Investment Research Analysis Risk Management JetBlue Airline

Headquarters: Long Island City, Queens, New York

Number of Employees: 22,000+ (02/22/2022)

Fleet Size: 285

Departures: 1000+ daily (04/04/2019)

JetBlue is a major American low-cost airline. It was born at JFK in 2000, and now JetBlue is a global, award-winning travel company. In August 1998, JetBlue was incorporated in Delaware with its headquarters in Forest Hills, Queens. The company was founded in August 1999, under the name “NewAir”. JetBlue started by offering low-cost travel but sought to distinguish itself by its amenities, such as in-flight entertainment.

From 2000 to 2005, JetBlue had grown steadily by purchasing more planes and extending its travel routes.

From the fourth quarter of 2005 to 2007, JetBlue had gone through several major crises that brought the company chaos and losses.

From 2008, JetBlue began to partner with other companies during the recovery. Then JetBlue started to expand its territory again worldwide, expanding travel routes and adding more products. JetBlue is often ranked as the “Highest in Customer Satisfaction Among Low-Cost Carriers in North America”. Recently on July 28, 2022, JetBlue announced it had reached an agreement to purchase Spirit Airlines for $3.8 billion.

Founder: David Neeleman

Brief Background:

David G. Neeleman is a Brazilian-American businessman and entrepreneur who has founded five commercial airlines: Morris Air, WestJet, JetBlue Airways, Azul Brazilian Airlines, and Breeze Airways.

Specialization:

David Neeleman is known for Commercial Airline Entrepreneurship

Position before the Company:

1988-1993  President of Morris Air

1993(5 months)  Executive Planning Committee of Southwest Airlines

1993-1998  CEO of Open Skies

Previous Position in the Company:

1999-2007 CEO of JetBlue

1999-2009 Chairman of the board of JetBlue

Ownership Stake in the Company:

Type: Insider

Amount: 5.45%

David Neeleman may be actively financially invested as he just funded a new US airline called Breeze Airways in 2018, and the airlines had just commenced in 2021.

Robin Hayes

Background:

Robin Hayes is an American politician and businessman from North Carolina.

Position: CEO

Qualifications:

Graduate from Duke University

The Republican nominee for governor in 1996

A member of the Republican Party, he represented North Carolina’s 8th congressional district in the House of Representatives from 1999 to 2009

Chairman of the North Carolina Republican Party from 2011 to 2013, and from 2016 to 2019

Joanna Geraghty

Background:

Joanna joined JetBlue in 2005, first as the airline’s vice president and associate general counsel, as director of Litigation and Regulatory Affairs, and as the executive vice president and chief people officer from 2010 to 2014. Previously, she served as a partner at the law firm Holland & Knight.

Position: President & COO

Qualifications:

College of Holy Cross (B.A Sociology)

Syracuse University-Maxwell School (M.A International Relations)

Syracuse University College of Law (JD Law)

Skills: Aviation, Airlines, Program management

Peter Boneparth

Background:

Director since 2008. Current Chair of the Board. Former Senior Advisor to a division of The Blackstone Group, LLP, advising on the retail industry, from February 2018 to August 2021. Former Senior Advisor, Irving Place Capital Partners, a private equity group, from 2009 to 2014. Former President and Chief Executive Officer of Jones Apparel Group, a designer and marketer of apparel and footwear, from 2002 to 2007.

Position: Chairman

Qualifications: Director at Kohl’s

Graduated from the University of North Carolina and from University of Virginia

Ursula Hurley

Background: 

Previously the Head of Treasury and Investor Relations at JetBlue Airways

Position: CFO

Qualifications: Fairfield University (B.A)

Columbia University in the city of New York(M.B.A)

Skills: Aviation, Airlines, Aircraft, accounting, financial planning and analysis, investor relations, and treasury

Personal Quality: Results driven, experienced and passionate

Monte Ford

Background:

Monte E. Ford joined Akamai in June 2013 as a director. He currently serves as the Principal Partner of the CIO Strategy Exchange, Network Partner of Brightwood Capital Advisors, which provides growth capital to growing mid-market businesses, and Industry Advisor to Brightwood Capital Advisors, LLC.

Position: Director

Qualifications: Graduate from Northeastern University

Skills: E-commerce and its application in multiple business verticals

B.Ben Baldanza

Background:

Basil Ben Baldanza (born December 3, 1961) is an economist and was the chief executive officer and president of Spirit Airlines from 2005 to 2016, a period in which he led the transformation of the company into an ultra-low-cost carrier

Position: Director

Qualifications: Syracuse University (B.A of policy studies and economics)

Princeton University (M.A of Public Affairs)

Ellen Jewett

Background:

From 2010 to 2015, Ellen was the managing director of U.S. Government and Infrastructure for BMO Capital Markets covering airports and infrastructure banking. Prior to that, she spent more than 20 years at Goldman Sachs specializing in airport infrastructure financing, most recently serving as head of the public sector transportation group, and previously, as head of the airport finance group. Her expertise includes domestic and international finance, investment, and talent management. She also serves on the board of JetBlue Airways.

Position: Director

Qualifications: Wesleyan University(B.A of Government)

University College London(M.A of psychoanalytic theory)

Yale University (M.A of public and private management )

The managing director of U.S. Government and Infrastructure for BMO Capital Markets covering airports and infrastructure banking

Managing partner of Canoe Point Capital, LLC

Skills: Airport infrastructure financing, domestic and international finance, investment, and talent management

Robert Leduc

Background:

Began career in aerospace engineering at Pratt & Whitney, holding roles of increasing leadership responsibility in program management, strategy and customer support before being named Senior Vice President, Engine Programs & Customer Support in 1995. In 2000, was appointed President of Large Commercial Engines and Chief Operating Officer.

Position: Independent Director

Qualifications: Southwestern Massachusetts University (B.S Mechanical Engineering)

University of Massachusetts (Honorary Doctorate of Business)

The executive committee of the Aerospace Industries Association

Member of the board of the Connecticut Science Center

Skills: Deep aerospace knowledge and experience in program execution, systems integration, long cycle investments, and customer value creation.

