JetBlue Airways expects ancillary revenue to grow by between 10% and 15% in 2013, as it reaps more financial benefits from its extra legroom seats and expedited security products.
Ancillary revenue at the New York-based carrier grew 10%, or $50 million, in 2012, says the airline's chief financial officer Mark Powers in an earnings call today. "Ancillary revenue continues to be an ongoing focus, helping to drive 2012 record revenue performance," he says.
JetBlue posted $4.98 billion in operating revenue in 2012, of which $4.55 billion was passenger-related revenue.
The growth in ancillary revenue in 2012 was largely driven by JetBlue's Even More offering, says Powers. Even More refers to Even More Space, JetBlue's extra legroom seating product, and Even More Speed, which allows passengers to use an expedited security line for a fee. Passengers who purchase Even More Space receive the expedited security service as well, and travellers can purchase Even More Speed on its own.
The Even More product generated $150 million in revenue in 2012, up from $120 million in 2011, says Powers. The product, which has not "come into its full flower", is expected to contributed to the growth in ancillary revenue in 2013, he adds.
JetBlue is studying the pay performance structures of some workgroups to drive sales of Even More, says Powers. "We expect a lot more effort behind selling that high margin product," he adds.
The airline completed the reconfiguration of its Embraer 190s in October 2012 with additional Even More Space seats, adding two additional rows of such seats and taking the total number to 16 per aircraft. JetBlue also offers Even More Space on its Airbus A320s and will take delivery of new A321s in late 2013 with the extra legroom product as well.
Separately, the airline's chief executive Dave Barger says today the airline will begin the installation and certification process for wi-fi on its first aircraft later in the first quarter.
JetBlue will offer Ka-band wi-fi to passengers on board when the installations are complete, and has said that it plans to offer it for free until at least 30 aircraft are equipped with the technology.