It wasn’t so long ago when airline stocks JetBlue (NASDAQ:JBLU) and American Airlines (NASDAQ:AAL) were reeling from the loss of a new partnership that gave Frontier Group (NASDAQ:ULCC) a little extra clout after picking up the pieces. These pieces, however, may not be Frontier’s for much longer, as a recent court decision bought JetBlue and American a little more time to properly split up their partnership.
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U.S. District Judge Leo Sorokin shut down the injunction against JetBlue and American temporarily, noting that the injunction that “ultimately” will be entered won’t take effect immediately but will take effect 21 days after the final judgment and the permanent injunction are issued. Sorokin issued the ruling after both JetBlue and American came to the court with a request to allow code sharing and loyalty plan details to continue even after the “Northeast Alliance,” as it was called, was dissolved.
Sorokin, not unexpectedly, noted that the defendants’ proposed time period to dissolve the alliance was too long, and the plaintiffs’ time was too short. Hence, some kind of medium was struck to give the Northeast Alliance time to properly dissolve but not to keep operating. The good news kept going for JetBlue; it may lose a bit of ground in the U.S., but it can make up some of that loss with new ticket counters at Schiphol Airport in Amsterdam.
Analysts aren’t too pleased with the outlook at JetBlue. Three Hold ratings and two Sells add up to form a Moderate Sell consensus rating on JetBlue stock. However, it offers a modest upside potential thanks to its average price target of $8.05 per share.
