Back to top

Analyst Blog

JetBlue Airways (JBLU - Analyst Report) has agreed to purchase 110 ship-sets of retrofit Sharklets from leading aircraft manufacturer – Airbus. Per the letter of intent signed between the two companies, the Sharklets will be utilized for the carrier’s A320 aircraft that are in service. Although none of the companies disclosed the financial terms of the deal, deliveries are expected in 2014.

A week earlier, JetBlue displayed the first A320 aircraft that will be retrofitted with Sharklet wing tips. Designed with innovative and advanced technologies, these wing tip devices will enhance the aerodynamics of Airbus aircraft, thereby reducing fuel emissions by almost 4%.  

Sharklets will aid the JetBlue aircraft in adding an extra 100 nautical miles or boost the payload capability by up to 1,000 pounds. The New York based airline is the first carrier in North America to fly with Sharklets. The company will also possess the biggest A320 fleet with Sharklets in the world, once the deal is completed. All future aircraft delivered by Airbus to JetBlue will be equipped with the new feature.

A top executive at JetBlue stated that the company is hopeful that this development will help it to optimize its performance level and render better and efficient services.

Of late, JetBlue is concentrating on re-designing its fleet structure and making heavy investments to improve the standard of its aircraft. With the addition of novel and attractive features, the company aims to offer customers a unique flying experience.  

JetBlue has the youngest and most fuel-efficient fleet – consisting of 127 Airbus A320 aircraft and 53 EMBRAER 190 aircraft – among the other major U.S. airlines such as United Continental Holdings Inc. (UAL - Analyst Report), Delta Air Lines Inc. (DAL - Analyst Report) and Southwest Airlines Co. (LUV - Analyst Report).

JetBlue currently holds a Zacks Rank #3, implying a short-term Hold rating. We believe JetBlue is well positioned for growth due to its distinctive business model, strong brand name, superior in-flight services, fuel hedging strategy, strong liquidity positions and a non-unionized workforce. The company’s growing presence in key markets and penetration into untapped arenas will support its growth momentum.

Please login to Zacks.com or register to post a comment.