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Lessons from JetBlue in focus and accountability

If you ask the typical airline revenue manager to include bag fees in his objective of maximising passenger revenue, he is unlikely to do anything differently. He is forecasting demand for each flight for the next six to 12 months in $15-$50 fare increments – demand for $79 seats, demand for $99 seats, and so on – so an average revenue gain of $10-$15 from bag fees (50% probability x $25) doesn’t really change what he should do. He will continue to monitor demand, intervene when appropriate, and let the system allocate seats accordingly. Bag fees will be ‘gravy’.

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