Shares of JetBlue Airways (JBLU 3.39%) have had a miserable run in 2018. The stock price is down 18% year-to-date due to a combination of higher fuel prices and overcapacity in some of its key markets. The company can't control oil prices, but some of its capacity and profitability pains derive from self-inflicted wounds.

An industry darling in the years after its 2000 debut, JetBlue today ranks near the bottom among U.S. airlines in key metrics, including its price-to-earnings, price-to-sales, and enterprise-value-to-EBITDA ratios.

JetBlue tailfins lined up at the terminal.

Image source: JetBlue Airways.

Management has made aggressive attempts to get the one-time outperformer back on track -- trimming costs, cutting back on underperforming routes, and reallocating its assets around a few key markets. But with the U.S. airline industry now more streamlined following a decade of bankruptcies and consolidations, it's not as easy as it once was for JetBlue to find profitable growth opportunities.

Let's look at the airline's plan to get back to a cruising altitude, and consider whether JetBlue stock is a buy today.

Spend less, earn more

JetBlue is well into a program announced in December 2016 designed to cut costs by upwards of $300 million annually by 2020. A lot of that work is being done behind the scenes, in areas such as maintenance, and in airport staff and crew scheduling, and has been accomplished via the introduction of new software tools to better-manage spare part inventory and to optimize labor hours.

The airline has also upgraded its airport kiosks so passengers can do more without requiring assistance, bringing down total staffing needs and reducing costs. Little changes can add up: Management expects these incremental cost savings to boost earnings per share by between $0.30 and $0.40 by 2020.

Next year, the airline will introduce a no-frills basic economy ticket class aimed at the most price-sensitive shoppers, which will allow it to better compete on leisure routes and potentially add ancillary revenue via extra service fees.

The airline already increased its checked bag fee in 2018, but it still has some levers it could pull to increase revenue. The airline, unlike some of its rivals, provides free high-speed Internet in flight, and has more legroom in coach than most other carriers.

Reshuffling the route map

Much of JetBlue's route plan work focuses around three airports: New York's John F. Kennedy, Fort Lauderdale, Fla., and Boston. Each offers it  a different opportunity for improvement. At JFK, a highly congested airport where delays are common, the company is attempting to increase its share without increasing flights by swapping out 150-seat Airbus A320s for 200-seat A321s.

Boston, which it serves using a combination of full-sized Airbus and smaller Embraer E190s, has been JetBlue's primary corporate travel success story. In the years to come, the E190s will be replaced by more-efficient A220s, which should help it boost margins. A bigger issue for JetBlue has been Delta Air Lines' expansion in the market, but expect JetBlue to continue to aggressively fight for Boston's corporate travel business. It's also a likely launching point for any European flights the airline may eventually add.

Fort Lauderdale is primarily a leisure market, but JetBlue has held up well there despite competition from ultra-low cost rivals including Spirit Airlines and Frontier Airlines. JetBlue's routes there are likely to get a boost next year when it begins offering basic economy fares -- the airline's attempt to match Spirit and others on price while still offering at least some of its higher-touch service and amenities.

Meanwhile, JetBlue is shrinking its footprint at Long Beach, California -- its original West Coast hub -- and closing stations including Washington, D.C.'s Dulles Airport, Daytona Beach, Fla., and St. Croix. At its investor day, the company said it expects its revamped network will boost revenue by $100 million to $120 million by 2020.

So is JetBlue a buy?

JetBlue management in October said they believe that with the changes they are making, the airline can earn $2.50 to $3 per share in 2020. That would be a substantial improvement from the $1.45 in earnings per share analysts expect this year, and that number is inflated thanks to last December's tax overhaul.

Airlines are cyclical businesses, but the company believes it can increase earnings even if GDP growth weakens or oil prices continue to rise. Based on its price-earnings ratio of just 8.5, JetBlue looks attractive.

Still, I see no reason to rush in. Most of its revenue initiatives, including the new fare classes, won't start showing results until the second half of 2019. And proper year-over-year comparisons in the first half of next year will be complicated by a new deal the airline reached with its pilots that was approved last July. While investors wait for JetBlue's strategy to play out, the airline will likely trade more based on reactions to oil prices, economic data, and oil-related geopolitical tensions, all areas where there appears to be more downside risk today than upside.

JetBlue's turnaround plan makes sense, and the company could indeed be ready to shine by 2020. Existing shareholders will likely do well by sitting tight and letting matters unfold, but given the time frame during which that will happen, there's not much urgency to buy the stock today.