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JetBlue rolls out cheap prices that come with fewer benefits



JetBlue & # 39; s new Airbus A321neo at Kennedy York Airport.

Leslie Josephs | CNBC

On Tuesday, JetBlue Airways teamed up with other airlines to offer a basic economy fare: the cheapest tickets that lack perks as a pre-seat choice.

The new award, called Blue Basic, follows similar efforts by larger airlines to offer fewer benefits that were previously free in exchange for the lowest fares on a flight and are defensive play against fast-growing, low-cost airlines such as Spirit and Frontier.

Passengers who purchase the New York-based airline's basic economy rates will only be able to choose a seat 24 hours before the flight, and will also board the flight. Cancellations are not allowed.

When the airline announced its plan to offer discounted prices last year, airline president Joanna Geraghty promised that customers who choose these prices "will agree to some limits." She also vowed not to make passengers feel like "second-class citizens." All passengers will still have access to free Wi-Fi and will be able to carry a full-size bag and JetBlue has more legroom than other low-cost airlines.

The changes are part of a refurbished fare structure at JetBlue, the first low-cost carrier since 201

5. The New York-based airline also replaces Blue Flex prices with a price called Blue Extra, which packs a faster trip to safety lanes, earlier boarding and more ticket flexibility.

Geraghty said in a statement last month that it expects the new prices to raise $ 150 million in revenue next year.

"We are pretty conservative in the assumptions of sales and tariff," she said.

Managers of other carriers have said that their basic economy prices work because passengers are willing to pay a higher price to avoid them.

JetBlue shares fell 0.5% in morning trading.


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