Shares in JetBlue Airways (JBLU) soared higher today despite being accused in court of taking part in a ‘digital rat race’ and using customers’ personal data to set ticket prices.
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Class Action Lawsuit
The proposed class action lawsuit against the firm came after its response to a social media post raised concerns that JetBlue employed “surveillance pricing” to ramp up customer costs. According to the complaint filed in a Brooklyn federal court, JetBlue conceals its use of “trackers” to set prices dynamically, and shares data with third parties whose programs help it decide when to raise fares.
This activity lets companies use browsing histories, locations and other personal data to set individual prices.
“Consumers should not have to have their privacy rights violated to participate in [JetBlue’s] digital rat race for airline tickets which should cost the same for each similarly seated passenger,” the plaintiff, Andrew Phillips, said in the complaint.
JetBlue did not comment on the lawsuit but did say that it does not use personal data or artificial intelligence to set ticket prices. Surveillance pricing lets companies use browsing histories, locations and other personal data to set individual prices.
Social Media Exchange
The lawsuit came off the back of an exchange earlier this month on the social media site X, where a passenger praised JetBlue but added that a “$230 increase on a ticket after one day is crazy. I’m just trying to make it to a funeral.”
JetBlue said the passenger should try “clearing your cache and cookies or booking with an incognito window. We’re sorry for your loss.”
JetBlue later said its response was incorrect, adding that “fares can change at any moment as seats are purchased or as inventory is adjusted based on demand.”
It comes at a difficult time for the airline industry hit by both faltering consumer confidence and the hike in jet fuel prices as a result of the disruption caused by the Iran war.
In recent weeks there has been rampant speculation that JetBlue could face bankruptcy due to its strained finances.
However, it recently rebutted that speculation, stating in an internal memo leaked to the media that JetBlue maintains sufficient liquidity and has access to additional capital.
Is JBLU a Good Stock to Buy Now?
On TipRanks, JBLU has a Hold consensus based on 1 Buy, 7 Hold and 3 Sell ratings. Its highest price target is $8. JBLU stock’s consensus price target is $5.22, implying a 0.03% downside.
