JetBlue expects fare, fee hikes to continue

NEW YORK — JetBlue is tacking on surcharges on flights to the Caribbean to cover its rising fuel bill, and said airlines should continue to pass these costs on through higher fares.

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The New York airline said it's glad to see that airlines are raising fares to cover the price of fuel, their largest expense.

JetBlue expects to pay 17 percent more for fuel in the first three months of the year than it did in the fourth-quarter. Fuel jumped 16 percent in the October-to-December period from the year before. The airline raised ticket prices by about 4 percent in the fourth-quarter and recently added a $35 fuel surcharge for flights in or out of Puerto Rico and $45 for Caribbean destinations.

JetBlue hopes to get 20 percent more in fees this year. Passengers on average paid $20 apiece in extra fees in the fourth-quarter, mostly for more spacious seats. For all of last year, travelers paid $85 million to sit in seats with "Even More Legroom."

The airline was tripped up by higher costs, mostly for fuel, in the fourth-quarter. A massive winter storm in December walloped its home base of New York and slammed operations in Boston, where it is the biggest domestic airline by passengers. JetBlue estimated that the storm cost $30 million in lost revenue.

The airline canceled around 375 flights on Wednesday and Thursday after another big storm rolled into the Northeast. Traffic improved by about 10 percent from a year ago.

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JetBlue plans to expand the number of available seats it offers, or capacity, by about seven to nine percent this year. That will mostly be through continued expansion in Boston and the Caribbean, where JetBlue has been aggressively adding service while bigger airlines have pulled back.

JetBlue increased flights in Boston by 30 percent in 2010 over 2009, and expects to reach 100 daily flights there by this summer. It predicts that about one-quarter of its flights will be in and out of the Caribbean this year. The company has 600 daily flights.

It says its efforts to lure more business travelers, especially in Boston, are paying off. The airline made changes last year to make its flights more attractive to corporate customers, who tend to pay more. That included adding an early boarding option for those who paid more for extra legroom seats, adding more convenient flight times and offering refundable fares.