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JetBlue to Get US Assembled Jets

Zacks Equity Research

Leading low cost airline, JetBlue Airways Corporation (JBLU) will be the recipient of the first ever US-assembled jets from Airbus. On Apr 8, Airbus broke ground for its Alabama-based first airplane-assembly plant in the U.S., which is expected to create thousands of jobs and infuse significant capital in the country.

Jetblue will receive the deliveries of the aircraft from the new assembling facility, which is expected to roll out its first fleet of US assembled jets by 2016.

With the robust deployment of aircraft in the near future and a huge existing fleet with over 100 A320s, Jetblue remains well positioned to expand in the domestic market despite the presence of big players like Delta Air Lines (DAL) and United Continental (UAL) and popular low cost airlines like Southwest Airlines (LUV). We believe that JetBlue, via its strong branding and product differentiation, offers customers a unique flying experience.

In the coming months, the company will benefit from growing travel demand, schedule redesigning, cost control measures, optimization of unit revenues, capital expenditure management and disciplined growth. Management continues to focus on achieving long-term sustainable growth, as JetBlue is the only non-unionized airline in the industry with the flexibility to manage its cost structure.

The airline over the past years has been concentrating on launching flights and services to various locations to expand its operational base. In the near term, JetBlue aims to start services in Albuquerque, NM, Philadelphia, PA and Medellin, Colombia.

We believe JetBlue is well positioned for growth due to its distinctive business model, unique on-board services, fuel hedging strategy and strong liquidity positions. The company’s growing presence in key markets and penetration into the untapped arenas will support its growth momentum.

JetBlue currently carries a Zacks Rank #4 (Sell).

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