JetBlue Airways' initial public offering hit the New York markets in a big way, also helping to spark interest in the round of regional airline flotations set for this spring. The first of these, the Continental Airlines ExpressJet flotation, has already performed strongly.

JetBlue drew more subscribers than it had shares to sell, rising 67% in its first day. JetBlue's offering on the NASDAQ brought in $158.5 million, giving the public about 14% of the two-year-old carrier. It became the first US airline to go public since Midway Airlines made its debut in 1997. Unlike the now struggling and bankrupt Midway, JetBlue is widely seen as solidly profitable, posting earnings of $38.5 million last year. It will use the cash raised to help fund a tripling of its fleet from 24 to 83 Airbus A320s over the next five years.

Some scepticism comes from David Menlo of ipo.financial.com, an expert on new stock issues. He says it would be "a dangerous precedent if people believe that they are setting off a new hot sector. JetBlue is unique and is just the first leg of a long evolution." But noted airline securities analyst Julius Maldutis responds: "When observers ask how long can JetBlue keep growing, I answer, for a long time. I once thought that Southwest's growth would be limited, but was wrong. The market is making a clear-cut distinction between those with revenue growth and those without."

ExpressJet, which holds Continental Express, came to market at $480 million and is to be followed by two other regional issues: Republic (formerly Chautauqua) and Pinnacle (the Express I Airlink unit of Northwest Airlines).

Source: Airline Business