Unbundling Is Working For Jet Blue

Jet Blue took unbundling air travel one step farther than most airlines did. They started charging their customers for more legrooms, airline blankets and pillows. Once again, the customer has the option of not buying, so this qualifies as unbundling and not partitioning. JetBlue reported that this unbundled pricing is on track to bring in $60 million this year.

There is some product innovation is included in JetBlue's unbundling. For example JetBlue claims that they are giving them eco-friendly fabric that eliminates dust and pollen. So they eliminated the free option and trying to increase the perceived value of the product through branding and messaging.

The opportunity to serve the needs of high value customers, those with higher RP, is made possible by unbundling their product. On the flip side, there is bound to customer backlash if they get the same old bad service for the additional fee. The baggage fee does look like one. While they try to capture value from those who have a need to check-in bags, the airlines are not offering an improvement.

This is an important takeaway in managing customer perception. If the unbundling is complemented with increase in perceived value, there is a better chance of customer acceptance.