Dec. 14 (Bloomberg) -- Deutsche Lufthansa AG Chief Executive Officer Wolfgang Mayrhuber said he has bigger plans beyond a financial investment in JetBlue Airways Corp. and hopes to access the discount carrier's ``humongous'' U.S. network.

JetBlue's sale of a 19 percent stake to Europe's second- largest airline has ``great strategic impetus for both companies,'' Mayrhuber said in an interview in Frankfurt today, a day after JetBlue called the deal ``strictly financial.''

``They're a premium product supplier,'' Mayrhuber said. ``They have a stronghold along the East Coast that we wouldn't find elsewhere, and they're very complementary to our routes and our alliance partners.''

Mayrhuber's comments fleshed out how Cologne, Germany-based Lufthansa views the purchase, which was announced yesterday after regular business hours in Europe. JetBlue's base is New York's Kennedy airport, where Lufthansa could collect U.S. travelers for trans-Atlantic flights.

For JetBlue, the investment comes after a fivefold surge in net debt over the last four years to $2.17 billion to help finance the fastest expansion of any of the eight largest U.S. airlines, according to data compiled by Bloomberg. JetBlue posted losses in each of the past two years.

`Liquidity Challenges'

``The cash infusion will address JetBlue's near-term, growing liquidity challenges, but does nothing to address mounting cost and revenue pressures,'' William Greene, a New York-based analyst for Morgan Stanley, wrote in a note today.

JetBlue plunged 56 percent this year before yesterday on increased competition from other low-cost carriers, the departure of its chief financial officer, a 53 percent surge in the price of jet fuel and concern that the slowing U.S. economy will damp travel demand.

Lufthansa will pay $7.27 a share for its JetBlue stake, a 16 percent premium to the Dec. 12 closing price. JetBlue will issue 42.6 million new shares for the $309.6 million sale, according to a filing today. Greene said JetBlue's price was ``rich.''

``JetBlue isn't exactly a high-quality company,'' said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt. ``I can't see any positive effect on earnings'' for Lufthansa. The German airline's 2006 sales were about 10 times as much as JetBlue's $2.36 billion.

Financial Review

Mayrhuber said Lufthansa looked ``very closely'' at JetBlue's finances and concluded they were in ``solid'' shape. ``With our capital they can further pay down debt,'' he said. The ``weak U.S. dollar'' against the euro was a benefit for Lufthansa in the investment, he added.

Lufthansa fell 6 cents to 18.30 euros in Frankfurt. JetBlue fell 6 cents to $7.09 at 4 p.m. New York time in Nasdaq Stock Market composite trading, reversing earlier gains.

JetBlue CEO Dave Barger said selling the stake to Lufthansa was a ``short, quick decision'' after the German carrier broached the idea in the ``summer, early fall.''

``The only closure that we've had at this point in time is a financial transaction,'' Barger said today in an interview in Frankfurt. The two eventually will ``explore future opportunities,'' he said.

JetBlue now flies in the U.S. and Caribbean and is the eighth-largest U.S. airline by passenger traffic. By that measure, it is about one-sixth the size of AMR Corp.'s American Airlines, the biggest U.S. carrier.

Board Seat

Along with its new holding, Lufthansa gets one seat on JetBlue's board and may have the right to one more in the event of a board vacancy after one year, though it can't control the U.S. airline's management or policies, according to today's filing. JetBlue gets the right of first refusal for certain share sales by Lufthansa, according to the filing.

The chairman of the U.S. House transportation committee questioned today whether Lufthansa's purchase signals that the carrier is betting the U.S. will ease limits on foreign ownership of U.S. airlines. U.S. law limits foreigners' airline holdings to 49 percent of equity and a 25 percent voting stake.

Still, Representative James Oberstar, a Minnesota Democrat, said in Washington he may ``come out with a position of no objection'' to the deal.

Lufthansa didn't consult with Star Alliance partners United Airlines and US Airways Group Inc. about the JetBlue purchase, Mayrhuber said.

``This is not at all something US Air or United Airlines would have to bother about,'' he said. ``It is something where they have no overlap in their fleet structure or route structure so far.''

To contact the reporters on this story: Susanna Ray in Chicago at sray7@bloomberg.net; Marcel Kolvenbach in Frankfurt at mkolvenbach@bloomberg.net

Last Updated: December 14, 2007 18:10 EST