JetBlue to add bag fees on cheapest tickets

JetBlue will add bag fees and squeeze seats to boost profit.

The airline said that it will create three ticket classes beginning in the first half of 2015, and only the top two include at least one free checked bag.

Other big airlines have added fees on checked bags since 2008, when they needed money to cover rising fuel costs. In the first six months of this year, U.S. airlines raised $1.7 billion from bag fees. JetBlue’s decision will leave Southwest as the only major U.S. airline to let all passengers check a bag free.

The changes seemed to please investors — shares of JetBlue Airways Corp. rose more than 4 percent. Analysts said they showed that incoming CEO Robin Hayes was sharply focused on boosting revenue and controlling costs.

JetBlue executives declined to give prices but said they would fluctuate with demand. They said that fewer than half of JetBlue passengers check a bag. The airline also will add 15 seats to its Airbus A320 planes, increasing capacity to 165 from 150, and reduce average legroom. The makeover will start in late 2016, take two years and still leave more legroom than in the main cabins of bigger airlines, JetBlue executives said.

JetBlue expects that the new fare classes and bag fees will generate more than $200 million a year in operating income, the extra seats will raise another $100 million a year, and other measures will produce $150 million a year.

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