How Would JetBlue's Equity Value Be Impacted If Crude Oil Prices Reach $100 Per Barrel By 2018?

Fuel costs account for one-third of an airline’s total operating expenses. Due to the steep fall in crude oil prices over the last 20 months, the fuel expense of airlines throughout the globe has been reduced significantly, resulting in a notable jump in their earnings. In our base case, we anticipate crude oil prices to recover steadily to $70 per barrel by 2018. However, in case the oil prices recover sooner than expected, and average $100 per barrel in 2018, then we expect a 35% downside to...