In Slumping Airline Industry, JetBlue Soars

March 13 -- As the airline industry struggles in the aftermath of Sept. 11, one small start-up is flying high — and hoping that investors come along for the ride.

Low-cost airline JetBlue, which flies to more than 15 destinations across the country and plans to add flights to Puerto Rico in May, filed for a $125 million initial public offering in February.

With its fleet of new, single class Airbus A320 aircraft boasting leather seats and 24 channel satellite television service, industry watchers say the small start-up could be the model for the rest of the industry.

Started in 1999 by David Neeleman, founder of low-fare airline Morris Air before it was acquired by Southwest Airlines in 1994, the company has come a long way in a short period of time.

After securing 75 take-off and landing spots in 1999 at John F. Kennedy Airport, which is now its base of operations, the company launched its first flight to Fort Lauderdale, Fla. in February 2000.

Since then it has quickly ramped up its service, offering low cost fares to metropolitan areas that usually command high ticket prices or popular markets that are under served by the airline industry. Among the carriers' routes include uncommon destinations such as Burlington, Vt. and Syracuse, N.Y.

"There are some airlines that are doing it right. JetBlue is one of them," says transportation expert Richard Gritta, who teaches at the University of Portland, in Portland, Ore.

Growth Amid Slump

Ironically, the airline's strategy benefits from the travel slump, say analysts.

Major airlines have cut back on their flights since Sept. 11, with the industry's passenger capacity down 15 percent in the fourth quarter of last year and U.S. airlines parking some 350 aircraft, according to the Air Transport Association.

And things aren't looking up any time soon. The Federal Aviation Administration says the number of passengers is expected to continue its decline until the fiscal year ending this September.