Close on the heels of winning bids to purchase take-off and landing slots at Reagan National Airport (DCA) in Washington, DC, JetBlue Airways Corp. (JBLU - Analyst Report) announced plans to expand its operations from the airport. Apart from expanding JetBlue’s reach, the new low fare services from DCA will strengthen the carrier’s operations in the capital city.
The New York based carrier plans to add two daily flights to Charleston, Hartford and once daily to Nassau from DCA, starting Jun 19, 2014. Further, JetBlue will add another daily service from DCA to Tampa, FL. The carrier will use a 100-seater Embraer SA (ERJ - Analyst Report) E190 for the service.
In January, JetBlue won 40 new take-off and landing slots at DCA, including the 16 that it leased from American Airlines. The slot purchase is part of the mega merger between American Airlines and U.S. Airways Group Inc. – to form American Airlines Group Inc. (AAL - Analyst Report) – which required the carriers to give up 52 take-off and landing slots at DCA and 17 pairs at New York’s LaGuardia Airport.
The company plans to add 24 daily round trip departures from DCA to eight cities in 2014. JetBlue also plans to add Orlando, Fort Lauderdale and Boston within the domestic market apart from extending its service to San Juan, Puerto Rico, thus bringing the total departures from DCA to 30.
However, the attractiveness lies in the company’s introductory fares. JetBlue’s one-way fares of below $100 in the above-mentioned domestic destinations are pocket friendly. The low fare tickets will be available for summer travel between June and Jul 2014 subject to receipt of government's operating approval.
JetBlue is complying with the Department of Justice (DOJ), which had earlier argued that the opening up of American Airlines and U.S. Airways slots to rival carriers will enhance accessibility at some of the busiest airports and simultaneously heighten competition.
We believe that the 42 million population of Washington will benefit the most from JetBlue’s expanded coverage and reduced average fares.
JetBlue carries a Zacks Rank #2 (Buy). Another stock worth considering within this sector is Southwest Airlines Co. (LUV - Analyst Report) , which carries a Zacks Rank #1 (Strong Buy).