David Schepp BBC News Online's North America Business Reporter

Given the prevailing skittishness on Wall Street these days, the idea of floating a new stock issue might seem a huge gamble.

JetBlue is absolutely a profitable niche business

Marc Baum, IPO Group analyst

Many investors are still smarting from stinging losses they experienced after buying into high-flying dot.com stocks that withered to nothing.

Then there are the huge losses experienced by air carriers amid last year's faltering US economy and September terrorist attacks.

So the thought of a newly formed discount airline successfully enticing new investors seems a bit at odds with conventional wisdom.

But not for David Neeleman, chief executive at upstart air-carrier JetBlue, whose success at launching and running new airlines has made his airline's stock flotation one of the most widely anticipated of the year.

Solid business model

After just two years in the game, the Kew Gardens, New York-based firm has turned a profit by keeping an eye on costs while wooing loyal customers who enjoy flying on the cheap.

"Everyone I've talked to that's flown with them has been delighted," says Jim Broadfoot, fund manager for the Ivy Emerging Growth Fund.

JetBlue's Neeleman has launched three airlines

Inviting customer service is key to the success of the airline. US fliers have become all too accustomed to rude personnel and lackadaisical service among most other carriers.

The only other airline to enjoy similar praise by customers has been Dallas-based Southwest Airlines.

JetBlue executives readily admit they copied Southwest's business model because of its success not only in attracting steadfast fliers but also its ability to make money.

"What's important here is that the business model is solid," says Helane Becker, aviation analyst at Buckingham Research Group. "And they aren't deviating from it."

Niche business

That stick-to-itiveness helped propel JetBlue into the black in 2001 - to the tune of $38.5m (�26.8m) - while the rest of the airline industry was mired in billions of dollars worth of losses.

It is also one of the few discount airlines to successfully launch in the northeast US, with a base at New York's John F Kennedy airport.

JetBlue woos fliers with their own satellite TV

Cost savings are at the heart of JetBlue's successful formula. For example, it entices its customers to book tickets online by offering lower fares on the Internet rather than over the telephone.

That helps keep costs down by reducing call-centre staffing and expensive toll-free phone calls. But it also helps the airline offer fares that are 50%-70% lower than its upmarket brethren.

While JetBlue does not serve meals - another nod to cost-cutting - it does offer passengers their own satellite television, an appealing departure from the canned programming available on most US carriers.

Leather seats and spanking-new Airbus 320A aeroplanes are also part of JetBlue's allure. CEO Neeleman believes new planes give his airline instant credibility.

"It's been shown that there's room for niche businesses in this industry," says Marc Baum of financial-data firm IPO Group.

"JetBlue is absolutely a profitable niche business," he says.

'Home run'

That sort of enthusiasm is what has stock watchers betting that JetBlue's revised float price of $25-$26 a share - raised on 10 April from its initial $22-$24 - will still prove to be a bargain.

It is also why its backers, such as George Soros, through his Private Equity Partners Fund, and Weston Presidio stand to make a pretty profit on their investment.

For them, Mr Baum says, "this is probably a home run," despite the common wisdom that says airlines are high-risk investments.

JetBlue, which will trade on the Nasdaq Stock Market under the symbol JBLU, hopes to sell 5.5 million shares of common stock.

Given Wednesday's boost in initial share price, JetBlue stands to take up to $143m.

The money will go into expanding the airline, including the purchase of up to 60 new jetliners over five years to add to its existing 23.

JetBlue was set to first offer its shares in September but because of the terrorist attacks on New York and Washington was postponed.

Waiting in the wings are at least two other airline stock floats. ExpressJet, a regional jet service of Continental Airlines, and Northwest Airlines regional carrier Pinnacle Airlines are expected later this year.