JetBlue Airways next month will begin accepting Universal Air Travel Plan, the centrally billed payment process used primarily for airfares. JetBlue director of sales Noreen Courtney-Wilds last week said she expects the launch to take hold within "the next four to six weeks."
The move represents another opportunity for the airline to cut costs, this time through the use of a lower-fee alternative to traditional corporate cards.
"Low-cost carriers are taking a look at the business model," said UATP vice president of marketing Ken Murphy. "They're cutting costs everywhere else. They can't do much about fuel costs, but now they're cutting the costs of credit cards."
Murphy said 95 percent of bookings with JetBlue are processed through the airline's Web site. The company also has made booking more accessible to corporate travelers with the launch this spring of its corporate booking portal, CompanyBlue, where a UATP account can be lodged when travelers book. "Now that we have CompanyBlue, it ties in nicely," Courtney-Wilds said. "We've been working on adding UATP as a form of payment for a while. A lot of companies we meet with use that card to purchase travel."
Among those companies is Taro Pharmaceuticals Industries Ltd. Robin Buzzeo, corporate travel manager at Taro and longtime UATP user, has joined UATP and other buyers in aggressively courting the carrier for acceptance. "We were on CompanyBlue, but we couldn't use it unless they put the UATP card on there, because that's our mode of payment," she said. "It will absolutely incentivize us to use the portal."
UATP president Ralph Kaiser told BTN earlier this year that the company was working on adding more low-fare carriers to its roster of merchants. In addition to more than 200 airlines that accept UATP, JetBlue joins Southwest as the second U.S.-based low-fare carrier to accept the payment method.
UATP also said Ireland-based low-cost carrier Ryanair would begin accepting UATP early next year. Ryanair has campaigned against high fees imposed by charge card merchants, particularly American Express. The carrier last June stopped accepting the card for payment, stating the "charges are substantially higher than those of the other major credit card issuers
(BTN, June 23, 2003)."
"We have Southwest and JetBlue and Ryanair," Murphy said. "Everyone is always looking at those three models when looking at how they can do things at a lower cost and more efficiently. There are other low-cost carriers in Europe that will be coming on very soon. We're really looking for a low-cost issuer."
In addition to deflecting the higher fees charged by other card vendors, UATP airline issuers have the opportunity to earn merchant fees when an account they issue is used on another airline.
When clients use a UATP account for airfares, airline issuers pay no commission fees, compared with charges of up to 3 percent charged on other cards. If the card is used on another airline, the issuer earns transactional fees.