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JetBlue:10 Years On Top of the Tarmac

Stocks in this article: JBLU LUV AMR UAUA DAL

New York ( TheStreet) -- It's possible that no airline has come as far in its first ten years as JetBlue (JBLU) has.

Since its first flight from New York's John F. Kennedy International Airport to Fort Lauderdale-Hollywood International in February 1999, JetBlue has evolved into one of the four principal carriers in the world's largest aviation market. In fact, if the merger between United (UAUA) and Continental (CAL) is approved, the four leading New York carriers will be the three biggest U.S. airlines, plus JetBlue.

Jet Blue

Moreover, a buildup that began in 2004 means that JetBlue is also the largest carrier at Boston Logan Airport. And recently, JetBlue began an effort to operate at Washington Reagan National Airport, another key Northeast airport. If approved by regulators, a slot swap with American (AMR) would enable JetBlue service from National beginning Nov. 1.

JetBlue's accomplishments have been accompanied -- and propelled -- by its iconoclastic customer service approach, which includes amenities like a good amount of legroom, free snacks and free live TV and radio, as well as a modernistic, state-of-the-art terminal that opened at Kennedy in 2008. Yet despite all the extras, JetBlue remains a low-cost, low fare airline. The combination of low fares and amenities has engendered a level of passenger loyalty that once led aviation consultant Mike Boyd to remark: "JetBlue doesn't have passengers. It has groupies."

JetBlue burst on the scene as a rebellious upstart, challenging the long-prevailing concept that domestic passengers would not venture to Kennedy for domestic flights. Today, JetBlue is firmly established as one of the Big Three low-cost carriers, which have expanded as the legacy network carriers reduce their domestic presence.

The trio of AirTran (AAI), Southwest (LUV) and JetBlue control about 30% of the domestic market today, up from 24% five years ago.

Stifel Nicolaus analyst Hunter Keay calls JetBlue an "incredible" success story.

"To have this kind of model up and running with a favorable brand and reliable operations at challenging airports and a management team that values employee satisfaction and employee morale, that's something that's hard to find in any business, let alone this one, where the mortality rate is quite high," said Keay. "These guys have done an impressive job and you have to give them credit."

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