Morgan Stanley downgrades JetBlue on Virgin America rivalry

[MiAAmi]

Morgan Stanley downgrades JetBlue on Virgin America rivalry

By Laura Mandaro
Last Update: 11:45 AM ET Aug 7, 2007


SAN FRANCISCO (MarketWatch) -- Virgin America's launch of transcontinental flights could hurt revenue at JetBlue Airways, said Morgan Stanley analyst William Greene Tuesday. He downgraded his rating on JetBlue to underweight from equal weight, lowered his earnings forecasts and set a price target of $11 a share. Virgin America will make its first cross-country flight on Wednesday, posing a threat to sales of carriers like JetBlue. "We expect increased competition and promotional, introductory fares could have a significant, negative impact," on revenue per available seat mile in JetBlue's transcontinental markets, said Greene. Shares in JetBlue fell 3.7%, worse than its peers.

 

[AstroLounge]

Personally I wouldn't be surprised to see Virgin make a run at JetBlue. I like JetBlue and the product it offers and question whether VA would look at JetBlue's infrastructure (new terminal at JFK and extensive network along the Eastern Seaboard and developed FLA presence) as a way to grow quickly. The President at VA has to step down within 6months and last I heard they didn't have a Director of Marketing. When it comes to business and certainly THIS Industry- ANYTHING is possible. JetBlue and Virgin seem to be courting the same type of pax base.....I just hope the JB name doesn't dissappear in the process.