What the Merger Means for the 5th Largest US Airline: US Airways Group, Inc. (LCC)

JetBlue would be a logical buyer of slots from the new AMR. In particular, it is likely that AMR will be forced to give up at least some gate slots of Reagan National in DC because both AMR and US Airways currently have a strong presence at the airport. The addition of key slots could serve as a major catalyst for JetBlue going forward.

JetBlue Shares Underperform

Over the past year, as shown by the chart below, JetBlue has lagged well behind its larger rivals.

JBLU data by YCharts

Conclusion

JetBlue will benefit from the AMR/ US Airways merger in two ways. Firstly, like all other airlines, JetBlue will benefit from increased pricing power resulting from industry consolidation. Additionally, JetBlue is poised to benefit from forced key gate divestitures by AMR. Over the past year, as shown by the chart above, JetBlue has lagged well behind its larger rivals. I would use this relative weakness to buy the, often overlooked, fifth largest U.S. airline, JetBlue ahead of potential benefits from the recently announced AMR/ US Airways merger.

The article What the Merger Means for the 5th Largest US Airline originally appeared on Fool.com and is written by Sammy Pollack.

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