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Module 3: Market Multiple Valuation Regional Airlines - jetBlue

Module 3: Market Multiple Valuation Regional Airlines - jetBlue. Michelle Kelly. Background. Low Budget Airline Modeled after Southwest Difference: jetBlue aims to be low cost but high quality . Headquartered in Queens, NY Major Airport: JFK Market Share: 5.1%

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Module 3: Market Multiple Valuation Regional Airlines - jetBlue

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  1. Module 3: Market Multiple ValuationRegional Airlines - jetBlue Michelle Kelly

  2. Background • Low Budget Airline • Modeled after Southwest • Difference: jetBlue aims to be low cost but high quality. • Headquartered in Queens, NY • Major Airport: JFK • Market Share: 5.1% • Serve 84 destinations in 24 states

  3. NEA Multiple

  4. EPAT Multiple – With Delta

  5. EPAT Multiple – Without Delta

  6. NI Multiple – With Delta

  7. NI Multiple – Without Delta

  8. Book Value Multiple

  9. Comprehensive Income Multiple

  10. Industry Multiple-Available Seat Miles • Available Seat Miles is measure of an airplane's carrying capacity available to generate revenue. • Measures how many miles are actually available for purchase on an airline. • Calculated by multiplying the available seats for a given plane by the number of miles that plane will be flying for a given flight. • Tied to a value driver of the industry and therefore is more useful in measuring future performance and profitability.

  11. Available Seat Miles Multiple

  12. Average Equity Value – with NEA Based on 24/1/14 Stock Price of $8.86, the stock is undervalued and therefore the recommendation would be to buy

  13. Average Equity Value – without NEA Based on 24/1/14 Stock Price of $8.86, the stock is slightly undervalued and therefore the recommendation would be to buy/hold.

  14. Questions?

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