JetBlue Airways plans to strategically cut its basic economy fares to better compete with ultra low-cost carriers in key markets while boosting the benefits of standard and premium tickets by guaranteeing overhead bin space and eliminating change fees.
The move, announced on Tuesday, is the latest example of airlines' efforts to expand ticket options and flexibility in an industry upended by the coronavirus pandemic.
Ultra low-cost carriers grew nearly 90% in JetBlue's markets in the three years before the pandemic and have continued to fly a significant amount of capacity over the past year.
One competitor carrier overlapped with nearly half of JetBlue's US and international routes, and around 80% in places like Fort Lauderdale and Orlando, Florida before the pandemic, the company said.
"We recognize that we're competing in a very fragmented marketplace," JetBlue President Joanna Geraghty told Reuters. "When you look at certain customers who purchase almost entirely on price, we want to make sure that we are squarely in their decision set."
"On the flip side, we also know that there was a large number of customers...stressed over whether or not we can get a carry-on bag on board," she said.
JetBlue - which offers the most legroom in coach and perks like free Wi-Fi, snacks and drinks - will cut its Blue Basic fares but only allow one personal item that fits under the seat, beginning July 20.
That will create carry-on space for those paying more.
It will allow changes and cancellations on Basic Blue tickets for a fee, while eliminating fees for other fare categories once a current waiver policy implemented during the pandemic expires on March 31.
US major airlines are also doing away with traditionally costly change fees, mirroring Southwest Airlines' longstanding policy.
New York-based JetBlue, which drove down US business class fares when it debuted its Mint premium class in 2014, hopes to shake up the Transatlantic market this summer with its first-ever flights to London that will feature a new version of Mint with 24 private studios.