Associated Press
JetBlue to Exit Atlanta on Competition
Friday October 24, 12:55 pm ET
JetBlue Is Pulling Out of Atlanta After Intense Competition From Delta, AirTran
ATLANTA (AP) -- Discount airline JetBlue Airways is pulling out of Atlanta six months after it arrived, canceling flights to the West Coast because of intense competition from Delta Air Lines and AirTran Airways.
The setback was noted Friday by J.P. Morgan airline analyst Jamie Baker, who credited Delta with "taming one of its low fare competitors" and downgraded JetBlue's stock to "underweight."
Shares of JetBlue fell $5.94, or 9.6 percent, to $55.86 on the New York Stock Exchange in afternoon trading. Investors apparently considered JetBlue's fate in Atlanta a bad sign for discout carrier AirTran, too, as its stock price dropped $1.33, or 8 percent, to $14.47 on the NYSE.
JetBlue had entered the Atlanta market to challenge Delta' dominance between there and Long Beach, Calif., and the move roughly coincided with Delta's launch of its own discount airline, Song. It also prompted AirTran to add coast-to-coast flights.
JetBlue's Atlanta-Long Beach flight was the first nonstop service to the West Coast by a discount carrier, resulting in fares for advance-purchase flights that were as low as $176 round-trip at the height of the price war.
But on Thursday, JetBlue officials said they would pull out on Dec. 4, ending service to Long Beach and Oakland, Calif.
"We just thought it was a little crazy," JetBlue CEO David Neeleman said.
AirTran President Bob Fornaro said JetBlue, which has a hub at Kennedy Airport in New York, was at a disadvantage because it does not have an Atlanta hub feeding customers into its flights.
JetBlue to Exit Atlanta on Competition
Friday October 24, 12:55 pm ET
JetBlue Is Pulling Out of Atlanta After Intense Competition From Delta, AirTran
ATLANTA (AP) -- Discount airline JetBlue Airways is pulling out of Atlanta six months after it arrived, canceling flights to the West Coast because of intense competition from Delta Air Lines and AirTran Airways.
The setback was noted Friday by J.P. Morgan airline analyst Jamie Baker, who credited Delta with "taming one of its low fare competitors" and downgraded JetBlue's stock to "underweight."
Shares of JetBlue fell $5.94, or 9.6 percent, to $55.86 on the New York Stock Exchange in afternoon trading. Investors apparently considered JetBlue's fate in Atlanta a bad sign for discout carrier AirTran, too, as its stock price dropped $1.33, or 8 percent, to $14.47 on the NYSE.
JetBlue had entered the Atlanta market to challenge Delta' dominance between there and Long Beach, Calif., and the move roughly coincided with Delta's launch of its own discount airline, Song. It also prompted AirTran to add coast-to-coast flights.
JetBlue's Atlanta-Long Beach flight was the first nonstop service to the West Coast by a discount carrier, resulting in fares for advance-purchase flights that were as low as $176 round-trip at the height of the price war.
But on Thursday, JetBlue officials said they would pull out on Dec. 4, ending service to Long Beach and Oakland, Calif.
"We just thought it was a little crazy," JetBlue CEO David Neeleman said.
AirTran President Bob Fornaro said JetBlue, which has a hub at Kennedy Airport in New York, was at a disadvantage because it does not have an Atlanta hub feeding customers into its flights.