Market Struggles to Decipher Consequences of JetBlue Partnership Announcement

Today, JetBlue announced a partnership with Air China to coordinate connection flights between the two airlines. Signaling that investors might disagree about how this partnership will play out for JetBlue, shares of JetBlue shifted between negative and positive territory several times today. Fred Lowrance, Senior Research Analyst at Avondale Partners, says that he cannot see any significant expenses from the partnership and that the deal is a way for JetBlue to get incremental passengers on their flights. Lowance comments that the deal will allow passengers to more seamlessly book trips with JetBlue and Air China flights. He also notes that JetBlue has had similar agreements in the past with airlines such as Hawaiian Airlines HA and Japan Airlines. JetBlue announced its partnership with Hawaiian Airlines late last month and announced its codeshare agreement with Japan Airlines in April. In addition, Lowance comments that the deal will be positive for JetBlue, but notes that it is very difficult to measure the incremental revenue from partnerships like the one announced today. Shares of JetBlue were trading approximately flat for the day and around 8.3% lower over the past 12 months. Shares of Delta Air Lines DAL and Southwest Airlines LUV traded lower today.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.