Teri P. McClure

Background:

A native of Kansas City, Kansas, she began her legal career in private practice, focusing on labor-and employment-related civil litigation. Before joining UPS, she practiced with the Troutman Sanders firm in Atlanta.Teri Plummer McClure served as General Counsel, Chief Human Resources, and Vice President Labor Relations and Communications for UPS’s more than 444,000 employees worldwide. Teri was also a member of the company’s Management Committee, responsible for setting strategy, profit and operating plans for the company’s worldwide operations.

Position: Director

Qualifications: Washington University in St.Louis(BSBA Economics and Marketing)

Emory University School of Law(Doctor of Law)

Skills: Corporate Law, Contract Negotiation, Corporate Governance

Emory Law Distinguished Alumni Award

Scales of Justice Award

Washington University Olin School of Business Distinguished Alumni Award

Nik Mittal

Background:

After a first career in the equity markets, three years ago he made the decision to make my second career in environmental markets, policy, and business development. Fan of all things decoupling growth and well-being from degradation.

Position: Independent Board Director, Member of the Audit Committee & Observer on ESG Subcommittee

Qualifications:

The University of North Carolina at Chapel Hill (B.A Economics)

New York University Stern School of Business (M.B.A)

New York University School of Law (J.D)

Certification in Sustainable Finance at Columbia University with a focus in renewables and environmental markets

Sarah Robb O’Hagan

Background:

Sarah is a high-energy combination of disruptive business leader, fitness fanatic, and cheerleading mom, having been named among Fast Company’s “Most Creative People in Business” and Forbes “Most Powerful Women in Sports”. She led the reinvention and turnaround of Gatorade as its global president, the digital transformation of Equinox Fitness Clubs as its President and the transformation of Flywheel Sports to a streaming content business as its CEO. She has held leadership positions at Nike and Virgin and is the author and founder of ExtremeYOU, a book and content platform to unleash potential. Sarah is currently the CEO of EXOS, the human performance company – and she is a sought-after expert on business innovation, and inspiring human performance.

Position: Director

Qualifications: The University of Auckland (Bcom Marketing and International Business)

Skills: Brand Management, Marketing Strategy, Integrated Marketing

Vivek Sharma

Background:

Vivek Sharma is an Indian-American business executive, who has extensive experience building and growing profitable businesses through the application of technology, having served as CEO & Co-Founder, senior tech executive, Fortune 500 board member, data science professor, and author.

Position: Director

Qualifications: Indian Institute of Technology, Delhi(B.Tech)

The Business School for the World – Europe(MBA)

Certification: 

Competing on Business Analytics & Big Data-Harvard Business School

Finance for Senior Executives-Harvard Business School

Skills: CEO, Board of Directors, Angel Investing

Thomas Winkelmann

Background:

Thomas Winkelmann is a German businessman and was the CEO of the former German airline Air Berlin until it ceased operations in October 2017. He was born in Hagen in North Rhine-Westphalia (Nordrhein-Westfalen). He joined Lufthansa in 1998. He was the head of the company for Latin America and the Caribbean, based in Miami. He became Vice-President of Lufthansa for North and South America, based in New York in September 2000. He became Chief Executive of Germanwings in September 2006, when it was owned by Eurowings, which was then headquartered in Dortmund. Germanwings was effectively bought by Lufthansa at the end of 2009.

Position: Director

Qualifications: The Free University of Berlin (Freie Universität Berlin). Linguistics and Classics

The University of Münster (Westfälische Wilhelms-Universität).Linguistics and Classics

Harvard Business School (AMP)

Skills: Aviation, Airlines, Commercial Aviation

Robin Hayes

Background: 

Robin Hayes is an American politician and businessman from North Carolina.

Position: CEO

Qualifications: Graduate from Duke University

The Republican nominee for governor in 1996

A member of the Republican Party, he represented North Carolina’s 8th congressional district in the House of Representatives from 1999 to 2009

Chairman of the North Carolina Republican Party from 2011 to 2013, and from 2016 to 2019

Insider shares: 0.3709%

Joanna Geraghty

Background: 

Joanna joined JetBlue in 2005, first as the airline’s vice president and associate general counsel and director of Litigation and Regulatory Affairs, and the executive vice president chief people officer from 2010 to 2014. Previously, she served as a partner at law firm Holland & Knight.

Position: President & COO

Qualifications:

College of Holy Cross (B.A Sociology)

Syracuse University-Maxwell School (M.A International Relations)

Syracuse University College of Law (JD Law)

Skills: Aviation,Airlines, Program management

Insider shares:0.1417%

Ursula Hurley

Background:

Previously the Head of Treasury and Investor Relations at JetBlue Airways

Position: CFO

Qualifications: Fairfield University (B.A)

Columbia University in the city of New York(M.B.A)

Skills: Aviation, Airlines, Aircraft, accounting, financial planning and analysis, investor relations, and treasury

Personal Quality: Results driven, experienced and passionate

Insider shares: 0.0076%

Ed Baklor

Background:

Prior to joining JetBlue, he was chief commercial officer for the LaGuardia Gateway Partners where he focused on transforming the commercial and guest experience at LaGuardia Airport’s Central Terminal B. He also led guest experience at WestJet, Canada’s award-winning international airline. Ed spent 14 years with The Walt Disney Company in various executive roles and launched Disney’s group guided family vacations, Adventures by Disney.

Position: Head of Customer Care and Programs

Qualifications:  The American University(B.S Finance)

Personal Quality: Ed’s career has been shaped by a lifelong passion for service excellence and hospitality.

Insider shares: 0

Andres Barry

Background:

Prior to joining JetBlue Travel Products in 2018, Andres was a partner and managing director at The Boston Consulting Group (BCG), a global management strategy consulting firm. During his time at BCG, he primarily worked in the travel and tourism sector, focusing on commercial growth and digital innovation for leading brands in the U.S. and abroad. Prior to BCG, he held several sales and operations management roles.

