JetBlue Airways Corporation (JBLU) is the only airline stock in the industry to have gained more than 50% in 2015. The stock soared as high as about 65% but then slipped down a little due to the recent downgrades by major analysts. The stock gained 18% during the third quarter of 2015. The broader market, tracked by the S&P 500 ETF Trust (SPY), fell 2% in the same period.
The airline industry, tracked by the Dow Jones US Airline Index (DJUSAR), has gained ~15%. Year-to-date or YTD, the index has fallen by ~3.5%. This is in line with most airline stocks, such as American Airlines (AAL), United Continental (UAL), and Spirit Airlines (SAVE), which fell 14%, 15%, and 44%, respectively. Southwest Airlines (LUV) gained ~4.5% YTD and Alaska gained 26%.
Better unit revenues
Unit revenues across the industry are falling due to pricing pressures and forex headwinds, and JetBlue posted a 1.4% year-over-year growth in its PRASM (passenger revenue per available seat mile) for the second quarter. The company derives 100% of its revenues from the US market.
This route structure enables JetBlue to avoid the foreign currency headwinds experienced by its competitors, allowing it to improve its unit revenues. This advantage should remain a positive for the company, especially in the short term, while other airlines continue to see declines in their PRASM figures.
JetBlue and Alaska Airlines are the only two airline stocks that have seen huge positive gains this year. The rest of the industry has struggled despite having favorable economic factors such as low fuel costs and demand and supply increments.