Why JetBlue Airways Corporation (JBLU) Stock Is Flying Higher

What: Shares of  JetBlue Airways Corporation (NASDAQ:JBLU) were flying through the roof today, gaining as much as 5% after the airline launched high-speed Wi-Fi on three of its aircraft.

 JetBlue Airways Corporation (NASDAQ:JBLU)

So what: While in-flight Wi-Fi is nothing new, it is JetBlue Airways Corporation (NASDAQ:JBLU)’s hyped “Ka-band” satellite technology that’s fueling optimism. Through Ka-band, JetBlue promises “real broadband Internet in the sky” and “at-home Internet speeds”. According to JetBlue, Fly Fi – as the service will be known – offers a browsing speed that’s eight times faster than those being currently offered by peer airlines. Fellow Fool Adam Levine-Weinberg considers the in-flight Wi-Fi offered by Southwest Airlines Co. (NYSE:LUV) as the best in the industry, in terms of availability, speed, and cost. JetBlue clearly wants to disconnect Southwest Airlines Co. (NYSE:LUV) from the game.

It’s not a dry launch – you can browse for free (basic email and browsing) on Fly Fi equipped planes through June 2014. And if you are a movie buff, or a download freak, you can access high-bandwidth live streaming by paying $9 an hour for JetBlue Airways Corporation (NASDAQ:JBLU)’s Fly Fi Plus service. Starting with three flights today, JetBlue plans to get two more aircraft under the Wi-Fi services before the year ends, and take the number up to 140 by the end of 2014. While its Airbus fleet will be covered next year, its Embraer fleet will have Fly Fi by 2015.

Now what: Stiff competition has taken a toll on JetBlue Airways Corporation (NASDAQ:JBLU)’s margins in recent times, and premium services like Fly Fi is just one of the tools that the airline wants to use to get more travelers on board. The launch has come at an opportune time, what with the Federal Aviation Administration recently giving the go-ahead to use smartphones and tablets on flights. Elite flyers, who are willing to pay to stay connected up on air, should help JetBlue get some extra revenue.

As one of the last airlines to offer Wi-Fi connectivity, JetBlue Airways Corporation (NASDAQ:JBLU) needs to make sure it lives up to the hype created around Ka-band and Fly Fi. After all, the majority of travelers prefer great in-flight connectivity over legroom, snacks, or even access to the restroom – at least that’s what a recent survey by Honeywell Aerospace concluded. If that holds water, JetBlue’s fortunes could fly with Fly Fi.

Best of all, JetBlue is so confident that it has almost launched an open challenge. “Every traveler using Wi-Fi on JetBlue Airways Corporation (NASDAQ:JBLU) or any other carrier should test their connection with SpeedTest.net, and post their speeds using #WiFiFlightSpeed on social networks. Travelers should be able to see the speeds of all Wi-Fi systems in the sky and make an informed choice,” is what Marty St. George, JetBlue’s senior vice president marketing and commercial strategy, had to say about the service.

Next time I fly a JetBlue plane equipped with Fly Fi, I plan to test it and tweet the results – all while I’m still up there. If my tweet reaches your timeline within a second, I’ll give JetBlue my loyalty.

 

The article Why JetBlue Airways Corporation Stock Is Flying Higher originally appeared on Fool.com.

Fool contributor Neha Chamaria has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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