Lately, the news has been unkind to American Airlines (NASDAQ:AAL) and JetBlue (NASDAQ:JBLU), two airline stocks who can’t catch a break. Their Northeast Alliance, an attempt at carving out a chunk of the market for themselves, crumbled against the implacable barrier of law. But a recent victory against that same law looked like a turning point..until investors mostly shrugged and walked away, sending American down fractionally and JetBlue down a little more than fractionally.
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The win, of sorts, came from Judge Leo Sorokin, who hamstrung the Justice Department’s attempt to keep American and JetBlue from setting up partnerships that might replace the now-defunct Northeast Alliance. Sorokin ruled that no monitor needed to be established to keep antitrust relief going, which, ultimately, depended on the particulars of each case. Interestingly, Sorokin reportedly sided with the Justice Department earlier that the Northeast Alliance did violate federal antitrust law. It seems, though, that another such attempt—perhaps with smaller airlines—would ultimately prove less a violation than when it was American and JetBlue going after it.
Though JetBlue’s plans for the Northeast Alliance are, at least for now and in their former form, dead, it has aggressively pursued new options. First, it rolled out a new sale, offering a two-day travel sale on fall season flights that should get potentially interested passengers over the mark. It’s also working on a new deal with Sandals resorts that will, hopefully, drive more JetBlue passengers heading down to the Caribbean to stay at a Sandals resort.
Both airlines took a hit in Thursday trading, but optimists are still considering here. American Airlines is still a Hold by analyst consensus, but with an average price target of $19.17, it comes with a 15.07% upside potential. JetBlue, meanwhile, is a Moderate Sell, but its $8.60 average price target means an upside potential of 11.47%.
