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JetBlue rolls out new fare strategy to compete for both budget and business travel

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Tracy Rucinski
·2 min read
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By Tracy Rucinski

Feb 16 (Reuters) - JetBlue Airways plans tostrategically cut its basic economy fares to better compete withultra low-cost carriers in key markets while boosting thebenefits of standard and premium tickets by guaranteeingoverhead bin space and eliminating change fees.

The move, announced on Tuesday, is the latest example ofairlines' efforts to expand ticket options and flexibility in anindustry upended by the coronavirus pandemic.

Ultra low-cost carriers grew nearly 90% in JetBlue's marketsin the three years before the pandemic and have continued to flya significant amount of capacity over the past year.

One competitor carrier overlapped with nearly half ofJetBlue's U.S. and international routes, and around 80% inplaces like Fort Lauderdale and Orlando, Florida before thepandemic, the company said.

"We recognize that we're competing in a very fragmentedmarketplace," JetBlue President Joanna Geraghty told Reuters."When you look at certain customers who purchase almost entirelyon price, we want to make sure that we are squarely in theirdecision set."

"On the flip side, we also know that there was a largenumber of customers...stressed over whether or not we can get acarry-on bag on board," she said.

JetBlue - which offers the most legroom in coach and perkslike free Wi-Fi, snacks and drinks - will cut its Blue Basicfares 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 Bluetickets for a fee, while eliminating fees for other farecategories once a current waiver policy implemented during thepandemic expires on March 31.

U.S. major airlines are also doing away with traditionallycostly change fees, mirroring Southwest Airlines'longstanding policy.

New York-based JetBlue, which drove down U.S. business classfares when it debuted its Mint premium class in 2014, hopes toshake up the Transatlantic market this summer with itsfirst-ever flights to London that will feature a new version ofMint with 24 private studios.(Reporting by Tracy Rucinski; Editing by Aurora Ellis)