Latest news with #SpiritAviation
Reuters
6 days ago
- Business
- Reuters
Yawing US airline betrays antitrust rudder limits
NEW YORK, Aug 12 (Reuters Breakingviews) - Like airplane pilots, trustbusters have important gauges to check, including whether a seller can achieve sufficient altitude. Discount carrier Spirit Aviation (FLYY.A), opens new tabwarned, opens new tab of 'substantial doubt' about its survival mere months after emerging from a bankruptcy caused partly by competition authorities nixing its deal with rival JetBlue Airways (JBLU.O), opens new tab. Although intervention is sometimes warranted, it's easy to misjudge the tailwinds. Spirit has charted a bumpy course. Its agreed $3.8 billion sale to JetBlue in 2024 promised high reward for higher risk than being acquired by Frontier (ULCC.O), opens new tab. JetBlue's plan to retrofit Spirit's shabby planes raised reasonable concerns about shrinking the budget market. Shareholders and creditors have alternatively balked at combining with Frontier. Another crash can be prevented. The judge that ruled in favor of grounding the JetBlue merger also left the door open, opens new tab for a different pairing. Combining with Frontier still makes sense. Without a partner, Spirit will struggle to succeed in a domestic market overwhelmingly dominated by American Airlines (AAL.O), opens new tab, Delta Air Lines (DAL.N), opens new tab, Southwest Airlines (LUV.N), opens new tab and United Airlines (UAL.O), opens new tab. Throw in a trade war and inflation worries, and the company's fate may be sealed. Success stories typically start with a little more runway. Former Federal Trade Commission Chief Lina Khan, for example, has touted, opens new tab the blockbuster initial public offering of design software developer Figma, which is now worth more than $40 billion, a couple weeks ago. Her Justice Department counterparts helped derail its agreed 2023 sale to larger rival Adobe for $20 billion. Wireless carrier T-Mobile (TMUS.O), opens new tab makes another good case for deal traffic control. Regulators blocked its $39 billion sale to AT&T (T.N), opens new tab in 2011. After being forced to go it alone, T-Mobile now tallies more subscribers than its former suitor and a $280 billion market value. The main difference is the safety systems. In red-hot software, venture capitalists are more likely to prop up even wildly unprofitable startups, and Figma's momentum was accelerating. As part of its generous breakup fee, T-Mobile secured wireless spectrum from AT&T, the lifeblood of its business. Other decisions are harder to understand. Self-propelling vacuum maker iRobot (IRBT.O), opens new tab competes against copycats and the company's decline was well-flagged, but regulators blocked its $1.4 billion sale to (AMZN.O), opens new tab last year anyway. It's now worth about $100 million. In Spirit's case, despite the plausible landing slot with Frontier, it has been impossible to align the various stakeholders. There's only so far trustbusters can fly the plane. Follow Jonathan Guilford on X, opens new tab and Linkedin, opens new tab.
Globe and Mail
11-05-2025
- Business
- Globe and Mail
JetBlue Airways Stock: Bull vs. Bear
JetBlue Airways (NASDAQ: JBLU) took to the sky in 2000 to great fanfare, offering a modernized take on the flying experience that blended the pricing of a discounter with some of the frills and perks associated with full-service airlines. But JetBlue is at a crossroads today. The airline enjoyed a period of overwhelming demand following the height of the COVID-19 pandemic, but the shares are down nearly 80% from their 2021 highs as investor concerns about the economy grow. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » JetBlue's plan for growth, a $3.8 billion acquisition of what is now Spirit Aviation Holdings, was blocked by regulators. A separate partnership with American Airlines Group to feed traffic to JetBlue was also shot down due to antitrust concerns. If you are wondering if now is the time to buy into JetBlue, read on for a look at the bull and bear cases from two Motley Fool contributors. Bull: Deep value opportunity Lee Samaha: JetBlue is not a stock that will suit most investors, so if you are most investors, read no further! However, it might fit a specific speculative investor with a penchant for deep value stocks. The airline is loss-making, cash outflowing, and flying into the turbulence of an uncertain trading environment. That said, there is a case for buying the stock. The downside is protected by the fact that the stock trades at a discount to its tangible book value, and there's potential upside from a possible takeover of the company. As of the end of the first quarter, JetBlue had $17.1 billion in total assets. Stripping out intangible assets of $399 million leaves $16.7 billion. Taking out the $14.7 billion in total liabilities leaves about $2.05 billion in net tangible assets. Its market cap at the time of writing is $1.58 billion, so it trades at a significant discount to its net tangible assets, which include ownership of 254 Airbus planes (including 47 newer neo airplanes) and 10 Embraer airplanes. Given Airbus and Boeing 's difficulty in ramping up deliveries, those assets might prove extra attractive in the current environment. In addition, JetBlue's loyalty programs and co-branded credit cards could be integrated into a potential acquirer's portfolio. After JetBlue's intended partnership with American collapsed after an antitrust lawsuit under the Biden administration, JetBlue is widely reported to be looking at a partnership with United Airlines Holdings, and JetBlue's management expects to make an announcement "regarding a domestic airline partnership" (without naming United Airlines) within the second quarter of 2025. While that partnership doesn't mean a merger can or will occur anytime soon, it could help JetBlue improve its operations and work toward a possible merger. That might make sense for JetBlue's intended partner. Bear: No easy way through this turbulence Lou Whiteman: JetBlue is stuck between a rock and a hard place. If airline industry history is any guide, there is no easy way out of that jam. JetBlue lacks the route network to compete with the giants who control nearly 80% of the domestic market, but its costs are too high to compete with scrappy discounters. Excluding fuel, JetBlue spent $0.1145 per seat per mile in the first quarter. By comparison, discounter Frontier Group Holdings spent $0.07. Management is doing what it can to bring down costs but bridging that divide will not be easy. And with the Spirit deal now off the table and an industrywide shortage of pilots and aircraft, there is no obvious path for the company to grow its way out of its predicament. JetBlue's debt is nearly 5 times the value of its equity. That's the highest ratio in the industry, and American is the only other airline with more than 1.2 times debt to equity. The airline was not profitable in its most recent quarter, and the whole industry could be flying into headwinds from here if inflation accelerates and the economy slows. JetBlue appears to be circling in the same pattern as one-time industry stalwarts like TWA and Eastern Airlines. Although there is no immediate threat of bankruptcy, there is also no obvious catalyst to get the stock moving upward. The rumored partnership or merger with United would take years to play out, and a deal would likely only happen on terms very favorable to United. Until JetBlue can articulate a clear path toward sustained profitability, investors would be wise to avoid boarding this airline stock. Should you invest $1,000 in JetBlue Airways right now? Before you buy stock in JetBlue Airways, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and JetBlue Airways wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor 's total average return is907% — a market-crushing outperformance compared to163%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 5, 2025
Yahoo
11-05-2025
- Business
- Yahoo
JetBlue Airways Stock: Bull vs. Bear
JetBlue shares have fallen considerably from their highs. JetBlue could be a decent deep value option for speculative investors. But investors should note the path to success from here is complicated. 10 stocks we like better than JetBlue Airways › JetBlue Airways (NASDAQ: JBLU) took to the sky in 2000 to great fanfare, offering a modernized take on the flying experience that blended the pricing of a discounter with some of the frills and perks associated with full-service airlines. But JetBlue is at a crossroads today. The airline enjoyed a period of overwhelming demand following the height of the COVID-19 pandemic, but the shares are down nearly 80% from their 2021 highs as investor concerns about the economy grow. JetBlue's plan for growth, a $3.8 billion acquisition of what is now Spirit Aviation Holdings, was blocked by regulators. A separate partnership with American Airlines Group to feed traffic to JetBlue was also shot down due to antitrust concerns. If you are wondering if now is the time to buy into JetBlue, read on for a look at the bull and bear cases from two Motley Fool contributors. Lee Samaha: JetBlue is not a stock that will suit most investors, so if you are most investors, read no further! However, it might fit a specific speculative investor with a penchant for deep value stocks. The airline is loss-making, cash outflowing, and flying into the turbulence of an uncertain trading environment. That said, there is a case for buying the stock. The downside is protected by the fact that the stock trades at a discount to its tangible book value, and there's potential upside from a possible takeover of the company. As of the end of the first quarter, JetBlue had $17.1 billion in total assets. Stripping out intangible assets of $399 million leaves $16.7 billion. Taking out the $14.7 billion in total liabilities leaves about $2.05 billion in net tangible assets. Its market cap at the time of writing is $1.58 billion, so it trades at a significant discount to its net tangible assets, which include ownership of 254 Airbus planes (including 47 newer neo airplanes) and 10 Embraer airplanes. Given Airbus and Boeing's difficulty in ramping up deliveries, those assets might prove extra attractive in the current environment. In addition, JetBlue's loyalty programs and co-branded credit cards could be integrated into a potential acquirer's portfolio. After JetBlue's intended partnership with American collapsed after an antitrust lawsuit under the Biden administration, JetBlue is widely reported to be looking at a partnership with United Airlines Holdings, and JetBlue's management expects to make an announcement "regarding a domestic airline partnership" (without naming United Airlines) within the second quarter of 2025. While that partnership doesn't mean a merger can or will occur anytime soon, it could help JetBlue improve its operations and work toward a possible merger. That might make sense for JetBlue's intended partner. Lou Whiteman: JetBlue is stuck between a rock and a hard place. If airline industry history is any guide, there is no easy way out of that jam. JetBlue lacks the route network to compete with the giants who control nearly 80% of the domestic market, but its costs are too high to compete with scrappy discounters. Excluding fuel, JetBlue spent $0.1145 per seat per mile in the first quarter. By comparison, discounter Frontier Group Holdings spent $0.07. Management is doing what it can to bring down costs but bridging that divide will not be easy. And with the Spirit deal now off the table and an industrywide shortage of pilots and aircraft, there is no obvious path for the company to grow its way out of its predicament. JetBlue's debt is nearly 5 times the value of its equity. That's the highest ratio in the industry, and American is the only other airline with more than 1.2 times debt to equity. The airline was not profitable in its most recent quarter, and the whole industry could be flying into headwinds from here if inflation accelerates and the economy slows. JetBlue appears to be circling in the same pattern as one-time industry stalwarts like TWA and Eastern Airlines. Although there is no immediate threat of bankruptcy, there is also no obvious catalyst to get the stock moving upward. The rumored partnership or merger with United would take years to play out, and a deal would likely only happen on terms very favorable to United. Until JetBlue can articulate a clear path toward sustained profitability, investors would be wise to avoid boarding this airline stock. Before you buy stock in JetBlue Airways, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and JetBlue Airways wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Lee Samaha has no position in any of the stocks mentioned. Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. JetBlue Airways Stock: Bull vs. Bear was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
