Not so well defined price fence by @JetBlue

jetblue-evenmoreI am writing this from a half empty ( or as JetBlue called it half full) JetBlue flight. Even in a half-empty flight I am sitting in a row that is fully occupied. Right in front are two completely empty rows of seats. When people asked to move to those rows we were told politely, “those are ‘Even More Space‘ rows. You need to pay to upgrade to those”.

Common reaction, including my own is, but but these are empty. ‘Even More Space’ is JetBlue’s offering to its customers with higher willingness to spend. These seats have more legroom and also have power outlets to charge your devices. In other words, these are price realization levers that allows them to capture additional value from customers. That is, “Even More Value Share”.

Don’t think for a second I would  say price realization is wrong, I am all for better price realization and for offering premium products at premium prices that customers would self-select themselves to. But I can’t be rational all the time, can I? Especially as a customer?

We wouldn’t ask to move to first class if we see empty seats. It is either due to the clear separation, what we know about premium service it offers or social training. But when you see the identical seats right in the midst of all other seats with no visible advantage over other rows, we will think this is ridiculous to ask us to pay to move one row ahead within coach.

If you are one of those sitting in the rows behind the empty Even More Space row you likely will think about the zero additional cost to JetBlue to allow you to move ahead.

About five years ago when Andrew Hyde from Boulder was upset with Frontier Airlines charging him extra to go standby on earlier flight even though the flight had empty seats. So Andrew created a website frontierfail website and started writing strongly about Frontier’s bad pricing practice.

Like most people looking at pricing as cost driven, his case was around the marginal cost to Frontier to accommodate him on a empty seat and the disconnect with the price they wanted to charge. Whether there is true and measurable marginal cost to carrying one more passenger or most of it is fixed cost, I do not know.

I then wrote why the cost does not matter and what it’s Frontier’s model for not allowing free standbys. I am not changing my position because I am at the receiving end. Yes the cost does not matter. In the case of Even More Space the marginal cost is $0. But the problem is there is no upside to JetBlue with this price fence.

The bigger problem is, those seats are empty – they already lost on monetizing those passenger miles. That is a bigger revenue loss. Trying to stem that loss by capturing upgrade charge is valiant attempt but ineffective. First the customers do not see clear value and second even if they did, it has no price in their mind because they see it as fairness issue ( why should I pay you for something that I know costs you nothing and you are not able to sell?).

It is a different matter in a full flight and when JetBlue offers upgrade at checkin time. Customers can see value and may self select themselves. If they did not then JetBlue has no option but to start releasing those seats at no extra charge to ticketed passengers. And indeed in past toe occasions in last two months I did get that benefit ( and I did not bother writing about that of course).

So the better option for JetBlue for a half-empty flight is to follow the same procedure in a full flight with no takers and allow customers to switch. At least you won’t create displeasure ( and no I am not going to start JetBlueFail like Andrew Hyde did. I love JetBlue. Even it’s regular seats are more spacious than most. Besides their Terra Blue chips are very good).

As I wrote previously about how airlines are moving away from service reductions and restrictions to value delivery and value capture, JetBlue should avoid restrictions if they lost the opportunity to monetize the value before the flight takes off. After that the value has expired and hence it’s price.

Final note: Given that I was woken up twice in the middle of 6 hour flight in the night by two young ladies wanting to use the bathroom I feel like now I should have upgraded to the empty row.

5 thoughts on “Not so well defined price fence by @JetBlue

  1. I just paid $85 for an ELR seat on a cross country flight because that was the only way to ensure I got an aisle seat. If the middle and window seats ars empty and they allow people to sit in it them because they’re available, I’d be pissed. Sometimes, paying that extra $ sometimes allows me to get all 3 seats and lay down. I have also been assigned an ELR seat when there were no more coach seats available, and I was not charged extra. When that happens, so be it. If the flight you were on was really only half full, I suspect you could have found an aisle or window seat that was available in a regular row.

    Like

  2. I totally agree Rags. Airlines are a cut-throat commodity business.

    Looking at it as an unpaid service tier that should not be given to customers for free is an accounting/cost-based way of looking at things.

    Looking at it as an opportunity to delight customers and differentiate at zero cost is a customer-centric way of looking at things. Jet Blue takes pride in being customer centric, they should opt for the latter.

    Upgrading customers (True Blue members, for example) is common practice already across airlines, so it has created an expectation. If American Airlines can upgrade me from coach to first class in a trip from Tokyo to Dallas (which they did) I would expect JetBlue to upgrade good customers from coach to coach plus.

    Like

  3. This is an interested consideration which, I feel, brings up a good question of what has more value: the few extra bucks from a customer with a fair degree of risk that the customer will resent it, or the goodwill in a competitive marketplace you get by not trying to make customers foot the bill for the airline’s failure to convert prospects into filled seats. If there was a difference in the fare for that flight vs the one you booked at the time of booking, fine. That’s fair, and I would pay it. Otherwise, I think it’s a bad idea.

    Like

  4. But they’re NOT identical seats. They have more legroom. As a liberal whose been yelling about “fairness” for the past five years, you’ve got some nerve complaining about this. Would it be “fair” to the customers who pay for the upgrade for you to get it for free? Would it be “fair” to other customers if you got the better seat just because you were closest to it and could beat out other customers in a race to it?

    Enjoy your flight.🙂

    Like

Comments are closed.