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JetBlue Updates High-Margin TrueBlue Loyalty Program

Edward Russell

May 10th, 2023 at 1:24 PM EDT

A JetBlue TrueBlue loyalty program mural at JFK

JetBlue Airways has joined many of its peers in updating its lucrative loyalty program, TrueBlue, to better reward those travelers who spend the most on the airline.

The updated program that launched Wednesday includes new elite “Mosaic” tiers and perks, including free drinks, business class upgrades, and even free helicopter transfers between New York’s JFK airport and Manhattan. The program also integrates JetBlue’s travel businesses, including Paisly and JetBlue Vacations, into both earnings and redemptions.

The TrueBlue updates come as JetBlue becomes a larger global player. The airline launched transatlantic flights to London in 2021, and will expand to Amsterdam and Paris this summer. Its proposed merger with Spirit Airlines would make it the second largest airline in terms of seats — behind only American Airlines — between the U.S. and the Caribbean and Latin America. And JetBlue’s alliance with American in the northeast has funneled significantly more lucrative corporate travelers who want elite perks onto its flights.

But the biggest driver of JetBlue’s loyalty updates is simple: Money. Loyalty is a big, high-margin business for airlines. JetBlue generated $100 million on loyalty-related revenues in the first quarter; that represents a 14 percent year-over-year increase, and a dramatic 133 percent increase over 2019. For comparison, passenger revenues increased only 21 percent from the first quarter of 2019 through 2023.

JetBlue, like most airlines, does not disclose the profit margin on its loyalty business but historically these segments have very low costs. For example, Delta Air Lines generated an eye-popping 99 percent net margin on its loyalty program — one of the most profitable in the business — in 2019.

“Our TrueBlue loyalty program also continues to show exceptional growth,” JetBlue President Joanna Geraghty said in late April. “Co-brand card spend and active membership increased by over 20 percent in the first quarter. And we forecast continued strength as we launch our newly redesigned TrueBlue program.”

JetBlue partners with Barclays on its co-branded credit card.

In addition to the revenue benefits, strong loyalty programs also increase customer stickiness and drive repeat business. This, of course, has long been the airline industry’s argument for such programs: To keep people coming back for more.

JetBlue’s loyalty and other revenues, despite their growth, remain a small part of its business. In the first quarter, they represented just 7 percent of the $2.3 billion in revenues at the airline.

Edward Russell

May 10th, 2023 at 1:24 PM EDT

Tags: North America

Photo credit: A JetBlue TrueBlue loyalty program mural at JFK JetBlue

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