Leave it to JetBlue
It's a bold move, and it's one that is going to create turbulence for its rivals. Legacy airlines are unlikely to play along, yet they may miss out on active travelers intrigued by JetBlue's offer.
JetBlue has disrupted the industry before. Despite offering fares on the low end of the pricing spectrum, few would consider JetBlue a cheapie service. Guests receive unlimited snacks, at a time when many carriers are charging for their edibles. They are treated to customized entertainment, with every seat having access to dozens of Sirius XM Radio
My biggest fear is that JetBlue may be booking a flight to the point of no return. Even if rival carriers don't follow suit, travelers will expect a similar promo next year during this seasonal lull.
An industry that has been a historical disappointer has just had its value proposition altered, again.
Fasten your seatbelts. It's going to be a bumpy flight.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Pocket-change collector Coinstar
(Nasdaq: CSTR) apparently has rounded up enough coins to hire fancy lawyers on retainer. The company behind the Redbox DVD rental kiosks is fed up with studios holding back on their latest releases. It filed a lawsuit against News Corp.'s(Nasdaq: NWS) Twentieth Century Fox this week, following an earlier legal claim against General Electric's(NYSE: GE) majority-owned Universal Studios. Hollywood may fear these $1 rentals, but sometimes the free market has to decide a flick's true worth. - Investors need to always look beyond the bottom line. NetEase.com
(Nasdaq: NTES) posted blowout quarterly results on the surface, but shares of China's online-gaming leader fell on the news. It turns out that foreign-exchange gains and the decision to close out dormant accounts padded results. NetEase disclosed all of this, so there's no harm there. Investors just need to read through an entire report before breaking into victory laps.
Until next week, I remain,
Rick Munarriz
