JetBlue Airways Corp. flew into turbulence Tuesday, receiving a federal fine for failing to provide reliable on-time flight information and seeing an influential analyst at Goldman Sachs downgrade its stock.
The twin events come at a time when JetBlue, a big flier to and from South Florida, is still trying to restore its image after embarrassing delays at Kennedy International Airport in February that led to broad changes in the airline's management, including the departure of Chief Executive Officer David Neeleman, who founded the Forest Hills, N.Y.-based carrier. Neeleman is now JetBlue's nonexecutive chairman.
Goldman Sachs analyst Robert Barry said in a note to clients that he has stripped JetBlue of its "buy" rating and replaced it with a "neutral" rating. Goldman removed JetBlue from its "America's Buy List."
"We see limited upside in the shares in the next six months," Barry wrote. He said JetBlue faces "growing pressure" on highly competitive cross-country routes. Some of that pressure will come from Virgin America Inc., the start-up airline partly owned by Richard Branson, the British billionaire.
Bryan Baldwin, a JetBlue spokesman, said the airline would have no comment on the analyst's report.
In addition, the U.S. Transportation Department confirmed that it had levied a $30,000 fine against JetBlue "for failing to properly or adequately disclose the on-time performance of specific flights when requested." The DOT requires airlines that submit on-time performance data to disclose any such information to any customer who asks for it.
DOT said its agents "uncovered the lack of compliance in a recent telephone survey," the agency conducted, and JetBlue's failure came "on numerous occasions."
Bill Mosley, a DOT spokesman, said the survey was the first of its kind the agency had conducted, but that it plans similar surveys in the future.In July, JetBlue reported profits rose in the second quarter, compared with the same period last year. But the airline said it plans, at least for the time being, to slow its growth rate. JetBlue said it plans to defer 16 of the new Embraer E-190 airplanes originally scheduled for delivery from 2007 through 2012, to 2013 through 2015.
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