Why JetBlue Airways Corporation Stock Is Flying Higher

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades – just in case their reasoning behind the call makes sense.

What: Shares of JetBlue Airways  (NASDAQ: JBLU  ) were flying through the roof today, gaining as much as 5% after the airline launched high-speed Wi-Fi on three of its aircraft.

So what: While in-flight Wi-Fi is nothing new, it is JetBlue's hyped "Ka-band" satellite technology that's fueling optimism. Through Ka-band, JetBlue promises "real broadband Internet in the sky" and "at-home Internet speeds". According to JetBlue, Fly Fi – as the service will be known – offers a browsing speed that's eight times faster than those being currently offered by peer airlines. Fellow Fool Adam Levine-Weinberg considers the in-flight Wi-Fi offered by Southwest Airlines (NYSE: LUV  ) as the best in the industry, in terms of availability, speed, and cost. JetBlue clearly wants to disconnect Southwest Airlines from the game.

It's not a dry launch – you can browse for free (basic email and browsing) on Fly Fi equipped planes through June 2014. And if you are a movie buff, or a download freak, you can access high-bandwidth live streaming by paying $9 an hour for JetBlue's Fly Fi Plus service. Starting with three flights today, JetBlue plans to get two more aircraft under the Wi-Fi services before the year ends, and take the number up to 140 by the end of 2014. While its Airbus fleet will be covered next year, its Embraer fleet will have Fly Fi by 2015.

Now what: Stiff competition has taken a toll on JetBlue's margins in recent times, and premium services like Fly Fi is just one of the tools that the airline wants to use to get more travelers on board. The launch has come at an opportune time, what with the Federal Aviation Administration recently giving the go-ahead to use smartphones and tablets on flights. Elite flyers, who are willing to pay to stay connected up on air, should help JetBlue get some extra revenue.

As one of the last airlines to offer Wi-Fi connectivity, JetBlue needs to make sure it lives up to the hype created around Ka-band and Fly Fi. After all, the majority of travelers prefer great in-flight connectivity over legroom, snacks, or even access to the restroom – at least that's what a recent survey by Honeywell Aerospace concluded. If that holds water, JetBlue's fortunes could fly with Fly Fi.

Best of all, JetBlue is so confident that it has almost launched an open challenge. "Every traveler using Wi-Fi on JetBlue or any other carrier should test their connection with SpeedTest.net, and post their speeds using #WiFiFlightSpeed on social networks. Travelers should be able to see the speeds of all Wi-Fi systems in the sky and make an informed choice," is what Marty St. George, JetBlue's senior vice president marketing and commercial strategy, had to say about the service.

Next time I fly a JetBlue plane equipped with Fly Fi, I plan to test it and tweet the results – all while I'm still up there. If my tweet reaches your timeline within a second, I'll give JetBlue my loyalty.

Even as JetBlue gets Fly Fi on its flights, this stock will have already taken off!
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (3)

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: 2763232, ~/Articles/ArticleHandler.aspx, 11/26/2014 4:58:08 AM

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