Position: President, JetBlue Travel Products

Qualifications: Northwestern University(B.S)

Emory University(M.B.A)

Skills: Business Strategy, Management Consulting

Insider shares: 0

Alex Battaglia

Background:

Alex began his aviation career at Delta Air Lines and has an extensive background in a variety of leadership roles both at JetBlue and Delta running large domestic and international operations. He oversees the execution of the airline’s day-to-day operations spanning 100+ cities in the U.S., Caribbean, Latin America, and U.K. He oversees airport operations, system operations, dispatch, air traffic management, crew services, and emergency response as well as JetBlue’s business continuity efforts. Alex previously served as JetBlue’s vice president of airports and its head of system operations.

Position: Head of Airports and System Operations

Qualifications: His educational background includes studies at the University of Hawaii and William Paterson University where he majored in business management.

Insider shares: 0

Amy Burr

Background: 

Amy has been a leader in creating, sourcing, and implementing innovative technology, products, and programs in the travel space for more than two decades. She caught the startup bug from joining Virgin America in 2004 as one of the original founders of the company. Amy worked in various roles over her 14-year tenure at the airline in areas of strategy, corporate program leadership, commercial and revenue development, as well as technical areas including e-commerce, reservations systems, and guest products. She ended her time with the company as the Virgin America leader of the merger integration with Alaska Airlines. Amy landed at Virgin America after working at Continental Airlines in revenue management and corporate development.

Position: President, JetBlue Technology Ventures

Qualifications: American University(B.S Applied health sciences)

The Moore School of Business at the University of South Carolina (M.B.A)

Insider shares: 0

Warren Christie

Background:

His aviation career spans over 30 years. In 1988 he was commissioned as an Officer in the United States Navy where he piloting the F/A-18 Hornet. He served as a Naval Aviator and instructed at the Navy Fighter Weapons School (TOPGUN) where he led staff and student training and was responsible for the design of the graduate level strike-fighter tactics training curriculum. Warren joined JetBlue in 2003 and has served in various positions including senior vice president, regulatory and training; vice president, operations planning and training; and vice president, JetBlue University.

Position: Head of Safety, Security, & Fleet Operations

Qualifications: The University of Notre Dame(BBA, Accounting)

Skills: Safety, security, fleet operations, security initiatives, flight, and technical operations (maintenance).

Insider shares: 0

Dave Clark

Background:

Dave was named head of revenue and planning in January 2022. Since joining JetBlue in May 2009, he has led teams across JetBlue’s commercial organization. From February 2017 to December 2021 he served as vice president, of sales and revenue management, where he was responsible for revenue optimization, ancillary strategy, distribution, and corporate sales. He has also served as vice president, of network planning, and has been a key architect of the airline’s successful network strategy. Before his promotion to vice president in 2014, he led both the route planning and schedule planning teams. Prior to joining JetBlue, Dave was a project leader in the Boston Consulting Group’s Travel & Tourism practice.

Position: Head of Revenue and Planning

Qualifications:  The University of Virginia(B.S and M.S System Engineering)

Harvard Business School (M.B.A)

Skills: Network strategy, operational planning and analysis, and sales and revenue management.

Insider shares: 0.0056%

Carol Clements

Background:

Prior to JetBlue, Carol served as chief technology officer for Pizza Hut, responsible for enabling growth for Pizza Hut’s U.S. restaurants through technology and digital innovation. She oversaw the brand’s e-commerce channels, restaurant & delivery technology, and data & analytics initiatives to power sales and operations across 6,000+ restaurants nationwide. Carol also spent 11 years at Southwest Airlines in a variety of leadership roles. During her time there, she oversaw technology initiatives supporting Southwest’s first-ever expansion to international markets, the launch of the All-New Rapid Rewards loyalty program, and the modernization of Southwest’s e-commerce channels.

Position: Chief Digital and Technology Officer

Qualifications:  Southern Methodist University in Dallas (mathematics and management science engineering)

Skills: She oversees strategy, vision, and implementation of technology solutions that align with the airline’s business model to offer digital innovation, consistent service and maximize investment.

Insider shares: 0.0038%

Edward Kayton

Background:

For more than 20 years, Edward has shaped effectively people and talent acquisition and management strategies to support long-term business objectives in a number of industries, including aviation, specialty retail, and technology. He most recently served as the vice president, of human resources at Spirit Airlines. Previously, he served as vice president, of human resources for LexisNexis Risk Solutions. Edward brings expertise across the HR capability spectrum, including oversights of learning and development, HR technology, workforce analytics, engagement and culture, corporate social responsibility, diversity and inclusion, and employee relations.

Position: Head of Talent and Crew Member Experience

Qualifications: 

Skills: Talent acquisition, talent management, organizational effectiveness, people data insights, crew relations, and values relations teams

Insider shares: 0

Robert Land

Background:

Prior to JetBlue, Rob worked in the Office of the Secretary of Transportation on aviation policy; as Chief of Staff at the Federal Railroad Administration; and on the White House staff for Vice President Gore. Before his government service career, Rob worked as an attorney at the firm of Proskauer Rose. In addition, Rob served as Legislative Consultant to President Clinton’s blue ribbon panel, The National Commission to Ensure a Strong Competitive Airline Industry.

Position: Head of Government Affairs, Associate General Counsel

Qualifications: Skidmore College(Bachelor degree)

The Washington College of Law at American University(J.D Law)

Member of the Bar of New York, the District of Columbia

Member of the Supreme Court of the United States

Skills: The company’s relations with the executive and legislative branches of the U.S. government as well as state and local governing bodies and international government relations, aircraft delivery team, airport affairs, and primary legal responsibility for regulatory matters.

