http://www.newyorkbusiness.com/apps/pbcs.dll/article?AID=/20070216/FREE/70216001/1048
JetBlue may pay high cost for stranding fliers
Published: February 16, 2007 - 9:02 am
(AP) — Icy weather conditions that led to widely publicized and long delays for hundreds of JetBlue Airways Corp. passengers could cost the low-cost carrier $7 million in operating profit, a Raymond James & Associates analyst estimated Friday.
Analyst Buck Horne in a client note estimated the delays could eat $7 million, or 2 cents per share, from JetBlue’s first-quarter operating profit.
That takes his quarterly estimate to a loss of 6 cents per share, which meets the consensus estimate, according to a Thomson Financial poll.
The company on Wednesday canceled 250 out of about 505 flights, and on Thursday canceled about 195 of its 568 scheduled flights, due to icy weather conditions and crowded gates at John F. Kennedy International Airport in New York.
On Wednesday, hundreds of passengers were stuck in parked planes at JFK, in some cases for up to 11 hours. JetBlue founder and Chief Executive David Neeleman since apologized for waiting hours to ask JFK's operator, the Port Authority of New York and New Jersey, for help in getting passengers off the planes but the situation generated large amounts of negative publicity for the carrier.
Mr. Horne reiterated an ''outperform'' rating on the stock and $16 target price, and said he expects the media storm to subside very quickly.
''While these types of operational disruptions are regrettable, they are ultimately a part of life in the airline industry, and we do not believe that there will be any lasting impact to JetBlue's brand image,'' he wrote.
JetBlue’s stock got a lift on Thursday after Goldman Sachs analyst Robert Barry upgraded the airline’s stock to ''buy'' from "neutral" late Wednesday, just as planeloads of angry passengers were finally being freed. Shares of the Queens-based carrier rose 4.7% to close at $13.85. The stock has traded in a range of $8.93 to $17.02 over the past 12 months.
Do you think JetBlue’s stock is a “buy”? Click here to take the Crain’s online poll now.
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