June 30, 2015 / 10:00 AM / 4 years ago

JetBlue Airways adds $20 checked bag fee per one-way trip

June 30 (Reuters) - JetBlue Airways Corp on Tuesday began charging its lowest-fare customers for checked bags, an anticipated move that leaves Southwest Airlines Co as the only U.S. carrier to let all travelers check a bag for free.

The New York-based carrier said travelers who book the lowest “Blue” fare can check a bag on a one-way trip for $20 during online check-in or $25 at an airport ticket counter. To avoid the charge, customers can book a “Blue Plus” fare that typically is $15 more than the base ticket price, it said.

JetBlue announced in November that it would roll out bag fees by this summer, estimating it would earn some $65 million in 2015 and more than $200 million within several years from charges associated with new fare options.

Consumers reacted negatively while investors heralded the change. The budget airline had long resisted charging for free travel benefits.

“Half of the customers don’t even check bags,” Marty St. George, JetBlue’s executive vice president for commercial and planning, said in an interview. “In effect what’s happening is, the customers who aren’t checking bags are paying for the customers who do.”

The airline’s approach to fares lets customers pay for what they need, he said. For example, travelers can book a “Blue Flex” ticket - generally $100 more expensive than the one-way base fare - to have two checked bags and no fees for changes or cancellations.

U.S. airlines grossed $864 million in baggage fees in the first quarter, amounting to 2.2 percent of total operating revenues, according to the U.S. Bureau of Transportation Statistics. That is the highest amount in baggage fees they have ever collected during the first quarter.

Travelers have criticized airlines not only for new charges but also for obfuscating the real cost of travel. Customers cannot easily compare fares across airlines, hidden in fine print, because websites such as Expedia list prices without ancillary fees, according to Charlie Leocha, chairman of consumer advocacy group Travelers United.

St. George said JetBlue still has the best product of any airline despite fees. He said “Blue” customers get free snacks and satellite television and can pre-select a wider range of seats than on other airlines, a flexibility that matters more to travelers than checked bag fees.

JetBlue said it lowered flight change fees as part of the fare restructuring. (Reporting By Jeffrey Dastin in New York; Editing by Ken Wills)

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