Insider shares: 0

Tracy Lawlor

Background:

Lawlor joined JetBlue in 2001 as a senior financial analyst and has held a number of finance leadership roles, culminating as vice president, of financial planning, and analysis. She is also the chair of the board of JSX, an innovative, independent regional airline based in Dallas. Prior to joining JetBlue, Lawlor worked in the corporate offices of The TJX Companies, Inc., parent of T.J. Maxx, Marshalls, and HomeGoods.

Position: Chief Strategy and Business Development Officer

Qualifications: Boston College(Bachelor Degree)

Skills: Enterprise strategy, business planning, brand building, financial planning, and analysis.

Insider shares: 0

Doug McGraw

Background:

Doug joined JetBlue in 2014 as director, of corporate communications, leading media relations and external communications, and in 2016, he assumed responsibility for the airline’s frontline crewmember operational communications. In 2018, he was promoted to vice president, of corporate communications. Prior to JetBlue, Doug spent 15 years at FleishmanHillard, where he most recently served as senior vice president and partner in the New York office counseling a range of clients and sectors.

Position: Chief Communications Officer

Qualifications:  St. Louis University (B.A communications)

Skills: Communications strategy, crewmember communications, media relations, reputation management, leader engagement, and business communications.

Insider shares: 0

Brandon Nelson

Background:

Nelson joined JetBlue in 2005 and has held a number of leadership roles within the legal team. His diverse experience includes leading a team of transactional lawyers who represent the company in commercial, marketing, real estate, business development, intellectual property, and technology matters. He also serves on the investment committee of the company’s wholly-owned corporate venture capital arm, JetBlue Technology Ventures. Prior to JetBlue, Brandon practiced corporate and business litigation law at firms in California and New York, most recently at Shearman & Sterling.

Position: General Counsel and Corporate Secretary

Qualifications: Howard University(Bachelor of Business)

New York University School of Law(J.D)

Skills: Legal, compliance, ESG and sustainability, and cybersecurity

Insider shares: 0

Jayne O’Brien

Background:

O’Brien joined JetBlue in 2020 bringing a wealth of global travel and marketing experience to the airline. She previously served as senior vice president of global brands at Intercontinental Hotel Group; managing director, USA for Scenic – Luxury Cruises & Tours; and chief marketing officer for Dubai Properties Group, part of Dubai Holding. Her professional background also includes extensive airline industry experience from her 18-year career with British Airways in a number of operations and marketing leadership positions in the Americas and Europe, culminating in the role of Head of Global Brand & UK Marketing.

Position: Head of Marketing and Loyalty

Qualifications: The University of London

Skills: Brand, marketing and advertising, e-commerce

Insider shares: 0

Lisa Reifer

Background:

Lisa was named head of finance and treasury in January 2022. Since joining JetBlue in February 2004, she has led teams across JetBlue’s organization. From May 2017 to January 2022, she served as vice president, of infrastructure, properties & development, where she was responsible for managing all of the company’s real estate assets including long-term airport planning and development, design and construction, and facilities planning across 100+ cities. She has also served as director, of corporate real estate counsel; director, of airport affairs; director, of investor relations; and director, of commercial development and strategy. Prior to joining JetBlue, Lisa was an associate at the law firm Shearman & Sterling.

Position: Head of Finance and Treasury

Qualifications: Dartmouth College(Bachelor Degree)

The Wharton School of the University of Pennsylvania(M.B.A)

Vanderbilt University(J.D)

Skills: Financial strategy, leading infrastructure properties and development, investor relations, treasury, and risk management, including fuel hedging and insurance.

Insider shares: 0

Laurie Villa

Background:

Prior to joining JetBlue in 2021, Laurie served as senior vice president and chief human resources officer of Spirit Airlines where she leveraged data and analytics to improve the employee and guest experience, strengthen culture and engagement, and grow their talent pipeline. Laurie also focused heavily on targeted investments in internal talent and strengthening diversity, equity, and inclusion within the airline and served as president of the Spirit Airlines Charitable Foundation. With more than 20 years of leadership experience, Villa has shaped effective people and talent strategies to support long-term business objectives in a number of industries, including consumer goods, specialty retail, education, and technology.

Position: Chief People Officer

Qualifications: The University of North Florida (Both a bachelor’s and master’s in business administration)

Skills: Compensation and benefits; diversity, equity, and inclusion; crew relations; values and labor relations; and recruiting and talent management.

Insider shares: 0

JetBlue was incorporated in Delaware in August 1998, commenced service on February 11, 2000, and ranked as the sixth largest airline in the U.S. in 2021. JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San Juan.

Target audiences:

Customers who want to travel by air across the U.S., Caribbean, and Latin America, and between New York and London.

Competitive Advantage:

-Competitive cost structure

Low-cost Jetblue

Low fare for the passengers

-High-value geographies

Serve customers to over 100 destinations

-Award-winning service

Throughout the entire customer experience, from booking an itinerary to arrival at the final destination

Received the Highest Customer Satisfaction

-Differentiated product and culture

“Bring humanity back to air travel”

New and efficient aircraft

Innovative Spirit

Sustainability and Climate Leadership

Two subsidiaries – JetBlue Travel Products and JetBlue Technology Ventures

Core values: Safety, caring, integrity, passion, and fun.

-Too few international destinations (not worldwide enough)

Destinations mainly located within the U.S

Possible solution:

Expand into new and existing markets

-High-level debts

4.63 B

Debt/Equity= 134.05

Current Ratio:0.74

-Earning correlated with fuel price

Fuel price is a huge part of the cost

A rise in fuel price would reduce earnings

Especially when the fuel price increased in recent months

The Goodwill of Jetblue:

284M (From Jetblue’s 2021 Annual Report)

Asia

-AirAsia

AirAsia X Berhad (AirAsia X) is a leading long-haul, low-cost airline operating primarily in the Asia-Pacific region. As of 15 July 2020, AirAsia X serves 26 destinations across Asia (Singapore, Bali, Sapporo, Tokyo, Osaka, Nagoya, Fukuoka, Seoul, Busan, Jeju, Taipei, Xi’an, Beijing, Hangzhou, Chengdu, Shanghai, Chongqing, Changsha, Wuhan, New Delhi, and Amritsar), Australia (Sydney, Melbourne – Avalon and Perth), the Middle East (Jeddah) as well as the United States of America (Hawaii-Honolulu) and operates out of two hubs: Kuala Lumpur and Bangkok.

