Lufthansa: JetBlue Deal's Not About the Money

Lufthansa CFO Stephan Gemkow commented on the financial value of the transaction, saying JetBlue "has been undervalued and the dollar has been relatively weak, and it will stay like this for a long time." He added that while U.S. competitors at Kennedy connect 50% or more of their international traffic to domestic flights, Lufthansa connects just 5%.

Although JetBlue's financial performance has been lagging, Lufthansa sees something it likes in the low-priced carrier's model. Unlike the vast majority of its peers, JetBlue focuses on offering an enhanced passenger experience in coach class. This week, for instance, JetBlue began offering free e-mail and instant messaging on one of its aircraft. Several competitors are also moving to offer Internet access, possibly more extensively, but "free" is not part of their plan.

Shares of JetBlue jumped 14% during the previous session, and Friday they were up another 0.8% to $7.21.

At Kennedy, where Lufthansa has three daily flights, JetBlue serves 48 destinations and carries 50% of the domestic traffic. Next year, it will open a spectacular new terminal. Sure, it will be tough to connect international passengers at a terminal that will not have federal inspectors or widebody gates, but JetBlue is already working out a plan to code-share with Ireland's Aer Lingus, so somebody thinks it will nevertheless be possible to exchange passengers.

Kennedy is the site of one of the airline industry's most critical battles as U.S. carriers battle for international traffic in New York, the world's biggest aviation market. AMR's (AMR Quote) American opened its shiny new terminal this summer, and Delta (DAL Quote) is preparing to build one.