雅虎香港財經 JetBlue Airways (JBLU) to Drop Some Non-Profitable Routes
JetBlue Airways JBLU has decided to stop operating on some non-profitable routes in a bid to improve its financial performance. The carrier currently has limited planes in its fleet following a snag with RTX's Pratt & Whitney geared turbofan that powers Airbus A320neo jets.
Due to this incident, JetBlue had to pull seven planes out of service. The number of planes withdrawn from service is expected to reach 15 by the year-end. Given the shrunk fleet-size, the decision to trim its network appears prudent.
Apart from eliminating certain routes and markets, JetBlue has decided to reduce service in Los Angeles. The non-materialization of the Spirit Airlines SAVE buyout by JBLU has prompted the latter to “refocus” on Los Angeles, per its network planning head, Dave Jehn. The carrier has decided to focus on better-performing routes instead.
JBLU terminated the deal with SAVE earlier this month as management believed that the legal and regulatory approvals necessary for the deal’s success “were unlikely to be met” by the dates specified. Moreover, in January, a federal judge had blocked JetBlue’s planned $3.8 billion takeover of Spirit Airlines, citing competition concerns. The judge believed that if the merger materializes, it would drive up fares.
Following the above merger failure, limited fleet availability and a change at the helm, JetBlue has decided to trim its network, eliminating flights to some major South American cities. From Jun 13, it will no longer fly to Kansas City, MO, Bogota, Colombia, Quito, Ecuador and Lima, Peru. From June, the carrier will also drop several destinations from Los Angeles, including Seattle, San Francisco, Las Vegas and Miami. JBLU, whose last profitable year was 2019, has seen its stock decline 3.4% over the past year against its industry’s 12.3% growth.
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Zacks Rank & Key Picks
JetBlue currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader Transportation sector may consider better-ranked stocks like GATX Corporation GATX and SkyWest (SKYW). SKYW currently sports a Zacks Rank #1 (Strong Buy) and GATX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GATX has an encouraging track with respect to its earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters and missing once, the average beat being 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 9% upward over the past 90 days. The company has an expected earnings growth rate of 6.5% for 2024. GATX shares have rallied 23% in the past year.
SkyWest's fleet modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 26% over the past 90 days. SkyWest shares have surged 250% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. The company delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
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