One of the last two airlines that focused first on customers gave up the ghost yesterday. JetBlue announced that it will start charging for checked bags in 2015 and will be cutting passenger leg room by roughly 5% beginning in 2016. In explaining these moves, airline execs pointed to the need to satisfy the interests of the financial community:
JetBlue said its new steps and improvements in other projects would increase annual operating income by about $450 million by 2017, including $200 million from the new fare classes and $100 million annually from the new seats. … While the discount carrier has earned plaudits from customers, its financial performance has lagged behind rivals. Analysts have pressed the carrier for bag fees and tighter seating, saying it gave fliers too much for too little. … [JetBlue CEO Robin] Hayes said in an interview that the changes will improve investors’ returns without scaring away customers. “We’re very proud of our customer-first model, but we need it to deliver a similar level of return as other models,” he said. “JetBlue to add bag fees, reduce legroom,” WSJ, 11/20/14 (paywall) Continue reading
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