As of 31 December 2019, they have a core fleet of 39 Airbus A330 aircraft including 15 in their affiliates – 13 in AirAsia X Thailand and two in AirAsia X Indonesia. Based on their breakthrough business model, they believe they have the lowest unit cost base of any long-haul airline in the world, with cost per available seat kilometer (CASK) of US¢3.04 and CASK (excluding fuel) of US¢1.88 for the year ended 2019.

This enables them to offer fares that are targeted, on average, to be 30% to 50% lower than full-service carriers and to stimulate new market demand. On top of that, AirAsia X offers a Quiet Zone cabin on all flights across our network. The service enhancement is exclusively for guests above the age of 12. The Quiet Zone features soft lighting and a more relaxed cabin atmosphere, which help to ensure a more pleasant journey.

-Scoot Airlines

Scoot Pte Ltd, operating as Scoot, is a Singaporean low-cost airline and a wholly owned subsidiary of Singapore Airlines. It began its operations on 4 June 2012 on medium and long-haul routes from Singapore, predominantly to various airports throughout the Asia-Pacific.

Scoot’s airline slogan is Escape the Ordinary. Initially, Scoot’s fleet consisted of Boeing 777 aircraft that were obtained from its parent Singapore Airlines. Subsequently, the airline began to transition its long-haul fleet to the Boeing 787 Dreamliner aircraft in 2015. Scoot uses the Airbus A320 and the Airbus A320neo family for its short-haul flights. On 25 July 2017, Tigerair, another low-cost Singaporean airline, was officially merged into Scoot using Tigerair’s air operator’s certificate (AOC) to consolidate the low-cost airline business.

With the change of AOC, the airline’s IATA code was changed from TZ to TR, and its ICAO code was changed from SCO to TGW, previously used by Tigerair. However, the ‘Scoot’ brand, along with the ‘Scooter’ callsign, are retained. Its head office is at Changi Airport.

-IndiGo Airlines

IndiGo primarily operates in India’s domestic air travel market as a low-cost carrier with a focus on its three pillars – offering low fares, being on time, and delivering a courteous and hassle-free experience. IndiGo has become synonymous with being on time. Since its inception in August 2006, they have grown from a carrier with one plane to a fleet of 279 aircraft today.

A uniform fleet for each type of operation, high operational reliability, and award-winning service make them one of the most reliable airlines in the world. IndiGo has a total destination count of 97 with 74 domestic destinations and 25 International.IndiGo is not only the most efficient low-fare operator domestically but is also comparable with global low-cost airlines.

They are constantly enhancing our engagement with passengers to augment their travel experience. From multichannel direct sales to online flight status checking, an exclusive IndiGo app for Android, they have transformed air travel in India. Today, they are India’s most preferred airline. At IndiGo, low fares come with high quality.

Europe

-Vueling Airlines

Vueling is one of Europe’s leading low-cost airlines, with special relevance in the Spanish domestic market, as well as in France and Italy. In terms of managing the crisis, they focused on four key priorities.

First, their main objective has been to protect the health and well-being of their employees and customers. Second, they enhanced flexibility to enable them to constantly adapt our capacity to match demand, identifying any new opportunities to fly, which generated cash.

Third, they had to rigorously adapt their costs as much as possible to meet the level of flight activity. Finally, they had a constant focus on cash, working capital, and financing.

-EasyJet

EasyJet is a low-cost European point-to-point airline. They use their cost advantage, operational efficiency, and leading positions in primary airports to deliver low fares, seamlessly connecting Europe with the warmest welcome in the sky. EasyJet is one of the largest airlines in the world, with 308 aircraft, operating 927 routes across 34 countries and 153 airports.

EasyJet holidays was launched in 2019 in order to offer holiday packages that encourage 84% of customers traveling on leisure to spend more with them, rather than book accommodation elsewhere. EasyJet focuses on developing strong positions in Europe’s leading airports – flying between airports people want to travel to with optimized frequency. Its principal competitors at these leading airports are legacy airlines and charter carriers.

EasyJet’s structural cost advantage relative to these airlines allows it to offer customers more affordable fares. EasyJet is confident that its strategy of building on its competitive advantages – an unparalleled network and market positions, an efficient low-cost model, and a well-known brand.

-Ryanair

Ryanair is an Irish ultra-low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland, and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family of airlines and has Ryanair UK, Buzz, Lauda Europe, and Malta Air as sister airlines.

Ryanair Group operates more than 400 Boeing 737-800 aircraft, with a single 737-700 used as a charter aircraft, as a backup, and for pilot training. The airline has been characterized by its rapid expansion, a result of the deregulation of the aviation industry in Europe in 1997, and the success of its low-cost business model. Ryanair’s route network serves 40 countries in Europe, North Africa (Morocco), and the Middle East (Israel, Jordan, and Turkey).

The company has at times been criticized for poor working conditions, heavy use of extra charges, bad customer service, and a tendency to intentionally generate controversy in order to gain free publicity.

US

-American Airlines

American Airlines Group Inc. was formed on December 9, 2013, with the closing of the merger between American Airlines and US Airways Group. American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. America is a founding member of the oneworld® alliance, whose members serve more than 1,000 destinations with about 14,250 daily flights to over 150 countries.

-Southwest Airlines

Southwest Airlines operates one of the world’s most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 121 airports across 11 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline.

