JetBlue Focuses On West As United Moves East

JetBlue’s stock went up by almost 1.5% to $20.23 per share last Friday when the airline announced its plans to offer additional flights with its premium Mint service to customers flying from New York’s John F. Kennedy Airport (JFK), to the West Coast beginning October 25, 2015. The announcement came two days after United decided to shift its premium transcontinental flights from New York to Newark by October of this year. JetBlue aims to strengthen its presence in its home market by offering six daily flights between New York and San Francisco by the Fall of this year, and at least 10 daily flights between New York and Los Angeles by February 2016. The airline has also hinted at further expansions in 2016. While the premium Mint seats will offer a wide range of facilities such as comfortable fully-flat beds, on-board entertainment options, free broadband connectivity, and custom amenity kits, they are expected to cost three times as much as a coach seat on the same flight.

See our detailed analysis for JetBlue here

We believe that JetBlue has been quick to grab an opportunity that has the potential to enhance its bottom-line growth. Here’s why:

• With United moving its premium services out of JFK, JetBlue’s Mint services will be a perfect substitute for elite passengers traveling to the West Coast from JFK. While United will continue to serve the transcontinental markets from Newark, JetBlue will be able to expand its presence in these markets and boost its profits by offering high margin Mint services.
• JetBlue and Delta dominate the JFK market. This competition is likely to intensify when Delta gains additional slots from United. Thus, JetBlue’s proactive move to capture United’s markets, coupled with the popularity of its Mint service, will enable the low cost carrier to face the increasing competition from Delta.
• JetBlue’s additional flights are expected to operate on the new Airbus 321 aircraft, due for delivery in early 2016. This will give the airline a first mover advantage over its competitors and a chance to penetrate the market with the new technology.

 JetBlue’s Price Movement (16th-19th June 2015)

Source: Google Finance

Useful Links:

• Trefis Analysis: Shifting Transcon Flights To Newark Will Improve United’s Profitability
• Trefis Analysis: How Will Oil Price Recovery Impact JetBlue’s Stock Price?
• JetBlue Adds Additional Mint Coast-to-Coast Service From JFK

View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap

More Trefis Research