Lufthansa to Buy Stake in JetBlue

[AKAAB]

Lufthansa in talks to buy minority stake in JetBlue -- NYT
Marketwatch - December 13, 2007 1:12 PM ET


SAN FRANCISCO (MarketWatch) -- Deutsche Lufthansa is in talks to buy a nearly 25% stake in JetBlue Airways Group, Inc. , according to people briefed on the matter, said the New York Times on its Web site. The report said the announcement could be as made as soon as Thursday afternoon following the close of stock trading. JetBlue Airways shares, down over 4% in earlier trading, surged nearly 24% to $7.71.

 

[chimichanga]

Does that mean they'll be switching to brown shirts?

 

[zkmayo]

It means good beer on the airplane & therefore on our overnights

 

[Rez O. Lewshun]

LIDO for JB!!!

 

[720persecond]

Lufthansa runs a tight ship. Good news for JB. German efficiency is second to none.

 

[luckytohaveajob]

The purpose Lufthansa is buying now is because the need to connect new international feed as a result of open skies starting in March 08. The international gateway cities are going to be bypassed.

Lufthansa in talks to buy minority stake in JetBlue -- NYT
Marketwatch - December 13, 2007 1:12 PM ET


SAN FRANCISCO (MarketWatch) -- Deutsche Lufthansa is in talks to buy a nearly 25% stake in JetBlue Airways Group, Inc. , according to people briefed on the matter, said the New York Times on its Web site. The report said the announcement could be as made as soon as Thursday afternoon following the close of stock trading. JetBlue Airways shares, down over 4% in earlier trading, surged nearly 24% to $7.71.

 

[luckytohaveajob]

Plus no need to deal with ALPA.

 

[cbeyw]

Its a Deal!

Lufthansa to Make Equity Investment in JetBlue; Will Buy Up to 19% Stake For $7.27 Per Share

December 13, 2007: 03:05 PM EST


NEW YORK and FRANKFURT, Germany, Dec. 13, 2007 (PRIME NEWSWIRE) -- JetBlue Airways Corporation (Nasdaq:JBLU) and Deutsche Lufthansa AG (Xetra:WKN 823212) today announced an agreement for Lufthansa to make a minority equity investment in JetBlue. This transaction represents the first significant investment by a European air carrier in a U.S. point-to-point air carrier.
Under the terms of the agreement, which has been approved by the Boards of both companies, Lufthansa will purchase in a private placement approximately 42 million newly issued common shares of JetBlue, or 19% of JetBlue's equity after giving effect to the issuance. Lufthansa is acquiring the shares at a price of $7.27 per share, or a total of approximately $300 million, representing approximately a 16% premium to yesterday's closing price of $6.25.
The agreement provides that a Lufthansa nominee will be appointed to the Board of Directors upon the closing of the transaction. The Lufthansa nominee will be a Class II director and will be up for election at JetBlue's annual meeting in 2008.
"We are very pleased to become an investor in JetBlue," said Lufthansa Group Chairman and Chief Executive Officer Wolfgang Mayrhuber. "Our investment reflects the confidence we have in JetBlue's quality, growth potential and management team. This investment presents Lufthansa with a compelling opportunity to invest in the U.S. point-to-point carrier market as the industry continues to evolve. The transaction links two airlines with international reputations for quality, innovation and a service culture."
"We welcome this significant endorsement of JetBlue's franchise from one of the most respected leaders in global aviation," said Dave Barger, JetBlue's CEO. "The agreement reaffirms our belief in JetBlue's disciplined growth plan and will also improve our balance sheet and give us greater financial flexibility as we move into 2008."
Both airlines also look forward to exploring potential opportunities for further cooperation for the benefit of their customers. No specific areas of potential cooperation have been agreed upon.
JetBlue shareholder approval is not required in connection with the transaction, which is subject to regulatory review and approval, and is expected to close in the first quarter of 2008.

 

[BLUE BAYOU]

It's a done deal folks. According to Dave Barger's memo just minutes ago-- Lufthansa has agreed to purchase a 19% stake into Jetblue worth about $300 million. The purchase improves Jetblue's financial sheet and will allow for global expansion for both companies. Lufthansa would also get one seat on the board of directors...

 

[Schwanker]

Helps the stock price a little

Jet Blue's stock price was below $6 this morning--I believe an all time low. JB stock had lost over 80% of its value since fall of 03. This news bumped the price as I just saw it over $7 and hit a days high over $8.

How does this impact the pilots and their contracts? I've met a few JB pilots who told me they'd make millions just from the stock/stock options they were granted. I'm thinking the current stock price may have dampened those plans, but I'm not real clear what they were issued. Any insight?

 

[lowecur]

More will be known after CC at 4:30. My guess is this should infuse $250+M into their pocketbook with a 19% stake @$7.27 per share.

Extra liquidity should help them through the coming recession and allow them to cherry pick some nice new stations as M&A will undoubtedly get underway in the next 24 months. Delivery schedule will hopefully remain unchanged, and could increase as opportunities present themselves.

