JetBlue Airways (JBLU 1.57%) took to the sky in 2000 to great fanfare, offering a modernized take on the flying experience that blended the pricing of a discounter with some of the frills and perks associated with full-service airlines.

But JetBlue is at a crossroads today. The airline enjoyed a period of overwhelming demand following the height of the COVID-19 pandemic, but the shares are down nearly 80% from their 2021 highs as investor concerns about the economy grow.

JetBlue's plan for growth, a $3.8 billion acquisition of what is now Spirit Aviation Holdings, was blocked by regulators. A separate partnership with American Airlines Group to feed traffic to JetBlue was also shot down due to antitrust concerns.

If you are wondering if now is the time to buy into JetBlue, read on for a look at the bull and bear cases from two Motley Fool contributors.

Image source: JetBlue Airways.

Bull: Deep value opportunity

Lee Samaha: JetBlue is not a stock that will suit most investors, so if you are most investors, read no further! However, it might fit a specific speculative investor with a penchant for deep value stocks. The airline is loss-making, cash outflowing, and flying into the turbulence of an uncertain trading environment.

That said, there is a case for buying the stock. The downside is protected by the fact that the stock trades at a discount to its tangible book value, and there's potential upside from a possible takeover of the company.

As of the end of the first quarter, JetBlue had $17.1 billion in total assets. Stripping out intangible assets of $399 million leaves $16.7 billion. Taking out the $14.7 billion in total liabilities leaves about $2.05 billion in net tangible assets. Its market cap at the time of writing is $1.58 billion, so it trades at a significant discount to its net tangible assets, which include ownership of 254 Airbus planes (including 47 newer neo airplanes) and 10 Embraer airplanes.

Given Airbus and Boeing's difficulty in ramping up deliveries, those assets might prove extra attractive in the current environment. In addition, JetBlue's loyalty programs and co-branded credit cards could be integrated into a potential acquirer's portfolio.

After JetBlue's intended partnership with American collapsed after an antitrust lawsuit under the Biden administration, JetBlue is widely reported to be looking at a partnership with United Airlines Holdings, and JetBlue's management expects to make an announcement "regarding a domestic airline partnership" (without naming United Airlines) within the second quarter of 2025.

While that partnership doesn't mean a merger can or will occur anytime soon, it could help JetBlue improve its operations and work toward a possible merger. That might make sense for JetBlue's intended partner.

Bear: No easy way through this turbulence

Lou Whiteman: JetBlue is stuck between a rock and a hard place. If airline industry history is any guide, there is no easy way out of that jam.

JetBlue lacks the route network to compete with the giants who control nearly 80% of the domestic market, but its costs are too high to compete with scrappy discounters. Excluding fuel, JetBlue spent $0.1145 per seat per mile in the first quarter. By comparison, discounter Frontier Group Holdings spent $0.07.

Management is doing what it can to bring down costs but bridging that divide will not be easy. And with the Spirit deal now off the table and an industrywide shortage of pilots and aircraft, there is no obvious path for the company to grow its way out of its predicament.

JetBlue's debt is nearly 5 times the value of its equity. That's the highest ratio in the industry, and American is the only other airline with more than 1.2 times debt to equity. The airline was not profitable in its most recent quarter, and the whole industry could be flying into headwinds from here if inflation accelerates and the economy slows.

JetBlue appears to be circling in the same pattern as one-time industry stalwarts like TWA and Eastern Airlines. Although there is no immediate threat of bankruptcy, there is also no obvious catalyst to get the stock moving upward. The rumored partnership or merger with United would take years to play out, and a deal would likely only happen on terms very favorable to United.

Until JetBlue can articulate a clear path toward sustained profitability, investors would be wise to avoid boarding this airline stock.