State of the Airlines

Thursday, January 27, 2005

NEWS: JetBlue Beats the Guess-timators

JetBlue announced a $2.4 million profit for the 4th Quarter. That's not a huge number but it beat the analyst (aka the guess-timators) who were expecting a loss for the airline. It appears that fuel hedging carried the day for JetBlue much like it did for Southwest Airlines in 2004. JetBlue has turned a profit every quarter since they went public in April 2002 making it the darling of Wall Street. It will be difficult to continue that streak through 2005 since fuel prices do not show any sign of a major decline. Furthermore, there is some manuevering among the low fare carriers that will place more competitive pressure on JetBlue. We saw this most recently with the announcement of new routes for budding low cost carrier Song. But JetBlue remains well capitalized, their leadership seems adept at reacting to the market and their business plan seems will be an interesting year.

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