Impressive Feb Traffic for JetBlue - Analyst Blog

JetBlue Airways Corporation JBLU displayed solid traffic across its network for the month of Feb 2014. The carrier reported airline traffic – measured in revenue passenger miles or RPMs – of 2.64 million, up 5.2% year over year. Consolidated capacity (or available seat miles/ASMs) was also up 6.3% year over year at 3.23 billion.

The load factor or percentage of seats filled by passengers, however, was 81.6%, down 80 basis points. Passenger revenue per available seat mile (PRASM) increased 7% year over year, including a 1% positive impact of harsh winter storms in February. The company registered a completion factor of 94.5%, with on-time performance of 64.6%.

In the first couple of months this year, JetBlue generated RPMs of 5.42 billion (up 2.4% year over year) and ASMs of 6.60 billion (up 2.2% year over year). Load factor, moved up to 82.2% from the year-ago figure of 82.0%.

JetBlue is expected to benefit from product introductions, ancillary revenue opportunities and a matured network. The company's growing presence in key markets and penetration into untapped arenas will support its momentum.

Further, the company has won bids to purchase take-off and landing slots at Reagan National Airport DCA in Washington. The slot purchase is part of a mega merger deal between American Airlines and U.S. Airways Group that led to the formation of American Airlines Group Inc. AAL.

Recently, the carrier announced the plan to add two daily flights to Charleston, Hartford and once daily to Nassau from DCA, starting Jun 19, 2014. Further, JetBlue plans to add 24 daily round trip departures from DCA to eight cities in 2014, thus bringing the total departures from DCA to 30.  

These additional flights will allow JetBlue to gain a significant portion of the Washington air service market if it can price fares attractively. JetBlue Airways carries a Zacks Rank #2 (Buy).

Other stocks worth considering within this sector are Southwest Airlines Co. LUV and Alaska Air Group Inc. ALK. Southwest carries a Zacks Rank #1 (Strong Buy) while Alaska Air carries the same rank as Southwest.