Lufthansa to Make Equity Investment in JetBlue; Will Buy Up to 19% Stake

[DAL767-400ER]

Talk about a move that came out of the blue :
http://biz.yahoo.com/pz/071213/133023.html

NEW YORK and FRANKFURT, Germany, Dec. 13, 2007 (PRIME NEWSWIRE) -- JetBlue Airways Corporation (NasdaqGS:JBLU - News) 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.

Doubt fellow Star Alliance members UA and US are too happy about this move.

[ATrude777]

Will this have any effect on the codesharing with Aer Lingus?

Alex

[FlyingPhotog]

Shoot I was thinking LH would have made a nice codeshare partner with WN.

[DAL767-400ER]

Doubt it. A 19% share is not enough for LH to really influence decisions at B6, thus their codesharing with EI will continue.

[AA 1818]

I guess now is the perfect time to invest. The stocks are trading lower than they have been in the past. I hope that with this investment we can see a change at JetBlue. Don't get me wrong, they are a great airline, but with the recent management changes, and with the delaying of aircraft arrivals (from Airbus and Embraer) I am beginning to wonder if they are in trouble. I wonder how this will affect the way that JetBlue associates/interacts with other airlines. Maybe more interline agreements? Maybe more alliance/codeshare talks? Maybe a merger in the future?

[TAP-A343]

Doubt fellow Star Alliance members UA and US are too happy about this move.

For the moment, this is referred to as just a financial investment.

Regards.

[MaxPower]

Doubt it. A 19% share is not enough for LH to really influence decisions at B6, thus their codesharing with EI will continue.

How many percents will LH have to buy before they are allowed to put LH-boardmembers in the "Jetblu round table" ??

[ATrude777]

Definetly expect an entrance to Star Alliance.

Would provide perfect connections domestically and intl between LH and B6.

As stated, both airlines are seeking further cooperation!

Alex