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(JetBlue story updated with closing stock price and March traffic numbers)



) -- In trying to pick the biggest winners in the current round of airline industry deal-making,


(JBLU) - Get JetBlue Airways Corporation Report

should not be overlooked.

In the 10 years since the airline began flying, JetBlue has made itself the biggest domestic airline at two key Northeast airports, New York Kennedy and Boston Logan. Now the iconoclastic carrier is moving aggressively to operate and expand at Washington Reagan National airport, the most convenient airport in the nation's capital and arguably in the entire country, given its proximity to mass transit.

Investors took notice of the carrier Tuesday, when it

reported that March revenue per available seat mile rose 17%. Shares in JetBlue closed Tuesday at $6.35, up 47 cents or about 8%.

Currently, two major deals are underway in the airline industry, both offering side benefits for JetBlue. Last month, after regulators objected to a slot swap proposed by


(DAL) - Get Delta Air Lines, Inc. Report


US Airways

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, the two carriers offered to divest some slots at National and New York LaGuardia to four low-fare carriers. The group includes JetBlue, which would get nine slots at National. Slots are assigned takeoff and landing times, necessary to operate at congested airports.

Also last month,



and JetBlue announced they would team up at Kennedy, enabling travelers to connect between JetBlue domestic flights and American international flights. JetBlue also exchanged Kennedy slots for eight slot pairs at National, where it plans to offer eight daily departures starting in November.

A few other plusses for JetBlue: Passengers could connect between American and JetBlue flights at Logan. JetBlue announced it has petitioned the Federal Aviation Administration for access to unused slots at National in the early evening and late evening; with a single slot to augment the nine slots it would get from US Airways, it could offer five daily round-trip flights.

Additionally, following a Oneworld board meeting last week in Los Angeles, American CEO Gerard Arpey said he "wouldn't be surprised to see many of

the Oneworld partners talking to JetBlue as well." These moves could enhance JetBlue revenue without adding significant costs.

Of course, the airline industry is currently focused on other merger possibilities, and here again JetBlue could emerge a winner. If


( UAUA) does merge with US Airways, it is likely that regulators would require divestiture at National, since the two carriers have dominant positions at both Washington airports. United operates a hub at Dulles, while US Airways operates 47% of the seat capacity at National, a share that would increase if the slot trade with Delta is approved.

It is important to remember, however, that many observers feel it's more likely that United will merge with


(CAL) - Get Caleres, Inc. Report

, not US Airways. A United/Continental merger would seem to have little impact on JetBlue.

Despite the potential benefit from a United/US Airways merger, JetBlue shares have barely moved since merger chatter began to surface on Wednesday, April 7. In the 24 hours after the first report, US Airways shares rose 11% before falling back; the shares ended down for the week. United shares rose 7% and fell back only slightly. JetBlue shares, meanwhile, were flat.

In fact, before Tuesday, shares in JetBlue had risen only about 6% this year. By contrast, stock in United is up nearly 70%, while US Airways stock is up 55%.

Standard & Poor's analyst Jim Corridore currently has a buy on JetBlue, with a target price of $8. Calling the stock undervalued in an April 10 report, he wrote, "Despite negative industry trends, JetBlue returned to profitability in 2009. We think the carrier will experience improved profitability in 2010 on an improving demand picture along with higher average prices and benefits from capacity growth in areas where demand is relatively strong, such as Boston and the Caribbean."

At Boston Logan, JetBlue offers 76 peak-day departures to 34 destinations. At Kennedy, it offers 154 peak-day departures to 52 destinations. In May, it will add flights to Punta Cana at both airports.

OAG consultants Stan Hula and Sandy Rederer both praise the carrier's strategy. "They have a well thought-out plan," Hula said. ""The marketplace has a way of rewarding companies that do a good job, and JetBlue clearly is doing a good job.

"They cut a deal with American, and all of a sudden they will be exchanging revenue with American, which is a big deal at JFK," Hula said. "As for Logan, they have a strong balance sheet and they've been able to negotiate for real estate

gates and facilities."

Meanwhile, at National, Rederer said that "nobody else is making a big push, except for US Airways and Jet Blue. Everybody else just wants a little bit, mainly to fly to their hubs."

Expanding in the Northeast is a wise strategy, Rederer noted. "The highest population density in the country is in the Northeast corridor," he said. "It shows how dynamic the airline industry is; that in some of the airports in the country that are the hardest to get into, like National and Kennedy, JetBlue has engineered a series of plans that gives it access to both, all in a remarkably short period of time."

-- Written by Ted Reed in Charlotte, N.C.