(JetBlue story updated with closing stock price and March traffic numbers)NEW YORK ( TheStreet) -- In trying to pick the biggest winners in the current round of airline industry deal-making, JetBlue ( JBLU) 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.
It is important to remember, however, that many observers feel it's more likely that United will merge with Continental ( CAL), 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.