We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should JetBlue's Mint Expansion Bother Rival Airlines?
Read MoreHide Full Article
In a bid to meet the surge in demand, JetBlue Airways (JBLU - Free Report) announced that it intends to expand its premium service (Mint). Following the move this low-cost carrier intends to operate 70 Mint flights by Dec 31, 2017. In fact, the carrier aims to offer the service for approximately one out of 14 JetBlue operated flights.
JetBlue’s Mint service has gained tremendous popularity, particularly among the corporate class, since it was launched in 2014. This is mainly because of its affordability compared to the charge on business travel imposed by its peers. In fact, prior to the introduction of its Mint service, JetBlue had offered only coach-class seats to its customers. Now, customers availing JetBlue’s premium service have access to the comfort of lie-flat beds, private suites, 15-inch video screens in addition to other special amenities.
Does the Mint Expansion Ring Alarm Bells?
Last year, JetBlue Airways lost out to Alaska Air Group (ALK - Free Report) in its bid to buy Virgin America and expand significantly particularly on the West coast. Virgin America was acquired by Alaska Air Group in Dec 2016. Apart from expanding significantly on the West Coast, Alaska Air Group gained significant growth opportunities in key East Coast markets following the merger.
JetBlue’s efforts to expand its premium “Mint” service to include West Coast destinations like Los Angeles, San Francisco, San Diego and Seattle, seems to be its response to the failed bid.
Apart from Alaska Air Group, other carriers like Southwest Airlines (LUV - Free Report) too have a significant presence on the West Coast. Only time will tell, if JetBlue’s move pertaining to its Mint service elicits any response from the likes of Alaska Air Group and Southwest.
Airlines Constantly Investing to Improve Infrastructure
It is a well-documented fact that carriers are currently in solid financial health. The decline in oil prices has resulted in significant savings over the past few years, thereby boosting their balance sheets. Although oil prices are on their way up, the current level of around $50 a barrel is nowhere near the $100+ a barrel witnessed in mid-2014.
Naturally, carriers are investing significantly to improve the flying experience of passengers, which in turn will attract more fliers and boost their top lines. In fact, JetBlue’s announcement to expand its Mint service is also in line with the strategy to improve the travelling experience of passengers.
Threat of Low-Cost Carriers
We note that the success of low cost carriers like JetBlue, Southwest Airlines and Spirit Airlines (SAVE - Free Report) have raised concerns for legacy carriers like American Airlines Group (AAL - Free Report) and United Continental Holdings (UAL - Free Report) . In a price-conscious economy, it is not just the survival of the fittest, but of the cheapest.
In a bid to combat the threat of low-cost carriers and attract budget-conscious travelers both the above- mentioned legacy carriers have recently started to sell cheaper tickets (Basic Economy Fares).
The success of offerings like JetBlue’s Mint has contributed to the success story of low cost carriers, making legacy carriers uneasy. Consequently, it will be interesting to see how legacy carriers like Delta Air Lines (DAL - Free Report) and American Airlines react to JetBlue’s move to expand its premium service.
Price Performance
The threat to legacy carriers from low-cost ones is exemplified by the fact over the past one month the likes of JetBlue and Spirit Airlines have not only outperformed the likes of Delta and American Airlines but also performed better than the Zacks categorized Transportation-Airline industry.
The JetBlue stock has emerged as the leading performer returning 1.5% while Delta and American Airlines are the biggest laggards shedding 10% and 12.6% respectively over the last 1 month. The Zacks categorized Transportation-Airline industry has contracted 5.2% during the period.
Given the recent solid price performance of JetBlue, the expansion of its popular Mint service is expected to further boost the stock.
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Should JetBlue's Mint Expansion Bother Rival Airlines?
In a bid to meet the surge in demand, JetBlue Airways (JBLU - Free Report) announced that it intends to expand its premium service (Mint). Following the move this low-cost carrier intends to operate 70 Mint flights by Dec 31, 2017. In fact, the carrier aims to offer the service for approximately one out of 14 JetBlue operated flights.
JetBlue’s Mint service has gained tremendous popularity, particularly among the corporate class, since it was launched in 2014. This is mainly because of its affordability compared to the charge on business travel imposed by its peers. In fact, prior to the introduction of its Mint service, JetBlue had offered only coach-class seats to its customers. Now, customers availing JetBlue’s premium service have access to the comfort of lie-flat beds, private suites, 15-inch video screens in addition to other special amenities.
Does the Mint Expansion Ring Alarm Bells?
Last year, JetBlue Airways lost out to Alaska Air Group (ALK - Free Report) in its bid to buy Virgin America and expand significantly particularly on the West coast. Virgin America was acquired by Alaska Air Group in Dec 2016. Apart from expanding significantly on the West Coast, Alaska Air Group gained significant growth opportunities in key East Coast markets following the merger.
JetBlue’s efforts to expand its premium “Mint” service to include West Coast destinations like Los Angeles, San Francisco, San Diego and Seattle, seems to be its response to the failed bid.
Apart from Alaska Air Group, other carriers like Southwest Airlines (LUV - Free Report) too have a significant presence on the West Coast. Only time will tell, if JetBlue’s move pertaining to its Mint service elicits any response from the likes of Alaska Air Group and Southwest.
All the above-mentioned carriers carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Airlines Constantly Investing to Improve Infrastructure
It is a well-documented fact that carriers are currently in solid financial health. The decline in oil prices has resulted in significant savings over the past few years, thereby boosting their balance sheets. Although oil prices are on their way up, the current level of around $50 a barrel is nowhere near the $100+ a barrel witnessed in mid-2014.
Naturally, carriers are investing significantly to improve the flying experience of passengers, which in turn will attract more fliers and boost their top lines. In fact, JetBlue’s announcement to expand its Mint service is also in line with the strategy to improve the travelling experience of passengers.
Threat of Low-Cost Carriers
We note that the success of low cost carriers like JetBlue, Southwest Airlines and Spirit Airlines (SAVE - Free Report) have raised concerns for legacy carriers like American Airlines Group (AAL - Free Report) and United Continental Holdings (UAL - Free Report) . In a price-conscious economy, it is not just the survival of the fittest, but of the cheapest.
In a bid to combat the threat of low-cost carriers and attract budget-conscious travelers both the above- mentioned legacy carriers have recently started to sell cheaper tickets (Basic Economy Fares).
The success of offerings like JetBlue’s Mint has contributed to the success story of low cost carriers, making legacy carriers uneasy. Consequently, it will be interesting to see how legacy carriers like Delta Air Lines (DAL - Free Report) and American Airlines react to JetBlue’s move to expand its premium service.
Price Performance
The threat to legacy carriers from low-cost ones is exemplified by the fact over the past one month the likes of JetBlue and Spirit Airlines have not only outperformed the likes of Delta and American Airlines but also performed better than the Zacks categorized Transportation-Airline industry.
The JetBlue stock has emerged as the leading performer returning 1.5% while Delta and American Airlines are the biggest laggards shedding 10% and 12.6% respectively over the last 1 month. The Zacks categorized Transportation-Airline industry has contracted 5.2% during the period.
Given the recent solid price performance of JetBlue, the expansion of its popular Mint service is expected to further boost the stock.
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>