WASHINGTON (Reuters) - JetBlue Airways (JBLU.O) has no plans to get involved in airline merger activity, preferring instead to grow on its own, the company’s chief executive said.
Responding to Southwest Airlines Co’s (LUV.N) plan to buy AirTran Holdings AAI.N, JetBlue CEO Dave Barger said the company growth strategy “has proven to be the right path forward” and would “not be distracted” from its goals.
“Overall, (Southwest) does not change our plans to grow organically, and to focus on growing (Boston) and the Caribbean,” Barger said in a memo to employees that was obtained by Reuters.
“We could easily double our size overnight, but at what cost to our balance sheet, our culture and brand? We’ve worked too hard for those assets,” Barger said.
JetBlue is expanding in Boston and the Caribbean to compete more with bigger rivals, including Southwest, Delta Air Lines (DAL.N) and American Airlines, a unit of AMR Corp AMR.N.
The $1.4 billion Southwest-AirTran deal, the first among healthy major carriers in the low-cost flights business, lifted JetBlue shares sharply on Monday, mainly on speculation that it may view more favorably the prospect of consolidation.
Analysts said its strong presence in New York would make it a key player in any new merger activity. JetBlue is based at New York’s John F. Kennedy International Airport.
JetBlue shares rose 2 percent on Tuesday to lead the sector.
Analysts are also optimistic about the company’s expansion plans and expect a jump in earnings per share through 2011.
Barger said airlines that grow through mergers “may be bigger,” but they’re “also distracted by their own integration issues and they usually take their eye off the customer.”
“This gives us another opportunity to win by playing our game even better” and competing “on our own terms,” he said.
Reporting by John Crawley. Editing by Robert MacMillan