JetBlue talks a lot about disrupting markets. When the carrier first started service 21 years ago it played the role of disruptor, both for product amenities and fares. Seven years ago it claimed a similar position in the premium transcon US market with the introduction of its Mint business class product. Now the carrier hopes for the same with its foray into Transatlantic service, slated to launch in 10 weeks.
It seems that launching transatlantic service also represents a different sort of disruption, this time to JetBlue itself.
Since its very first flight JetBlue sold fares on a one-way basis. Unlike with legacy fare plans (and similar to other low cost carriers) passengers would not pay a penalty for flying one way rather than round trip. That all changes with the introduction of flights to Europe. The carrier now files fares to London where a round trip can be less expensive than the one-way fare components.
With Norwegian’s long-haul demise – plus that of WOW, Primera, and probably others – no carrier publishes only one-way fares in the transatlantic market. Aer Lingus, Icelandair, and TAP Air Portugal historically have come the closest, but without a competitor forcing their hand all are willing to let the one-way fares drift higher right now.
Which is not to say that JetBlue’s arrival will not have an impact on fares in the market. It already has, with the cheapest one way business class prices down by as much as 50% (United Airlines and Virgin Atlantic are matching JetBlue’s fare; Delta Air Lines and British Airways cut fares, but not quite that much) when the carrier launches its Heathrow route in mid-August. And those airlines are matching the fare somewhat broadly on their schedules throughout the day, not only around the times of JetBlue’s one flight with only 24 business class seats on board.
And also, at least for now, the tactic remains in play only for the transatlantic market. And in most of JetBlue’s domestic markets there is enough competition to ensure the practice doesn’t take off. But JetBlue is the sole LCC operator on enough international routes in the Caribbean and Latin America. If the yield premiums prove compelling it would not be too difficult for the carrier to extend its newfound pricing prowess into those markets.
A favor to ask while you're here...
Did you enjoy the content? Or learn something useful? Or generally just think this is the type of story you'd like to see more of? Consider supporting the site through a donation (any amount helps). It helps keep me independent and avoiding the credit card schlock.
Interesting article, and a good take for the most part, except for two things:
– DL and Virgin Atlantic have a joint venture and are totally aligned on price; any difference between Delta and Virgin Atlantic is due to availability, not because they have different fares in the market.
– Your use of the term “fare component” is not quite accurate here; it’d be better to say “where a round trip can be less expensive than two one-way fares combining”.
Regarding the fare terminology, the round trip pricing is a combination of two fare components that each require a round-trip purchase to combine. Or a one-way fare that is, thus far, consistently higher than the half round trip component involved.