It will be interesting to see if the port authority allows Jetblue to open a customs facility in their new terminal. That would certainly be quite a coup for LH and allow their pax access to connections in this beautiful new terminal. With restrictions coming to JFK, will B6 be allowed to exchange some of their slots to LH to open up large gateway to Europe?

All interesting theories that we may get some answers to in about an hour.

imp:​

 

[Rez O. Lewshun]

So much for the Maxjet factor?

 

[FlyAuburn]

Jet Blue's stock price was below $6 this morning--I believe an all time low. JB stock had lost over 80% of its value since fall of 03. This news bumped the price as I just saw it over $7 and hit a days high over $8.

How does this impact the pilots and their contracts? I've met a few JB pilots who told me they'd make millions just from the stock/stock options they were granted. I'm thinking the current stock price may have dampened those plans, but I'm not real clear what they were issued. Any insight?

1.Our 5 year contract - no issue there.
2. Our stock options: the stock price would have to go way up for most of us to make money. My price is around 11.80, I am making money after that - 9,000 times anything after 11.80. I know some guys that are much higher. So I seriously doubt that any pilot will make millions.

LH group made 30 billion dollars last year. It can't be that bad associating yourself with people that know how to make money.

 

[clickclickboom]

Great News There has been so much speculation here regarding new moves.. It is nice to see a real allinace with a huge entity like LH.. Some good news for the jb guys and gals. I heard that LH wants feed to a minimum of 100 cities within the next 36 months that will give us possibly 15 new cities per year and a real route system.

Please pay me in Euros so i can get a 48% pay raise!!!

 

[maxblast72]

LH group made 30 billion dollars last year. It can't be that bad associating yourself with people that know how to make money.

You never know for sure how this is going to work out. I will give you one example where it wasn't beneficial for a US carrier.

USAir in early 1990's was hurting and British Airways stepped in with some cash to help USAir avoid bankruptcy. They codeshared on flights in and out of the USAir hubs (PIT, PHL, CLT). However, listening to Steven Wolf at a roadshow soon after he came to USAir, he stated that he would end the USAir/British Airways codeshare quickly since British Airways was getting all the benefit (due to the revenue sharing provisions tied to the help USAir had received earlier).

The point is, wait until all the details are out before deciding whether or not this is truly in Jetblue's best interest or Jetblue is getting robbed by a better financially positioned company.

 

[FlyAuburn]

You never know for sure how this is going to work out. I will give you one example where it wasn't beneficial for a US carrier.

USAir in early 1990's was hurting and British Airways stepped in with some cash to help USAir avoid bankruptcy. They codeshared on flights in and out of the USAir hubs (PIT, PHL, CLT). However, listening to Steven Wolf at a roadshow soon after he came to USAir, he stated that he would end the USAir/British Airways codeshare quickly since British Airways was getting all the benefit (due to the revenue sharing provisions tied to the help USAir had received earlier).

The point is, wait until all the details are out before deciding whether or not this is truly in Jetblue's best interest or Jetblue is getting robbed by a better financially positioned company.

Good point. According to Dave Barger, details should be out in the next few days. We'll see...

 

[General Lee]

Well, it is an interesting development. It will mean better credit thanks to a stronger partner like Lufthansa, but it also means you at Jetblue probably will not fly widebody equipment across the Atlantic. Why? Because Lufthansa will handle that for you. With the new Open Skies agreement, Lufthansa can fly from ANYWARE in Europe to ANYWHERE in the US, as long as there are slots and gates available at any of the airports. So, Lufthansa will use you for feed at JFK, BOS, etc, and you will feed them to all of Europe. Regardless, it is good to have rich friends.


Bye Bye--General Lee

 

[Kharma Police]

Lufthansa runs a tight ship. Good news for JB. German efficiency is second to none.

Daimler Chrysler? Oh, how I miss Dr.Z!

 

[stb]

...

It will be interesting to see if the port authority allows Jetblue to open a customs facility in their new terminal. That would certainly be quite a coup for LH and allow their pax access to connections in this beautiful new terminal.

Dont know about a customs at T-5 in JFK but Jetblue has plans for customs at a new T-6 terminal.

 

[Tomct]

You never know for sure how this is going to work out. I will give you one example where it wasn't beneficial for a US carrier.

USAir in early 1990's was hurting and British Airways stepped in with some cash to help USAir avoid bankruptcy. They codeshared on flights in and out of the USAir hubs (PIT, PHL, CLT). However, listening to Steven Wolf at a roadshow soon after he came to USAir, he stated that he would end the USAir/British Airways codeshare quickly since British Airways was getting all the benefit (due to the revenue sharing provisions tied to the help USAir had received earlier).

The point is, wait until all the details are out before deciding whether or not this is truly in Jetblue's best interest or Jetblue is getting robbed by a better financially positioned company.

To compare US mgmnt with JB is pretty sad! That is like comparing apples and oranges. Not even CLOSE! I am sure that their mgmnt (B6) is MUCH SMARTER than the idiot Wolf. Watch and see....