-Robust Route Network

-Compelling Brand Appeal

-Superior Financial Position

-Delta

More than 4,000 Delta Air Lines flights take off every day, connecting people across more than 275 destinations on six continents with a commitment to industry-leading customer service, safety, and innovation. As the leading global airline, Delta’s mission is to create opportunities, foster understanding and expand horizons by connecting people and communities to each other and their potential.

Delta is working toward more sustainable aviation by leveraging existing solutions and technologies, investing in the future of sustainable aviation fuel and actively engaging with next-generation solutions. They lead the way in delivering a world-class customer experience, and we’re continuing to ensure the future of travel is personalized, enjoyable, and stress-free. Delta has served as many as 200 million customers annually.

Headquartered in Atlanta, Delta operates significant hubs and key markets in Amsterdam, Atlanta, Boston, Detroit, London Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Seattle, Seoul-Incheon, and Tokyo. Powered by innovative and strategic partnerships with Aeromexico, Air France-KLM, China Eastern, Korean Air, Virgin Atlantic, and planned joint ventures with LATAM* and WestJet*, Delta brings more choice and competition to customers worldwide. Even more importantly, Delta people are making a difference in their communities by devoting their time and talents to a wide array of Delta’s nonprofit and charitable partners.

Source from market share

Main Risk Factors

• COVID-19 Pandemic Risks:
  • The significant decline in demand related to COVID-19 caused a material deterioration in revenues.
  • Their indebtedness has increased and may continue to increase under the influence of the pandemic.
  • The pace and timing of their growth have been negatively impacted by the COVID-19 pandemic.
  • There has been a significant effect on the market price of their securities generally due to the pandemic.
  • Their strategic operating plans have been materially disrupted by the pandemic.
• Competitive Risks:
  • The industry is extremely competitive.
  • They may be subject to competitive risks due to the long-term nature of their fleet order book.
• Operational Risks
  • Their business is highly dependent on the availability of fuel and fuel is subject to price volatility.
  • Their maintenance costs will increase as their fleet ages.
  • Their salaries, wages, and benefits costs will increase as their workforce ages.
  • The risks of doing business internationally, or in a particular country or region, could lower revenues, increase costs, reduce profits, or disrupt their business.
  • The competition/congestion/a reduction in demand in the New York metropolitan market would harm their business due to their dependency on the market.
  • Their business may be impacted by increases in airport expenses, seasonality factors, and tariffs.
  • They are subject to the risks of having a limited number of suppliers.
  • The Northeast Alliance with American Airlines is subject to challenge.
• Data and Information Security-Related Risks
  • The reputation and business may be harmed, and they may be subject to legal claims if there are breaches of their information security.
  • Data security compliance requirements could increase their costs.
  • The failure of automated systems could harm their business.
  • Human Capital-Related Risks
  • The business could be harmed if they are unable to attract and retain qualified personnel or maintain their company culture.
  • They may be subject to unionization, work stoppages, slowdowns, or increased labor costs.
• Reputation Risks
  • Their reputation and financial results could be harmed in case of accidents.
  • Their business depends on their strong reputation and the value of the JetBlue brand.
• Financing and Financial Risks
  • They have a significant amount of fixed obligations and will incur more fixed obligations, which could harm their ability to satisfy the obligations.
  • They may seek material amounts of additional financial liquidity in the short term, and insufficient liquidity may have a material adverse effect on their financial condition and business.
  • Their level of indebtedness may limit our ability to incur additional debt to meet future financing needs.
  • Their liquidity could be adversely impacted in the event their credit card processors were to impose material reserve requirements for payments.
  • They are subject to certain restrictions on their business due to their participation in governmental programs under the Acts.
  • They may never realize the full value of our intangible assets or our long-lived assets, and impairments may negatively affect their financial condition and operating results.
• Airline Industry Risks
  • They could be adversely affected by an outbreak of a disease or an environmental disaster that significantly affects travel behavior.
  • Compliance with future environmental regulations may harm their business. They may be affected by global climate change or by legal, regulatory or market responses to such change.
  • Federal budget constraints or federally imposed furloughs due to budget negotiation deadlocks may adversely affect their business.
  • Changes in government regulations imposing additional requirements and  restrictions could increase their operating costs and cause service delays and disruptions.
  • A future act of terrorism, the threat of such acts or escalation of U.S. military involvement overseas could adversely affect their industry.
  • The airline industry is particularly sensitive to changes in economic conditions.
  • The recent implementation of 5G wireless technology near the airports could have an adverse effect on their continued safe operations.

Source from market share

• As shown in the timeline above, the main risks since 2007 are competitive risks, operational risks, data and information security risks, human capital risks, reputation risks, financing and financial risks, and airline industry risks.
• Since 2020, the COVID-19 Pandemic risk has become the key risk, and the drastic decline in the passenger number has had a catastrophic impact on the industry, as well as posing a great threat to JetBlue.
• In the 10-Q filing in August 2022, the risk of the merger with Spirit is also disclosed, which is also a key risk in 2022.

COVID-19 Risk Impact on the Business Performance

Source from yahoo finance

• The U.S. airline’s passenger number reflects the prosperity of the aviation industry. As shown in the chart above, it is positively correlated with net income and equity.
• A drastic decline in passenger numbers has been seen since the start of the COVID-19 Pandemic, and the net income and equity are negatively impacted by the passenger numbers.

In the past three years, Jetblue had a net income of 569 million in 2019 but suffered a huge loss of up to 1354 million in 2020, and the situation improved in 2021, with a loss of 182 million.

Nonetheless, Jetblue’s cash flow remains stable. The funds are mainly from Changes in certain operating assets and liabilities and Financing activities.

Since most of the cash in JetBlue’s hands is for preparation for the merger, the actual cash required for the company’s operation should still refer to the data before 2019. This figure may be lower due to the disruption to JetBlue’s operations during Covid-19.

Source from yahoo finance

JetBlue’s Debt/Equity Ratio peaked in 2007-2008 and has declined since then. The debt/Equity Ratio began to rise again in 2019.

Source from yahoo finance

The debt/Equity Ratio could explain JetBlue’s steady source of cash flow despite operating losses.

