What happened

Shares of JetBlue Airways (NASDAQ:JBLU) gained significant altitude in January, climbing 12% during the month, according to data provided by S&P Global Market Intelligence. The company is early in its planned overhaul designed to boost profitability, but the initial results of that push look promising.

So what

At mid-month, JetBlue reported adjusted fourth-quarter earnings of $0.50 per share, ahead of the $0.42 consensus, as unit revenue climbed by 2.4% and nonfuel unit costs decreased by 3.6%. Shares of the airline declined by 28% in 2018 due to a combination of higher fuel prices and overcapacity in some of its key markets, but JetBlue in October announced a multiyear plan designed to improve results.

JetBlue is shrinking its footprint at Long Beach, Calif., its original West Coast hub and closing stations including Washington, D.C.'s Dulles Airport and Daytona Beach, Fla., in order to focus on high-performing markets including Fort Lauderdale, Boston, and New York, where it believes it has competitive advantages. Those changes are expected to boost revenue by up to $120 million annually by 2020.

JetBlue planes parked side by side.

Image source: JetBlue.

Those changes won't come in time to provide a boost to the second quarter of 2019, which also will be impacted by the late Easter and Passover travel seasons this year, but on a call discussing earnings, management said the airline is on track to hit the cost cuts envisioned in the plan and is ahead of schedule on boosting revenue.

Check out all our earnings call transcripts.

Now what

JetBlue's strategic plan makes sense, but investors need to be aware it will take time to play out. The company won't see costs really come down until it completes an ongoing interior cabin retrofit, and revenue enhancements including a new fare structure will be rolled out gradually beginning in the fourth quarter.

The company's efforts are targeting 2020 as the year investors will see real results from its overhaul. Existing shareholders will likely do fine sitting tight and letting the plan play out; given the measured nature of the revamp, there isn't much urgency to jump aboard right now.