JetBlue's Beautiful Mirage

The numbers are in. According to the annual Airline Quality Ratings, Motley Fool Stock Advisor selection JetBlue (Nasdaq: JBLU  ) is once again the highest-quality U.S. carrier. It's the third year in a row that the upstart airline has topped the list. In fact, it's been top dog since first being included in the rankings in 2003.

Time to celebrate, right? Not so fast. There's much more here than meets the eye, even if the results look more impressive when you consider the performance of rest of the top ten:

Company

2005 rank

2004 rank

JetBlue

1

1

AirTran (NYSE: AAI  )

2

2

Independence Air*

3

N/A

Southwest (NYSE: LUV  )

4

3

United (Nasdaq: UAUA  )

5

4

America West**

6

6

Northwest

7

7

Continental (NYSE: CAL  )

8

9

Alaska (NYSE: ALK  )

9

5

American (NYSE: AMR  )

10

8

* No longer operating
** Now merged with U.S. Airways
Sources: USA Today and AQR


Ouch. Only one improved in the standings, and that was legacy carrier Continental. Alaska's rating plunged. Even Southwest got nicked. If you didn't look any deeper, you might conclude that JetBlue shares were a screaming buy -- a great company in a lousy industry.

Maybe, but a quick read of the full PDF report (which you can download here) reveals that, among other things, JetBlue's on-time performance was among the worst of those rated, dropping more than 10 percentage points from the year before. Moreover, JetBlue saw increases in its rate of customer complaints and mishandled baggage.

To be fair, JetBlue's ratings were still ahead of the industry average and the bulk of competitors in both of those categories, and its mark in denying passengers boarding -- which sometimes occurs when a flight is oversold -- was positively pristine. Nevertheless, the stats make it clear that the upstart carrier isn't doing as well as it once was. While it's impossible to predict an ongoing descent, I'd hardly be surprised if turbulence persists until management finds a way to reverse course.

We're taxiing toward related Foolishness:

JetBlue is a Motley Fool Stock Advisor selection. Ask for us anall-access passto all of the stocks that are helping David and Tom Gardner beat the S&P 500 by more than 30 percentage points each. It'sfree for 30 days.

Fool contributorTim Beyersdidn't own shares in any of the companies mentioned in this story at the time of publication, but he has relatives who are retired from United Airlines. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 512683, ~/Articles/ArticleHandler.aspx, 10/30/2014 12:06:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement