In the wake of Lufthansa’s $300
million investment in JetBlue, it’s worth looking at how JetBlue CEO David
Barger is doing after just over six months on the job. If you recall, he replaced
founder David Neeleman in May, mainly
because Neeleman had presided over a severe decline in JetBlue’s share price.
But since then, JBLU shares
have only fallen further: the switch of CEO seems to have made no difference
at all. And even yesterday’s spike upwards on the Lufthansa news barely registers
as a blip on the longer-term chart with its seemingly inexorable downward trend.
But just because the shares are cheap doesn’t mean that the Lufthansa investment
makes any sense: DealBook has a
good round-up of analysts scratching their heads and trying to work out
what on earth Lufthansa might be thinking here. Sure, JetBlue’s landing slots
at JFK are reasonably valuable, but a minority investment in a US domestic carrier
hardly fits in to Lufthansa’s stated strategy, especially since the move is
guaranteed to annoy Lufthansa’s existing US partner, United. Maybe Lufthansa
just wanted to take advantage of the weak dollar, and this was the only US investment
it could find.