Fast Money

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Fast Money

No. 2 - JetBlue's New Flight Plan

JetBlue (JBLU) posted a $22 million dollar loss and lowered its 2007 forecast for a third time since a February ice storm left some passengers stranded for as many as 10 hours. Will shares of Jet Blue ever take off?

Jet Blue Chief Executive David Neeleman joins the conversation on the Fast Line to explain his company’s new flight plan.

Dylan Ratigan says the chart tells the story. The stock is down 25% with the bulk of the declines coming during that customer service debacle two months ago

Dylan asks if the worst is over.

Neeleman says the ice storm was a one time event. The company's recent $41 million dollar loss stems from the free travel JetBlue gave customers to compensate them for the February delays.

Have you managed the customer relations problem that happened in February, asks Dylan.

Neeleman says the company has learned lessons and implement changes including hiring a new COO.

Eric Bolling wants to know how JetBlue is hedged for fuel.

Neeleman explains the decline in his stock price is inversely related to the increase in the cost of crude oil. And he tells Eric he’s hedged 64% in 2Q, 35% in 3Q and 25% in 4Q.

Jeff Macke asks if the company has to spend more money to communicate with its customers.

Neeleman says the company is relying on technology to handle communications more effectively.  Within the next few days, he says, if a passenger is on a flight that’s canceled last minute – they will be notified electronically and they will also be able to go on the website and make changes immediately. 

Jeff is a fan of Neeleman. Tim Strazzini says when the stock was at $12 he was interested in buying it, but right now there are headwinds. Guy Adami says the stock trades at 14 times forward earnings. It’s not a cheap stock. Eric says jet fuel is up 25% and it’s a huge problem for all the airlines.

Questions? Comments?

Trader disclosure:
On APR 24, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Strazzini Owns (JBLU), (SNDK), (T)
Bolling Owns (XOM), Gold, Silver, Corn, Natural Gas, Is Short Soybeans