Jetblue is taking on ultra low-cost carriers by slashing its basic economy fares. The New York-based budget airline also announced it will eliminate change and cancellation fees on standard fares.

Jetblue said its basic economy (Blue Basic) and standard economy (Blue) fares were previously very similar. By lowering basic economy fares while cutting the carry-on allowance for these travellers, Jetblue believes it will be better positioned to attract price-conscious passengers from competitors such as Frontier Airlines and Spirit Airlines.

In the three years prior to the pandemic, ultra low-cost carriers grew nearly 90 per cent in Jetblue markets. They now overlap with nearly half of Jetblue’s routes, according to the airline.

Additionally, Jetblue will join other US carriers in eliminating change and cancellation fees for standard fares (Blue, Blue Extra, Blue Plus, and Mint fares). It will guarantee overhead bin space for carry-on bags for travellers on these fares.

Meanwhile, passengers on basic economy fares will still be able to change or cancel tickets for a fee, in a contrast to industry peers which do not allow modifications after booking.

“Jetblue has never been afraid to change, finding ways to disrupt the market with low fares and great service – all while living our mission to inspire humanity,” said Joanna Geraghty, President and Chief Operating Officer at Jetblue, in a memo to employees.

“Now, we must be open to changing again so we can keep our competitors on their toes while also rebuilding the financial foundation of our company as we emerge from the pandemic.”