JetBlue paid for ending change fees by taking overhead bins from its cheapest fares

On February 16, 2021 JetBlue announced that from July 20 it would eliminate ticket-change fees on most fares and guarantee overhead bin space for standard coach fares up to Mint business class — promising a $25 credit if it could not make good. Blue Basic, the airline's cheapest option, would be prohibited from using overhead bin space, a restriction United Airlines had put in place when it started selling no-frills basic economy tickets in 2017.

President and COO Joanna Geraghty told staff the point was differentiation: "Currently, our Blue and Blue Basic offerings are very similar to each other. We need to better differentiate the two by making Blue the gold standard, while strategically focusing on lowering the price of Blue Basic." Airline executives have long said these no-frills fares exist to compete with Spirit and Frontier, which make a bulk of their revenue from add-on fees for bags and seat selection — while hoping many travelers avoid them and pay more for standard economy.

Discount carriers make much of their revenue from add-on fees, and JetBlue needed a cheaper floor fare to compete.

Blue and Blue Basic were too similar to each other to justify a meaningful price gap.

Bin access matters enough to travelers that removing it makes the cheap fare genuinely differentiated rather than artificially cheap.

A product line you want customers to avoid still has a job: make it visibly worse on purpose so the good option can be both better and honestly priced.

The policy was set to take effect July 20, 2021, during a pandemic when few people were traveling — the carrier noted that guaranteeing bin space was a relatively easy feat under those conditions, while calling bin space a "major pain point" for travelers at boarding in normal times.