JetBlue Airways Corp. (JBLU) , which rocked its competitors by offering cut-rate flights out of New York City, is gearing up to introduce a jet that may again shake up the airline industry.

The 100-seat Embraer 190 (search) regional jet will begin commercial flights in November, allowing JetBlue to expand into new, mid-sized markets from its New York hub and pair comfort with low ticket prices, analysts say.

JetBlue will have seven of the Brazilian-made Embraers in service by the end of the year, and 43 by the end of 2007, giving the No. 2 U.S. airline by market value a second equipment type alongside its larger Airbus 320 jets.

"The 100-seater allows you economics where you can get some low fares out there," JetBlue founder and Chief Executive David Neeleman (search) told Reuters in an interview last week. "They're going to be everywhere."

The airline may serve destinations like Raleigh and Greensboro in North Carolina and Richmond, Va. — cities now serviced by less-comfortable 50-seat regional jets with walk-up fares of up to $700, he said.

Neeleman said JetBlue would offer fares about one third of that price.

"You've got to be pretty excited about that," he said.

Flights linking New York and Boston are also a possibility, especially with the recent brake problems experienced by Amtrak's high-speed Acela trains, Neeleman said.

Analysts agree that the Embraer 190, for which JetBlue was the launch customer, could further boost the airline's advantage over established carriers — expected to lose billions of dollars this year even as JetBlue maintains its unbroken profit streak.

"I think it's going to be a grand slam home run," Ray Neidl, an analyst for Calyon Securities said of the new planes' introduction.

He said they would help JetBlue service smaller markets where it might have trouble filling its existing 156-seat A320s and would lure away passengers uncomfortable in rivals' more cramped 50-seat regional jets.

The two-to-a-side seating on the planes may be particularly attractive to passengers leery of being squeezed into the middle seat in a three-abreast row, he said.

Like JetBlue's A320s, the planes will be equipped with leather seats and in-flight satellite TV and radio.

Still, Neidl rates JetBlue's stock an "add" rather than "buy" — citing its elevated price.

Neeleman expects the airline to be able to turn a profit even if fuel prices surge beyond the records which have slammed other airlines. But energy costs have taken their toll. JetBlue will miss its target operating margin target in the "mid-teens" on a percentage basis, he acknowledged.

JetBlue shares have tumbled from their all-time high of $46.85 and now trade at a little over $20 a share. But the airline still trades at a forward price-to-earnings ratio of 66.8 times — by far the U.S. airline industry's highest.

"The stock right now is a little rich, which is why we don't have our highest rating on it," Neidl said, adding that he still thought there was "value in the stock for the long-term investor."

Jim Corridore, an equity analyst from Standard & Poor's, was also cautious.

"In this current environment where the stock is already priced high, I don't see extra value here," he said.

At the same time, he agreed that the Embraer 190s are "a very smart idea, one which other airlines will look to emulate."