Although JetBlue’s Debt/Equity Ratio is on the rise after 2019, compared with the historical data, it is still at the level of a historical average. Therefore, JetBlue’s asset risk has increased compared to before 2019, but it has not reached a very high level.

Stock Price Since IPO

On April 11, 2002, JetBlue Airways Corporation (Nasdaq NMS: JBLU) announced its initial public offering of 5,866,667 shares of its common stock at a price of $27 per share. All of the shares are being offered by JetBlue. The common stock will trade on the Nasdaq National Market(R) under the symbol “JBLU.”

Source from market share

Observing the stock price trend since the IPO, we noticed the following:

• JBLU stock price showed a spike in Q4 2003 and dropped till Q3 2006 due to a surge in fuel price and lack of fuel hedges.
• The stock price rebounded slightly in Jan 2007
• The stock price started decreasing and continued decreasing till 2008 and remained low till 2013. The initial drop resulted from the crisis on Valentine’s Day of 2007 which JetBlue’s operations collapsed after an ice storm hit the East Coast of the U.S., leading to 1,000 canceled flights in just five days. The lasting downtime was a result of the 2008 financial crisis aftermath.
• The stock price spiked again in Q3 2013 and reached the second all-time high in Oct 2015 of $27.02. The reason could be that the Company finally made the transition from a richly valued growth company to (potentially) cheap value stock. With the company establishing strong market positions in New York, Boston, and San Juan, and keeping costs in check, its stock finally was ready for takeoff.
• The stock price then dropped to $15.15 in Q2 2016 and fluctuate around $20 between 2016 and 2019
• The stock price significantly plumped in Q1 2020 to $6.86 following the COVID-19 outbreak & lockdowns
• The stock price climbed up to $21.64 in Q1 2021  because of the ongoing vaccination drive and gradual re-openings driving an improvement in demand and buoying market sentiment
• The stock price has been decreasing since then as the result of labor shortage and record jet fuel prices

Moving Average smooths out price data by creating a constantly updated average price. It is a widely used technical indicator that smooths out price trends by filtering out the noise from random short-term price fluctuations. The most common applications of moving averages are to identify trend direction and to determine support and resistance levels. Generally, if the price is above a moving average, the trend is up. If the price is below a moving average, the trend is down.

Common MA lengths are 10, 20, 60, 100, 200. For the look-back period for this project, we chose 60 and 200 for both a short-term and long-term view. An MA with a short time frame will react much quicker to price changes than an MA with a long look-back period.

Two analyses were done to analyze the stock trend: Price Crossover and Golden/Death Crossover.

Price Crossover – when the price crosses above or below a moving average to signal a potential change in trend.

• Compare to 60 MA: shows a downward trend, the MA acts as resistance like a ceiling, the price hits the level and then starts to drop again; one small crossover on Feb 22.

• Compare to 200 MA: big crossover in Oct 2020 and Jul 2021, no signal for trend change since then.

Source from market share

• Goldern/Death Cross – compare two MAs one shorter and one longer; shorter one cross above the longer one is a buy signal, as indicates that the trend is shifting up; when the shorter-term MA crosses below the longer-term MA, it’s a sell signal, as it indicates that the trend is shifting down
  • Oct 2020: 60 day MA cross above 200 MA indicates a uplifting trend
  • Aug 2021 and March 2022: 60 day MA cross down 200 MA indicates a downward trend

Source from market share

The PE ratio is calculated as the share price divided by the earnings per price, i.e. the market value of a stock compared to the company’s earnings. The P/E ratio shows what the market is willing to pay today for a stock based on its past or future earnings. Observing the PE ratio trend of JetBlue, we noticed:

• Between 2012 – 2017, the PE ratio remained around 10
• PE ratio increased to 26.3 in 2018 and decreased since then
• For the recent 3 fiscal years, the PE ratio dropped from 9.7 to -2.9 to -25. This indicates the Company has experienced negative earnings, therefore it is worth closely watching its financial performance for the following years

Source from market share

To understand the stock performance of JetBlue in comparison to the market, we compared it with two stock indexes.

First, the Standard and Poor’s 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on exchanges in the United States, providing a trend of the overall market. Focusing on the recent 3 fiscal years (2019-2021), we noticed JetBlue has been underperforming compared to the overall market while showing some volatility.

Source from market share

Second, the NYSE Arca Airline Index, i.e. XAL, is a modified equal-dollar weighted index designed to measure the performance of highly capitalized and liquid international airline companies. The Index tracks the price performance of selected local market stocks or ADRs of major U.S. and overseas airlines. In the recent three fiscal years, we noticed JetBlue followed the general trend of the overall airline industry, yet underperformed.

Source from market share

To see how JetBlue performed versus its main competitors, we compared their stock performances in terms of annual total return. Observing the charts, we noticed JetBlue had a total return of -46.42% on September 20, 2022, and had been underperforming in the recent 3 fiscal years compared to both full-service airlines including Delta Airlines, United Airlines, and American Airlines, and low-fare airlines such as Spirit Airline, Southwest Airline, and Frontier Airline.

Comparison with Full Service Airlines

Comparison with Low Fare Airlines

Source from market share

Target customers for the Company

Who are the Target Customers of the company?

Affordability:

The company targets middle-class customers, who are neither high-traffic business travelers nor ultra-price-sensitive travelers. They focus on the majority of travelers who have been underserved by other airlines, and they offer a differentiated product and award-winning customer service.

Regions:

They are a predominately point-to-point system carrier, with the majority of our routes touching at least one of our six focus cities: New York, Boston, Fort Lauderdale-Hollywood, Orlando, Los Angeles, and San Juan, Puerto Rico.

Largely enabled by the Northeast Alliance (the “NEA”) with American Airlines Group Inc. (“American”), they announced nine new BlueCities and 32 new routes in 2021. As of December 31, 2021, their network served 107 BlueCities in 31 states, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, 24 countries in the Caribbean and Latin America, and England, our first country in Europe.

