JetBlue has announced the enshittification of extra legroom and their new first class, by introducing nerfed ‘basic’ versions of both, extending basic economy into the forward cabins. Here they’re drawing on Delta and United who are making their own premium products worse thinking that passengers will spend more to preserve what used to be included. However, the folks at JetBlue aren’t doing it right.
To understand why, we need to look at why basic economy began in the first place, what it accomplished, and what’s different about this new effort.
Airlines Have Succeeded At ‘Personalized Pricing’ For Nearly 50 Years
Personalized pricing is all the rage to fear in the age of AI, but airlines have been charging different prices to every passenger on a plane, based on their perceived willingness to pay, almost since the dawn on 1978’s deregulation.
The modern tool for this has been basic economy, which started out as a way to compete with Spirit Airlines (and Frontier Airlines). While it was a Delta innovation, it wasn’t really a new idea.
Coming out of deregulation, legacy airlines had high costs. They charged expensive fares. And a whole bunch of upstarts without their high costs were undercutting them. The innovation, how the big airlines fought back, was to charge super low fares – lower even than these new airlines.
- One-third of their seats went out empty on average
- Any revenue they got went straight to the bottom line because an extra passenger cost them almost nothing
- And this was great as long as they could charge cheap fares to these incremental passengers, without offering the same discounted tickets to their existing customers who were willing to pay more.
The way airlines segmented customers back then was advance purchase requirements and Saturday night stays. Business travelers on the corporate dime weren’t buying tickets three weeks in advance. They needed the ability to change tickets. And those travelers were returning home for the weekend. They paid top dollar. Meanwhile, leisure travelers would fly if the fares were low enough but not the high prices companies would absorb.
Legacy airlines learned that they could have both a premium fare airline and a low fare airline and they’d actually be the same airline. And eventually they did this with long haul business class too – usually with 50-day advance purchase fares as a way to sell seats they didn’t expect to get taken at full price.
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Low Cost Carriers Blew Up The Model
Legacy airline pricing power disappeared when discounters like AirTran started charging low fares for one-way ticket (no roundtrip required, so no Saturday stays needed) and even at the last minute.
Spirit Airlines, Frontier and others followed that model. The big airlines lost their pricing power. They had to match the low fares or they’d lose too many of their passengers, and high fare customers got a great deal because they started paying lower prices.
Enter Basic Economy
Basic economy let airlines:
- charge low prices
- but the restrictions made the experience slightly better than Spirit and Frontier, but not that much better
- so people – like business travelers – who cared about the experience wouldn’t buy them
Legacy carriers got their pricing power back! They could charge high fares to people willing to pay more, and they could discount – without leakage – to fill seats.
Basic Doesn’t Work As Well For Premium Cabins
This was a good idea for coach – make the product worse on the cheapest fares, so that it really is different products to different customers. So United and Delta decided that this must be a good idea for other products, too.
- They want to charge full price to people willing to pay more
- But sometimes they have extra seats. Right now they monetize those by selling upgrades, sometimes for as little as $26
- If they could separate the product people who want the better version pay more, and more price-sensitive customers who still want the premium experience pay the ‘basic’ version’s price.
They’re not really competing with Spirit anymore (Spirit is gone!). And the problem is that they now need to make domestic first class and business class bad enough to matter, and with a big enough price difference to matter. That’s actually hard. In fact, so far we really haven’t seen it.
JetBlue’s Basic Extra Legroom And First Class Are Bad Products
This week, JetBlue followed United and Delta, announcing ‘basic’ for more than economy.
- ‘Basic’ EvenMore (extra legroom)
- ‘Basic’ BlueFirst domestic first class which will debut later this year
- They aren’t going to do ‘basic business’ (like United and Delta) at this point.
Basic extra legroom and domestic first class won’t offer advance seat assignments, will have change fees, and will earn fewer TrueBlue points. But here’s the thing:
- There’s no reason for most people to buy up from standard coach to basic extra legroom when you’re going to wind up with a middle seat.
- And there’s no reason to spend more to go from basic to regular domestic first class, because the seats up front aren’t really different enough to matter.
If you were considering spending more money for extra legroom, basic now means you probably spend less and stick with an aisle seat in coach.
And if you were considering domestic first class, many passengers will just choose the cheaper version – so what if you get stuck in a window seat?
