JetBlue (JBLU) shares gained altitude on Tuesday, leaving sky high oil prices and February’s runway debacle back on the tarmac. The new CEO behind the turnaround turns to Fast Money for his first televised interview.
David Barger, named to the top spot at JetBlue this past May, said the company was focused on getting “back to basics,” including slowing its growth plan, reviewing its route network and taking care of its customers and crewmembers.
Fuel makes up about 36% of JBLU’s cost structure, Barger said, but he maintained that the company was 50% hedged, helping it “smooth out the variability of fuel costs.” Some of the higher fuel costs are being passed on to the customer, he said.
Barger also told the traders that he feels confident as winter, and the inevitable flight delays and weather-related problems, approach. The company is prepared to do everything possible to avoid customer service debacles like those occurred over President’s Day Weekend in the Northeast.
But the airline infrastructure in America is still eroding and no one company can control all the external factors. As Jeff Macke put it: “Pretty much every [airline] is surly.”
Jeff reiterated his call to stay away from the airlines. "Anytime the stock market is open is a good time to sell the airlines," he has said. Barger may be a good manager, but the industry is still bordering on unmanageable.
Guy Adami would rather get behind aviation equipment makers like Boeing (BA) or Rockwell Collins (COL). But the huge short interest in JBLU might be a play, he said.
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Trader disclosure: On Oct 23, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (COH), (DIS), (EMC), Najarian Owns (SII), (C), (GOOG), (YHOO), Najarian Owns (AMZN) Options; Finerman Owns (C ), (GS), (BIIB), (BEAS), (MSFT); Finerman's Firm And Finerman Own (TGT); Finerman's Firm Owns (WMT), Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns S&P 500 Puts