JetBlue Adds 24 New Routes In A Bid To Capture Traffic

On September 10, JetBlue announced that it will launch 24 new routes later this year in anticipation of improving demand for leisure travel.

JetBlue (JBLU) believes that the new routes will enhance its strength in its focus cities, in Florida, in Latin American, the Caribbean and on cross-country routes. The carrier’s new flights will start in November and December, with ticket sales having already started on September 10.

The new routes will help JetBlue in reactivating some temporarily parked aircraft, the company says.

Scott Laurence, head of revenue and planning, JetBlue stated, “This latest series of new routes – even in the current environment – advances our revised network strategy, returns more aircraft to the skies and doubles down on our ability to generate more cash sooner.”

In June, JetBlue announced the addition of 30 new domestic routes in markets where leisure and “visiting friends and relatives” travel is showing some signs of strength.

In July, the airline announced a strategic partnership with American Airlines (AAL) to create a “seamless experience” for travelers in the Northeast, including the option to book a single itinerary and an improved on the ground experience. The partnership will also involve new and expanded routes.

Peers like United Airlines (UAL) and Southwest Airlines (LUV) have also added new destinations as leisure travel improves in the US though business travel continues to remain weak due to the pandemic. Airlines have been taking several measures to lure customers, including canceling or temporarily suspending change fees.

On Sept. 8, Morgan Stanley analyst Ravi Shanker initiated coverage of JetBlue stock with a Buy rating and a price target of $16. The analyst is bullish on the timeline for recovery in airline traffic and sees air travel demand returning to pre-COVID levels, on a “run-rate basis,” by late 2021 to early 2022.

The analyst feels that airlines with heavy exposure to domestic leisure travel, medium-haul lengths, strong customer loyalty programs and/or bargain fares will “see demand come back first.” (See JBLU stock analysis on TipRanks)

Overall, the Moderate Buy consensus for JetBlue is based on 3 Buys, 5 Holds and no Sells. The stock has declined about 34% year-to-date and the average analyst price target of $12.17 indicates a downside of 1.4% in the coming months.