Just a quick note before I get into this post. I, like all of you, saw the crash of American 5342 last night, and I am sure there will be much to say about this. As always, I’m not here to break news but rather analyze it over time. So I will just run the scheduled post below and will talk about this more in the future.
In case you missed it, this has not been a good week for JetBlue. The airline reported earnings and disappointing guidance which saw shares immediately tumble by more than a quarter. The airline posted a breakeven operating margin and a net loss, but it’s the guidance that really grabbed Wall St. The airline won’t grow this year, and unit costs will climb. Unit revenues will climb to some extent as well, but it needs to really boost those revenues further if it wants to get out of this rut and into the realm of sustainable profitability.
Part of this new revenue plan was rolled out just before earnings when JetBlue delivered on the refresh of its extra legroom product. Please welcome EvenMore. This is the product that used to be Even More Legroom, then became Even More Space, and now has done a two-fer, eliminating both the word “Space” and the literal space between “Even” and “More. Is this going to finally give JetBlue the product it wants? You can decide… if you pay extra for it when you fly.
On April 1, 2008, JetBlue first began charging for extra legroom seating in what it called “Even More Legroom.” That was what you got, and it was really just simple math on JetBlue’s part. I’ll include this image from the post I wrote way back then.
JetBlue had already removed two rows from its A320s, so it had a lot more legroom in front of the exit row than behind. So why not make some money on that, right? JetBlue moved seats around and created a standard of 34 inches and then gave the seats up front and the exit rows 38 inches that could be sold.
The price was modest, starting at $10 to $20 back in the day, but there was no real risk here.
Over time, JetBlue realized there was more money to be made. It had created “Even More Speed” for a faster ground experience, and it lumped that in as a bundle that could be bought with Even More Legroom. Eventually it lumped everything together into the Even More Space product which launched on June 15, 2011. This included:
- priority security (where it existed)
- priority boarding
- extra legroom on board
This together enabled JetBlue to charge more for the upgrade. It also made for a more appealing benefit to those Mosaic travelers, elites in JetBlue’s loyalty program, who got it for free. But, JetBlue decided there was more money being left on the table, so it has now created EvenMore.
EvenMore has all the stuff mentioned above, but it also has:
- dedicated overhead bins (which I thought existed before but JetBlue tells me it did not)
- free booze (up to 3 drinks per flight)
- a “premium” snack which right now is a bag of little Tate’s cookies
- complimentary headphones upon request
This cabin will now shrink, only being in the rows at the front (or right behind Mint on Mint-equipped aircraft). Anything further back, including exit rows, will now be “extra legroom” seats which will be straight upsells without extra benefits, similar to the current preferred seating. Presumably this is because they need to make service delivery easier. Flight attendants will know that the rows at the front get the freebies instead of having to go row by row through the cabin.
Mosaic elites will get to sit in these seats at the time of booking for top tiers and at the time of check-in for the lowly Mosaic 1s, so it remains an important benefit and incentive for people to maintain elite status. But, above all, this is really about trying to pretty up the EvenMore offering so people will pay more for it. And the airline is trying to push it harder in the initial purchase decision. When you do a search, you now get four colors. Apparently, EvenMore is orange. (Was Even More Space orange? Not sure if this is different.)
When someone selects EvenMore, they pay the base fare plus the ancillary buy-up to EvenMore. This makes it like Spirit and Frontier which have created a bundle, but the ancillary piece still isn’t subject to the federal excise tax.
The question is now, just how much JetBlue can get for this? Am I really willing to nearly double the price I pay for legroom and booze as shown in the example? No way, especially when JetBlue’s regular legroom remains better than average. I am not tall. Tall people might feel differently.
I wish I had the foresight to have done a bunch of searches to see how pricing has changed since the changeover, but I didn’t. A quick search of current pricing, however, shows that so far it looks like longer hauls are coming in around a $150 bump above the standard Blue fare with Europe not much more than that. Mid-hauls are around $75 to $125 while the poor schmuck flying JFK to Hartford on a Tuesday night can pay $30 for 10 minutes of legroom in the air.
These are a far cry from the $20 that JetBlue charged back in the day for legroom from Long Beach to JFK, but they are clearly a work in progress. Over time, revenue management systems will learn about demand and be able to adjust pricing to better fit what people are willing to pay. I’m not sure if they are using variable pricing or dynamic pricing right now — I’d bet on variable at an airline like JetBlue — but eventually I expect there will be more pricepoints that can be applied as demand develops. This has to squeeze more money out of travelers or it won’t have been worth it.
Meanwhile, this product will act a bridge between regular coach and the new domestic-style First Class that’s coming (or Mint where it already exists). It’s going to be a very busy airplane on the inside with a lot of different options, especially for a leisure-focused airline.
I don’t find this improved version of Even More Space to be particularly compelling personally. The free drinks and premium snack are fine and all, but it’s not going to change what cabin I pick. But for JetBlue, it has the booze onboard, and it’s not hard to stock another snack. If this does get some people to pay more, then it’ll have been worth the effort.
