Wolfe: Delta’s move into Boston could ultimately prove good news for JetBlue

|About: Delta Air Lines, Inc. (DAL)|By:, SA News Editor

Delta Air Lines (DAL) last week included Boston in its list of key hubs and markets for the first time, worrying JetBlue (JBLU) investors, but Wolfe Research thinks DAL’s decision could be good news for JBLU, much in the way it ultimately was for Alaska Air (ALK).

Wolfe believes JBLU management seeks a 7% return on investment capital this year, but it does not see it happening under the current strategy; the firm figures DAL's growth into Boston might help to force hard choices, as it did for Alaska Air.

ALK shares fell 26% from peak to trough in May-June 2013 on fears of competitive capacity growth, which led it to take action on fees and resulting in ALK stock gains doubling over the next year.

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