Soros Seeing Green in JetBlue?

April 19, 2007
Billionaire investor increases stake in low-cost carrier as airline struggles to rebound from storm meltdown

Investors may see red these days when they think of discount carrier JetBlue Airways Corp., which is still struggling to rebuild its image after a Valentine's Day meltdown that stranded thousands at Kennedy Airport during a snow and ice storm.

But one investor - billionaire George Soros - may be seeing green.

According to a filing with the Securities and Exchange Commission yesterday, Soros, one of the world's best-known investors, increased his stake in the Forest Hills-based carrier to 11.5 percent, from 9.7 percent.

In the filing, Soros revealed that he owned 20.49 million shares in JetBlue, which estimates it lost about $30 million in the storm-related incident at Kennedy.

Soros, however, is still not JetBlue's largest shareholder. That is Fidelity Management, which, according to the latest numbers, holds 26.3 million JetBlue shares, or 14.7 percent of the outstanding stock.

In his SEC filing, Soros did not provide any details as to when he bought the additional shares or why he purchased them.

Soros' action is contrary to that of many investors. Shares of JetBlue have fallen this year, from about $15 at the beginning January to yesterday's close of $11.53.

Ray Neidl, who follows the airline industry for the investment banking firm Calyon Securities of Manhattan, said he shares some of Soros' optimism. "I'm cautiously optimistic" about the airline's future, Neidl said. "But he [Soros] seems to be indicating he is optimistic that they have solved their problems."

Neidl said he does not own the stock.

Robert W. Mann Jr., an independent airline analyst and consultant in Port Washington, said Soros may have increased his stake in JetBlue because he believes there will be further consolidation in the airline industry, which would eventually translate to higher fares and revenue for carriers.

Mann also said Soros may believe a revenue enhancement program instituted several months ago by JetBlue could be successful. Mann said he believes the stock will rise in coming days as a result of Soros' action.

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