How do they acquire targeted customers:

Differentiated Product:

Customers can purchase one of five branded fares: Blue Basic, Blue, Blue Plus, Blue Extra, and Mint®, their premium service. Each fare includes different offerings such as priority boarding, advance seat selections, free checked bags, reduced change fees, and additional TrueBlue® points, with all fares including the core offering of free inflight entertainment, free brand name snacks, and free non-alcoholic beverages. Customers can choose to “buy up” to an option with additional offerings. These different fares allow customers to select the products or services they need or value when they travel, without having to pay for the things they do not need or value.

Airline Commercial Partnerships:

Airlines frequently participate in commercial partnerships with other carriers in order to increase customer convenience by providing interline connectivity, codeshare, complementary flight schedules, frequent flyer program reciprocity, and other joint marketing activities. As of December 31, 2021, they had 47 airline commercial partnerships.

In July 2020, they announced the intention to enter into a strategic relationship with American Airlines Group Inc. (“American”). Once fully implemented, this arrangement, known as the Northeast Alliance (the “NEA”), includes an alliance agreement with reciprocal code sharing on domestic and international routes to, from or connecting through New York (John F. Kennedy International Airport (JFK), LaGuardia Airport, and Newark Liberty International Airport) and Boston, excluding JetBlue’s European transatlantic flying.

What type of marketing does the company do to increase their brand recognition:

Advertising:

They market the services through advertising and promotions in various media forms including popular social media outlets. The company engages in large multi-market programs, local events, and sponsorships across its route network as well as mobile marketing programs.

Advertising costs, which are included in sales and marketing, are expensed as incurred. Advertising expense was $45 million in 2021, $45 million in 2020, and $66 million in 2019. Despite the impact of the pandemic, the advertising expense remained high to maintain brand recognition.

Distribution:

The primary and preferred distribution channel to customers is through their website, www.jetblue.com, their lowest-cost channel. Their website allows the company to more closely control and deliver the JetBlue Experience while also offering the full suite of JetBlue Fare Options, Even More® Space and Speed, and other ancillary services.

Their participation in global distribution systems, or GDS, supports their profitable growth, particularly in the business market. They find business customers are more likely to book through a travel agency or a booking product that relies on a GDS platform. The company currently participates in several major GDS and online travel agents, or OTA.

Market share:

The company has a 4.34% of market share in 2022 Q2. After the upcoming merger, the market share will rise to 6.77%. As a result, the transaction will create a significant challenger to the ‘Big Four,’ which accounts for about 80% of the market share.

Source from market share

Company Rankings from Industry Organizations

Annual North America Airline Satisfaction Study in 2022 from J.D. Power:

Source from market share

The J.D. Power published The Best Airlines In America in 2022 Report. As shown in the chart above, the company ranked 1st in the First/Business Class and Premium Economy, and they also ranked 2nd in the Economy/Basic Economy. The company offers differentiated products and services, satisfying all kinds of customers’ needs.

Strengths:

• Relatively lower costs
• Differentiated product and services
• High-value geography

Weaknesses:

• Small size with fewer flights and aircraft
• Higher leverage compared to the industry average
• High-dependency on operating

Opportunities:

• Merger with Spirit
• Expansion with new airlines and aircraft

Threats:

• Future risks with the merger
• Fierce competition in the industry
• Revenues subject to the economy and the pandemic

Assets:

The JetBlue balance sheet for the past five years has been extracted as follows. Due to the length, it’s divided into two parts: assets and liabilities. The annual change was calculated for each item and listed on the left side, and the ones that had a volatile change (>=30%) has been marked red.

Source from jetblue.com

From the annual changes, we can see a drastic increase of cash and cash-related items from 2019 to 2020 due to the disruption of Covid-19 and the postponement of regular operations, which can also explain the decrease in the account receivables and assets total growth. As the covid restriction has been lifted, the operation was returning gradually. Therefore, we can see a decrease in cash on hand and an increase in accounts receivable-related items.

Liabilities:

The JetBlue balance sheet Liabilities part is listed as follows. The annual change was calculated for each item and listed on the left side, and the ones that had a volatile change (>=30%) has been marked red.

Source from jetblue.com

From the annual changes, we can see a drastic increase of long-term debt and capitalized leases from 2019 to 2020 due to the disruption of Covid-19 and the postponement of regular operations. Since the airline industry, in general, has a huge amount of fixed costs and expenses, JetBlue has to rely on heavy debt to survive the critical period. As the covid restriction has been lifted, the operation was returning gradually. Therefore, we can see a decrease of debt and deferred tax benefits. Another remarkable element is the current liabilities increase, which is caused directly by the merger planning.

JetBlue is announcing a horizontal merger with Spirit Airlines. According to the announcement, JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders’ approval of the transaction and a ticking fee of $0.10 per month starting in January 2023 through closing, for an aggregate fully diluted equity value of $3.8 billion and an adjusted enterprise value of $7.6 billion.

Spirit Airlines had a plan to merge with Frontier Airlines in the past. The JetBlue airline has urged Spirit Airlines to turn down the deal, and now Spirit Airlines is opening the door for JetBlue’s offer

Spirit said it had agreed to be acquired by JetBlue Airway with the deal expected to close no later than the first half of 2024, pending shareholder and regulatory approval.

Source from market share

The calculation is explained as follows:

• The LTM Revenue is the average revenue of the past five years
• The Enterprise Value is the average enterprise value of the past five years except for the TTM, which is concurrent

The merger between Jetblue and Spirit will create the fifth-largest airline in the U.S. The industry market share analysis is listed as follows:

JetBlue Airline’s current market shares:

Source from market share

Spirit Airlines’ current market shares:

Source from market share

• Based on the Break-even Analysis Jetblue has suffered a huge loss over the course of covid period, but it’s on the path to recover
• The operational aspect of Jetblue still remains below break-even point

Source from market share