JetBlue Airways is facing mounting financial-market pressure after reporting a wider-than-expected third-quarter loss and amid reports that creditors have engaged restructuring advisers. The U.S. airline recorded a net loss of $257 million for the three months ended 30 September, despite a 21% increase in revenue to $2.8 billion. Chief executive Joanna Geraghty said JetBlue is not negotiating with creditors, considering debt restructuring or preparing for bankruptcy.
The concerns followed a sharp sell-off in JetBlue’s debt. Bonds backed by the TrueBlue loyalty programme traded at about 47 cents per dollar on 26 October, down from approximately 80 cents at the start of the month, with yields above 30%. The reported creditor group includes holders of around $2 billion in loyalty-backed bonds and a $742 million first-lien loan; PJT Partners and Akin Gump are reportedly advising them.
JetBlue ended September with about $2.2 billion in liquidity, including an undrawn $600 million credit facility, and approximately $7 billion in unencumbered assets. It expects to raise a further $250 million through aircraft-backed financing later this year. However, fuel expense rose 61% to $868 million in the third quarter, while the airline used $273 million more cash than it generated from operations during the first nine months.
JetBlue is maintaining its target of operating profitability in 2027, followed by positive free cash flow and at least $1 in earnings per share in 2028. The carrier has not reported an annual profit since 2019 and has about $8.4 billion in debt and finance-lease obligations.