Jetblue Airways Ipo Valuation
Running Header: JetBlue Airways IPO Valuation
JetBlue Airways IPO Valuation
Borislav Belenov, Wade Brashear, Jamie Clausen,
Paul Collier, Nicole Hagan and Melissa Lein
Managerial Finance
Chadron State College
Professor Steve Stoner
May 2009
David Neeleman is the founder of JetBlue Airways, which began under the name of “New Air” in 1999. Many JetBlue executives were previously employed by Southwest Airlines, a competitor in the area of low cost travel. However, Mr. Neeleman’s vision was to offer more amenities to its passengers, like in flight entertainment, leather seats, and unsurpassed customer service (Discounting, 2009). His idea was “to launch a new airline that would bring humanity back to air travel (Schill, M. J., et al, 2003, pp. 344).” The employees of JetBlue “strive to make every part of your experience as simple and as pleasant as possible (JetBlue Airways, 2009, para. 1).” David Neeleman began his airline, based out of New York, with a small fleet of new A320 Airbus aircraft. By having new aircrafts, Mr. Neeleman cut down on aircraft mechanical problems, as well as training on the aircraft. Also, low cost was accomplished by having a smaller, more productive workforce, as well as better use of current technology. This saved money for the fledgling company. JetBlue focused on a positive flying experience with point to point full service from the dedicated employees of the company (Schill, M. J., et al, 2003). In April of 2002, JetBlue Airways began trading publicly in the NASDAQ exchange under the ticker symbol of JBLU. The initial public offering, or IPO, for JetBlue was 5.5 million shares of common stock offered for public trading (Schill, M. J., et al, 2003). By late April 2002, JetBlue took delivery on two more aircraft (JetBlue Airways, 2009). This case study describes the process that a company must go through in order to offer common stock for public trade. It also brings up the advantages and disadvantages of being a
JetBlue Airways IPO Valuation
Borislav Belenov, Wade Brashear, Jamie Clausen,
Paul Collier, Nicole Hagan and Melissa Lein
Managerial Finance
Chadron State College
Professor Steve Stoner
May 2009
David Neeleman is the founder of JetBlue Airways, which began under the name of “New Air” in 1999. Many JetBlue executives were previously employed by Southwest Airlines, a competitor in the area of low cost travel. However, Mr. Neeleman’s vision was to offer more amenities to its passengers, like in flight entertainment, leather seats, and unsurpassed customer service (Discounting, 2009). His idea was “to launch a new airline that would bring humanity back to air travel (Schill, M. J., et al, 2003, pp. 344).” The employees of JetBlue “strive to make every part of your experience as simple and as pleasant as possible (JetBlue Airways, 2009, para. 1).” David Neeleman began his airline, based out of New York, with a small fleet of new A320 Airbus aircraft. By having new aircrafts, Mr. Neeleman cut down on aircraft mechanical problems, as well as training on the aircraft. Also, low cost was accomplished by having a smaller, more productive workforce, as well as better use of current technology. This saved money for the fledgling company. JetBlue focused on a positive flying experience with point to point full service from the dedicated employees of the company (Schill, M. J., et al, 2003). In April of 2002, JetBlue Airways began trading publicly in the NASDAQ exchange under the ticker symbol of JBLU. The initial public offering, or IPO, for JetBlue was 5.5 million shares of common stock offered for public trading (Schill, M. J., et al, 2003). By late April 2002, JetBlue took delivery on two more aircraft (JetBlue Airways, 2009). This case study describes the process that a company must go through in order to offer common stock for public trade. It also brings up the advantages and disadvantages of being a
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