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Prudential downgraded JetBlue Airways (JBLU
) to underweight from neutral, explaining that 17 of the last 20 markets the airline has added have not been profitable even at lower fuel prices.
Analyst Bob McAdoo says the current losses are a function of poor route selection and higher fuel prices. The analyst notes that the only consistent winners are short haul, Florida markets from John F Kennedy (JFK) airport, while Boston, Dulles, and JFK long haul markets have generally been unprofitable. He believes JetBlue needs to seek available gates elsewhere at JFK, reduce weak long haul flying, and slow aircraft deliveries if the stock is to be more than a short-term news-driven trade.