In the wake of Lufthansa's (OTCQX:DLAKY) $300 million investment in JetBlue (NASDAQ:JBLU), it's worth looking at how JetBlue CEO David Barger is doing after just over six months on the job. If you recall, he replaced founder David Neeleman in May, mainly because Neeleman had presided over a severe decline in JetBlue's share price. But since then, JBLU shares have only fallen further: the switch of CEO seems to have made no difference at all. And even Thursday's spike upwards on the Lufthansa news barely registers as a blip on the longer-term chart with its seemingly inexorable downward trend.
But just because the shares are cheap doesn't mean that the Lufthansa investment makes any sense: DealBook has a good round-up of analysts scratching their heads and trying to work out what on earth Lufthansa might be thinking here. Sure, JetBlue's landing slots at JFK are reasonably valuable, but a minority investment in a U.S. domestic carrier hardly fits in to Lufthansa's stated strategy, especially since the move is guaranteed to annoy Lufthansa's existing U.S. partner, United. Maybe Lufthansa just wanted to take advantage of the weak dollar, and this was the only U.S. investment it could find.