Airline company JetBlue (NASDAQ:JBLU) made a major announcement after the merger with Spirit Airlines (NYSE:SAVE) failed, and it was pretty much just the opposite of what regulators were looking for. JetBlue cut several of its routes as it looks for a return to profitability. The routes are out of JetBlue’s primary hub at JFK International Airport in New York City and will include flights to Milwaukee, Wisconsin; Portland, Oregon; Ponce, Puerto Rico; and San Jose, California.
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Further, JetBlue is also pulling out of Baltimore/Washington International, no longer considering it a “focus city.” JetBlue is now mainly focusing on “leisure routes,” reports note, adding service to the Caribbean as well as flights to Paris, France.
Passengers Now Have Fewer Options
In a move that suggests that federal judges and lawyers may not be the best judges of what businesses should do, the merger between JetBlue and Spirit was shut down as judges and lawyers believed that the move would restrict competition and mean fewer options for passengers. Now, passengers actually do have fewer options as JetBlue cut its total number of routes, making JetBlue service completely inaccessible in those locations.
However, the court case may not have stopped anything anyway; reports note that JetBlue’s planned route changes were in the works well before the courts struck down merger plans. Would Milwaukee et al. still have JetBlue service if the courts had let the merger go through? That’s unclear. But they certainly don’t have it now.
Is JetBlue a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on JBLU stock based on four Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 41.43% loss in its share price over the past year, the average JBLU price target of $4.33 per share implies 14.51% downside risk.
