JetBlue Stock Soars: Here’s Why Traders Are Piling In

JetBlue shares just caught a tailwind—and the charts are flashing green. Here's what's fueling the rally.

Fuel Dump: Lower Costs Ignite the Engines

Operational efficiencies—not hype—are driving this climb. JetBlue's cost-cutting maneuvers finally hit cruising altitude.

Short Squeeze Sends Bears Scrambling

Hedge funds betting against the airline got burned as positive earnings sparked a stampede to cover positions. Classic Wall Street face-plant.

The Cynical Take

Let's see how long this lasts before the next 'unforeseen headwind' tanks the stock. Airlines love a good volatility story.

Image source: JetBlue.

Demand fuels beat

JetBlue has been flying into headwinds of late. The airline has neither the size and scale to compete with the industry's largest players, nor the cost structure to match discounters.

JetBlue lost $0.16 per share in the second quarter on revenue of $2.4 billion, topping Wall Street's forecast for a $0.33-per-share loss on $2.3 billion in revenue. Revenue was up thanks to strong demand during peak periods, including Easter and Memorial Day, as well as success selling premium services like cabin upgrades.

"Demand for air travel improved as the quarter progressed, resulting in significant strength for bookings within 14-days of travel, as well as for peak travel periods," company president Marty St. George said in a statement. "We are encouraged to see that momentum carry into July and we are optimistic that demand will continue to improve through the end of the year."

JetBlue is also making progress setting up its new "Blue Sky" alliance with, and said it expects to realize about $300 million of its nearly $900 million in restructuring plans by year-end.

Is JetBlue a buy?

JetBlue is doing better than some had feared, but the airline remains in a tough position. The company can shrink its way toward profitability for now, but for long-term focused investors there is still the question of where growth will come from.

If nothing else, the results suggest that JetBlue is in no immediate danger and that management's plan to transform the business is going as scheduled. That's reason for Optimism among current holders, but new investors should remain cautious when considering JetBlue.