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JetBlue's free checked bag disappears with new pricing system

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JetBlue Airways Corp, in the first major makeover of its fare system, will end a free checked-bag perk but offer passengers more ticket options starting Tuesday.

[DALLAS] JetBlue Airways Corp, in the first major makeover of its fare system, will end a free checked-bag perk but offer passengers more ticket options starting Tuesday.

The move, being introduced as part of its new, three-tiered "Fare Options," leaves Southwest Airlines Co as the only major US carrier not charging for an initial checked suitcase in coach. Passengers have had to get used to paying for every extra amenity on flights, from seats with more leg room, to boarding preferences, to food, as airlines force them to choose between the lowest price or other conveniences.

"JetBlue is very mindful of the perception of this being a good value for the money," said Savanthi Syth, an analyst with Raymond James Financial Inc. "My guess is there isn't going to be a big consumer backlash."

JetBlue is ending the complimentary luggage policy after investors pressured it to improve returns. The company expects the new system to provide at least US$200 million in annual operating income by 2017.

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The new scale offers fare levels dubbed "Blue," "Blue Plus" and "Blue Flex." Frugal travelers who select Blue, the lowest price, must pay to check a bag, while Blue Plus provides one checked bag at no cost and Blue Flex, two bags. Fees for changing or canceling a reservation differ by category.

While pricing will vary, Blue Plus fares will be about US$15 higher than Blue, and Blue Flex about US$85 higher than Blue Plus, the airline said.

"We're only doing this after an immense amount of research," Marty St George, executive vice president of commercial and planning, said in an interview. "We are not taking this lightly. I think once customers experience it, we'll be in great shape."

The new pricing system doesn't affect passengers who already have booked tickets. The airline also offers a Mint premium product available on a limited number of cross-country routes.

JetBlue also plans to increase revenue by packing planes fuller. Starting later this year as many as 130 of its Airbus Group SE A320 jets will be retrofitted with so-called slimline seats, letting the airline accommodate as many as 15 more people on planes that now carry 150.

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