On Nov 8, 2013, we upgraded our recommendation on passenger
JetBlue Airways Corporation
) to Outperform from Neutral.
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JETBLUE AIRWAYS (JBLU): Free Stock Analysis
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Why the Upgrade?
We believe that JetBlue displays a strong brand name and is
constantly trying to improve its service offerings and in-flight
experience. Additionally, the company's emphasis on enhancing
medium and short haul routes along with its cost control
initiatives should prove beneficial going forward.
We believe JetBlue will benefit from growing travel demand,
schedule redesigning, optimization of unit revenues, capital
expenditure management and disciplined growth. The company's
product differentiation, ticket pricing flexibility and in flight
experience are expected to attract customers.
JetBlue is making continued progress in expanding its product and
service offerings on board and on the ground to increase its
ancillary revenues. Furthermore, JetBlue recently announced the
availability of Mint - a cost effective premium service offering
- which is expected to fuel demand for its luxury seats.
Going forward, the company aims to start services in Worcester,
Massachusetts. Internationally, the company has plans to start
services to Port-au-Prince, Haiti with nonstop daily flights from
both New York City and Fort Lauderdale-Hollywood. Adding new
routes enhances JetBlue's growth prospect and strengthens its
Recently, JetBlue signed an interline agreement with British
Airways, wherein both carriers will connect their networks in the
eastern coast of America, including New York City, Boston Orlando
and Washington D.C. This partnership as well as those with other
carriers strategically fit the company's growth prospects. Based
on these positives we have upgraded our recommendation.
JetBlue Airways currently carries a Zacks Rank #2 (Buy).
Stocks That Warrant a Look
Other stocks that are worth considering within this sector are
U.S. Airways Group Inc.
Spirit Airline Inc.
Alaska Air Group Inc.
). LCC and SAVE currently hold a Zacks Rank #1 (Strong Buy) while
ALK carries a Zacks rank #2 (Buy).