I know there have been chatters around that JB may go out of business (apparently with 37% probability). But I have a contrarian view. Their recent promo 25for25 on the surface may seem like a short term money grabber. But it might be a key to long term sustainability/growth. Those of you not familiar with this promo, just take a look at r/jetblue among other flyer forums and you will be surprised how many people are doing it. The gist of the promo is that you fly to 25 destinations by the end of the year and you get x amount of their mileage points and a status with them for next 25 years. Directly, B6 may lose some money on these flyers (the points one earns roughly offset the amount one spends to acquire them). But imagine this. A person who is sitting on these points, and has a status with the airline, is going to do anything in his/her power to fly with them… for next 25 years. Not just them, their companions who may or may not have the status will likely fly with them too. So, I think it may be the thing that helps JetBlue survive. Third and fourth quarter earnings will give us some data to prove/disprove this theory. Thoughts?
Disclaimer: I'm thinking of doing this 25for25 thing too.
JetBlue promo – A company saver?
byu/newyorkcitydude ininvesting
Posted by newyorkcitydude
1 Comment
I don’t see them going out of business any time soon. I am not an investor but a “airline financial enthusiast”. Out of all the non legacy carriers it’s the one of the best management teams behind it currently and a well diversified product. Worst case someone would swoop in and snatch them up for the real estate alone. Only wild card here is what activist investor Icahn might be up to. The ownership agreement is in B6s favor for the most part but you never know.