US Airways Group, Inc. (LCC), Southwest Airlines Co. (LUV), JetBlue Airways Corporation (JBLU): A Trio of US-Based Airlines to Watch

JetBlue Airways Corporation (NASDAQ:JBLU) had poor results in its latest quarter compared to the year ago quarter, mainly due to the economic environment and maintenance cost pressures. Net income reached $36 million, or $0.11 per diluted share, down from $52 million for the second quarter of 2012. The airline boosted traffic by 7.3%, but, as it added flights, it increased passenger-carrying capacity even faster, by 7.8%, raising the number of empty seats.

The company is focused on innovating and expanding, which can contribute to revenue. JetBlue Airways Corporation (NASDAQ:JBLU) is looking forward to offer in-flight entertainment and initiatives such as TrueBlue frequent flier program. In addition, the company is putting special care into its social media strategy to create brand awareness and attract new customers.

Management expressed its focus on growing partnerships with other airlines and we should expect new services in the U.S., the Caribbean, and Latin America scheduled for this year. Further, some new measurements are being executed to lower costs, like a fleet renovation.

The two main concerns for the company are strong competition in the pricing department, and not being able to get the desired level of passenger traffic. Furthermore, the business requires to introduce the latest technology available. So, as mentioned before, operational risks are involved.

My take

US Airways Group, Inc. (NYSE:LCC) is showing constant improvement and the merger with American Airlines has extreme potential. It is yet to be seen if they can combine the two structures and maintain a healthy balance sheet.

Southwest Airlines Co. (NYSE:LUV) looks like a safer investment and the company seems committed to enhance shareholder value. Cash flow and profitability will be key and hence should be monitored.

Finally, being a young company, I believe JetBlue Airways Corporation (NASDAQ:JBLU) might be unprepared to face potential difficulties that may arise in a context of uncertainty. So, I would not recommend buying shares, especially after seeing the underwhelming results for the second quarter.

Louie Grint has no position in any stocks mentioned. The Motley Fool recommends Southwest Airlines.

The article 3 U.S. Based Airlines to Watch originally appeared on Fool.com and is written by Louie Grint.

Louie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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