Tuesday, September 28, 2010

jetBlue Airways to go it alone

JetBlue Airways has no plans to get involved in airline merger activity, preferring instead to grow on its own, the company's chief executive said.

Responding to Southwest Airlines' plan to buy AirTran, JetBlue CEO Dave Barger said the company growth strategy "has proven to be the right path forward" and would "not be distracted" from its goals.

"Overall, (Southwest) does not change our plans to grow organically, and to focus on growing (Boston) and the Caribbean," Barger said in a memo to employees.

"We could easily double our size overnight, but at what cost to our balance sheet, our culture and brand? We've worked too hard for those assets," Barger said.

JetBlue is expanding in Boston and the Caribbean to compete more with bigger rivals, including Southwest, Delta Air Lines and American Airlines.

The USD$1.4 billion Southwest-AirTran deal, the first among healthy major carriers in the low-cost sector, lifted JetBlue shares sharply on Monday, mainly on speculation that it may view more favorably the prospect of consolidation.

Analysts said its strong presence in New York would make it a key player in any new merger activity. JetBlue is based at New York's Kennedy Airport.

JetBlue shares rose 2 percent on Tuesday to lead the sector.

Barger said airlines that grow through mergers "may be bigger," but they're "also distracted by their own integration issues and they usually take their eye off the customer."

"This gives us another opportunity to win by playing our game even better" and competing "on our own terms," he said.


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