Talk about bad timing — or maybe not.
Goldman Sachs analyst Robert Barry upgraded the stock of JetBlue Airways Corp. to “Buy” late Wednesday, just as planeloads of angry passengers were finally being freed after being trapped in jets for as long as 11 hours by a weather-related nightmare at New York’s John F. Kennedy International Airport.
Barry, who declined an interview request, predicted in a research report that the discount carrier’s profit margin growth likely will surpass most others airlines in 2007 as the carrier benefits from its more diverse route network and new fleet of Embraer 190 jets.
Try telling that to passengers on 10 JetBlue planes whose flights at JFK were “significantly delayed” during Wednesday’s snow and ice storm, due in part to congestion, frozen equipment and an effort to keep planes ready to take off in case the weather improved.
The company later apologized and said it would offer refunds and free flights to passengers delayed onboard a plane for more than three hours.
The story was front-page news for both New York tabloid newspapers and dominated local television coverage. So JetBlue’s stock had to take a hit from the negative publicity, right?
Wrong: JetBlue shares jumped 62 cents, or 4.7 percent, to close at $13.85 on the Nasdaq Stock Market.
The reason why was clear to Robert Mann, a Long Island, N.Y.-based aviation consultant: “Traders weren’t on the planes.”
Mann also predicted the negative headlines around JetBlue will fade for most consumers.
“For people who weren’t directly affected but just heard the story, the lure of a low fares will largely counteract any anecdotal stories,” Mann said. “For people who were directly affected, the effect will last longer.”