Though airlines had a banner 2013, this year is off to a pretty
rocky start for the industry. Difficult conditions at many of
America's major airports have led to a huge number of cancellations
and have created a ripple effect throughout the country.
While this trend hit a number of major airlines,
appears to really be struggling. The surging airline was an
all-star in 2013 but the latest round of storms have wreaked havoc
on its Northeast-U.S. focused service, leading to massive delays
In fact, JBLU announced that it was suspending all flights from its
New York-area airports, as well as its Boston hub from 5pm Eastern
Time on Monday until 10am Eastern Time on Tuesday. In total,
JetBlue cancelled more than half of its daily schedule, according
to Anders Lindstrom, a spokesman
This pause in service looks to allow the company to catch up and
reposition its planes in order to meet demand. Obviously, it will
inconvenience many travelers, though at least it will avoid issues
of passengers being stuck on the tarmac and other problems which
JetBlue and other airlines have faced in the past.
"While we have to reduce operations in our Northeast cities today,
we'll take the opportunity to use some of those planes and crews
for extra sections between cities where we they're most needed and
move crews in preparation for starting back up on Tuesday,"
JetBlue said on its website
according to Bloomberg.
Shares of JetBlue faced some serious turbulence on the news, with
JBLU slumping by over 4.3% in the session. Volume was elevated too,
with more than 10.5 million shares moving hands on the day.
And unfortunately for JBLU, many other airline stocks weren't as
hard hit by the storms-nor do many have such a concentrated focus
on some of the hardest hit areas- so their stocks managed to hold
up well in Monday trading.
United Continental (
Southwest Airlines (
fell by about 1.4% on the session, as Southwest was hampered by
Chicago Midway issues, and United-with a big presence both at
O'Hare and Newark-- was also hit.
both finished the day in the green with AAL actually rising by
about 1.8% on the day. Many regional carriers were not lucky
either, though JBLU was clearly the loser on the day in the airline
This is obviously a setback for JBLU, though some could view it as
an attempt to get ahead of the situation instead of playing catchup
over the next few days. Weather is anticipated to be quite poor in
the Northeast over the next few days and delays for other airlines
are certainly possible.
Given this, and assuming this doesn't cause analysts to revise
their estimates of JBLU's earnings, this could present an
interesting buying opportunity for the stock. The company currently
has a Zacks Rank #2 (Buy), and the airline segment is currently in
the top 9% of all industries.
Just note that the company has had significant weather troubles
before, so be ready for some more short term volatility if the
company can't get back to its full schedule soon. But if JBLU can
rebound from this, and if the solid trends underpinning the airline
market remain, this could be a great time to take a closer look at
this company and other beaten down firms in the airline space.
Want more insights from Zacks? See our latest free report
5 Stocks to Double
Click here to receive this free report now
Author is long LUV.
AMER AIRLINES (AAL): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis
JETBLUE AIRWAYS (JBLU): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis
To read this article on Zacks.com click here.