Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of eccentrically capitalized JetBlue Airways (Nasdaq: JBLU) popped 10% in trading today, lifted (presumably) by a Bloomberg report suggesting there's a movement afoot among airlines to trim excess capacity.

So what: It's Economics 101, folks. When supply (of airplane seats) decreases, but demand for air travel remains the same, prices must rise. Investors seeing capacity cutbacks at Delta (NYSE: DAL), Southwest (NYSE: LUV), and AMR (NYSE: AMR) are drawing the logical conclusion that higher prices, when they come, will be good news for everyone's profits -- JetBlue included.

Now what: They're probably right about that -- but it still doesn't make JetBlue a buy. While the company's shares don't look particularly expensive at 14 times earnings, you've got to look at that P/E in the context of long-term earnings growth expectations, which currently hover around 7% for JetBlue. Even a modest increase in profitability probably isn't enough to make these shares cheap. For that to happen, we'd need JetBlue literally to double its earnings power -- and in a competitive industry like air travel, I just don't see that happening.

Is JetBlue as cheap as it looks? Will its shares fly even higher? Add JetBlue to your Fool watchlist, and find out.