It’s not really worth spending more money up front to avoid spending money if your plans change later. And JetBlue TrueBlue points just aren’t worth that much to begin with, that you’ll want to buy a more expensive ticket for.
In other words, the products aren’t simultaneously differentiated enough and significant enough values to appeal to different customer segments, get passengers to reveal their preference and spend the most money they’re willing to on the product. What worked for basic economy doesn’t work as well here.
In fact, Air Canada faces the exact same problem with their basic premium faces announced today.
- Air Canada is imposing change fees and fees for advance seat assignments on their new premium economy basic and basic business fares.
- Business basic won’t permit access to their Signature Suite lounges in Toronto and Vancouver (but will still offer Maple Leaf Lounge access).
This really isn’t enough to warrant a buy up to the higher fare for most, for instance assuming the price difference between business and basic business is enough to matter, just pay the seat assignment fee, and note that elite status and credit card benefits still apply (except that eUpgrades can’t be used on basic premium economy).
They’re going to declare these efforts a success. They’ll even convince themselves of it to some degree. There’s a Russian word vranyo (враньё) – a lie the speaker knows is false, the audience knows is false, yet everyone maintains the pretense. Repeating it becomes ritualistic.
Oof, Gary, you’re giving up so fast. As a consumer, you should at least welcome more competition in the premium space. Unlike Southwest, which only ‘talks’ about First Class and lounges, B6 delivers.
As for this… “a lie the speaker knows is false, the audience knows is false, yet everyone maintains the pretense” …that Russian word (vranyo) certainly applies to you-know-who… TDS! TDS! TDS!
If the strategy is to be acquired by United, helps to get your customers used to navigating Basic tiers.
The real problem isn’t Basic, it’s that they are about to cannibalize their whole product. Once they turn themselves into a legacy airline LOPA, other than potentially cost, what’s the incentive to fly B6? Their loyalty program with tiers that are named to discourage bragging (I’m a Mosaic 3 and you’re a Mosaic 2! Wait, which is better, Mosaic 1 or 4. Don’t you want to be #1?) and points that are worth exactly 1.4cpp with no aspirational redemptions? Their one lounge at JFK that serves cold takeaway food? The Barclays credit card partnership that is weak at best? Maybe it’s the good Northeast-Florida and JFK-California point-to-point network… but without its own connectivity to that network?
The days of the JFK T5 Terra blue potato chip farm are sadly over. What’s relevant is their FLL push, which could actually work given enough time, but sadly all just feels like too little too late and everything has to align to be able to pull off a turnaround in this fuel cost environment. I hope they make it, but so much writing appears to be on the wall. We will see…
JetBlue just sent an email to consumers announcing new “easy” system for seat selection.
It is far from easy!
They made it more complicated – by adding up to 4 (FOUR!!) different categories to each seat choice. So instead of 6-7 ticket variations, now we’ll have up to 15! (Doubling that number is not making it “easy” for buyers).
Please cover that, Gary. JetBlue slowly turning from a top low-cost (but good service and product) airline to a confusing mess with aging fleet and stressed workforce. More like RyanAir of the USA… Which is sad. I used to like flying with JetBlue for number of years from early 2000s to around 2015 – once they start cutting on everything: from snacks to bag fees to confusing pricing system, along with award program devaluation thru later decade.
I flew their Mint class to Europe, and, although it’s not horrible, hard product and soft product (service, food, etc.) are both low quality. For the money charged, Mint is not competitive – it feels more like an upgraded sleeper bus seat rather than a premium airline cabin. Flight attendants treat it like a shuttle bus with coffee service.
So whatever the “first class” domestic they came up with – it’s not a real product or game-changer. Just another move in charging more for whatever is already there. And an excuse to make ticket buying even more confusing, plus deny the refundability of most ticket groups!!
Happy travels!!
@ Gary — “And there’s no reason to spend more to go from basic to regular domestic first class, because the seats up front aren’t really different enough to matter.” This same logic applies to ALL domestic airlines for all flights without lie-flat seats, yet first class cabins are 90% sold to cash buyers. Simply HAVING First Class for those who wish to connect to a Mint flight will be a HUGE success for JetBlue. I would personally love to fly from my home airport to JFK and connect to a Mint transcon when traveling to CA, but I don’t even bother looking because I am not interested in 3-across seating on the first 1,000-mile flight, and a lounge-less visit to JFK Terminal 5.
@Gene — We’re gonna need to start adding more letters to the ‘WFBF’ acronym… like, it’s no longer ‘want first, buy first,’ with airlines like Delta, jetBlue, and United, it’s ‘want first with a seat-selection, buy First Classic,’ etc. So, like, WFSBFC. It doesn’t have the same ring, does it? *sigh*
You don’t address the value of BlueFirst’s soft product here, only money and space. The soft product would also factor in a consumer’s choice.
Noo Yawk is loaded with Basic Bitches. Noo Yawk’s Hometown Airline is finally appealing to them.
The issue is when you monetize the premium cabin the way the economy cabin is the desire to pay for that premium cabin (OPM set aside) becomes less. You buy premium for the experience and get the seat you want.
I fully support airlines moving away from the complimentary upgrade process or at least make upgrades far less frequent. I don’t expect an airline to give me something for nothing.
But when I pay to be up there I don’t want to be nickeled and dimed. So far AA has resisted this change although I’m not hopeful it will remain so.
If JetBlue is going to play the nickel and dime with their premium cabins they should expect empty seats. JetBlue does not have the network the US3 have or the frequency. They’re in a battle to take away premium customers from the US3.
There are only so many people that can afford domestic first. Most companies do not pay for premium for domestic first and so the flyer has to pay out of pocket or hope against hope for an upgrade. The market is limited to begin with, a smaller market segment JetBlue desperately needs to tap into. A better coach airline is a non starter.
For domestic travel airlines don’t admit on class of service any way. AS does for a small number of domestic long hauls and that’s about it.
@Peter — TrueBlue is the Accor of airline programs. Fixed redemptions (1.3 cpp), hardly any aspirational redemptions, hard to game. The closest thing we’ve seen recently was the ’25 for 25′ promotion (I know Nick over at Frequent Miler took advantage of it, though I didn’t partake myself.) A bright spot was when I managed to status-match to Mosaic 3 a few years back. The Move to Mint certificates that came with it yielded high value when used wisely for transcon and TATL routes.
JetBlue’s strength was superior passenger experience at a lower cost (free high-speed WiFi, seatback screens, free snacks, and extra legroom standard across economy). Squeezing seat pitch to match legacy LOPAs while unbundling may feel a little yucky to some. If B6 starts to feel too much like Delta or United, then Gary may be right that flyers will just choose Delta or United for their route networks, frequency, and alliance connectivity. (Speaking of LOPA, do we need to first-hand anecdotally ‘measure’ anything on these? I still got my tape!)
This article is lazy with very poor arguments. Everything about airlines revolves around monetization. Airlines have a perishable product. Middle seats in economy and in even more are still going to exist. If somebody wants to move from a middle seat in regular economy to an unoccupied middle seat with extra leg room and is willing to pay, why deny your customer that option?
At least in this instance you are getting either more leg room or are sitting in a domestic F seat.
Airfares are still incredibly cheap when compared to most everything else which has gone up in price with the surge in inflation. Creative ways to monetize–including the huge payments by banks to airlines’ FF programs-are the only thing bringing profitability to airlines in the US.
What are the other options to achieve profitability? Raise fares for everybody–regardless of what services you want? Introduce Euro business where everybody on the plane has the same seat but some pay 2 or 3 times as much to get a meal worth under $5? There are only so many ways to maximize revenue. Getting people to voluntarily pay for something extra is the least painful way to do it.
@Bill — You probably could make your points without literally attacking Gary.
jetBlue’s strength was offering a better flight experience than the Big 3. If you’re like me, and want them to stick around, then they need to win on being better, not by racing to the bottom. I oppose doing Euro Business (3-3, middle seat blocked). That hard-product is certainly not ‘better.’
In economy, basic restrictions work because corporate travelers pay extra to avoid them. But up front, taking away minor perks from the same seat won’t push people to buy the higher fare; it just gives them a discount on a ticket they would’ve paid full price for anyway. (That is, of course, if Basic fares are actually less-expensive.)
I don’t find it confusing at all.
Everyone complains that B6 doesn’t look like the big guys.
Then when the try to do what is successful at other airlines the same people complain that B6 isn’t unique anymore.