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JetBlue’s CEO: Bag Fees Are Going to Keep Going Up

JetBlue’s CEO: Bag Fees Are Going to Keep Going Up
Jennifer Billock

Bad news, everyone: The days of no bag fees are never coming back. Airlines need them to make sure every traveler is getting the best value for what they’re paying for the ticket – at least according to the JetBlue CEO who notes that decreasing certain fees would be fiscally irresponsible for the airline.

Those of us wistful for the days when airline bag check fees weren’t even a thing will have to stay nostalgic, according to JetBlue CEO Robin Hayes, who says the fees are necessary to invest in other areas important to customers—like in-flight entertainment, service, and legroom. The comment came in response to a concern that JetBlue raised its checked bag fees earlier in the year.

“We’re a very capital-intensive industry, margins are tight,” Hayes said at the Cornell Tech @ Bloomberg speaker series in New York City.

“Are there more innovative ways to increase revenue other than simply to jack up the price every couple months it seems like?” asked moderator Scarlet Fu, a Bloomberg Television anchor.

Hayes responded, “We want to deliver a great experience for our customers, but we have to be focused where we deliver that. We just simply can’t afford to offer the best in every area. We look at a thing like bag fees and say, ‘Look, we need to be competitive in that area, but if we were to say we’re not going to charge for any bags, we simply couldn’t offer some of the other things. I’m happy with what we have.”

The conference also covered blockchain, which, unlike bag fees, the airline is currently not happy about.

“We’ve met lots of startups but haven’t found the right one that is building a true application use of blockchain that will be viable and useful for us, whether it’s customer-facing or behind the scenes,” JetBlue Technology Ventures President Bonny Simi said. “And so 2019, [we are] bound and determined to find a blockchain startup that we can actually work with.”

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