JetBlue's Senior Creditors Hire Advisors as Bonds Fall to 42 Cents on the Dollar and Fuel Costs Bite
The Wall Street Journal reports a group of JetBlue's senior creditors hired PJT Partners and Akin. Fox Business says that does not necessarily signal bankruptcy. The airline carries about $8.5 billion in debt and lease obligations.
A group of JetBlue Airways' senior creditors has reportedly hired financial and legal advisors as the airline's finances deteriorate, according to Fox Business, which cites the Wall Street Journal.
What was reported. The creditors are working with investment bank PJT Partners and law firm Akin, the Journal said, citing people familiar with the matter. Bloomberg separately reported the group includes holders of $2 billion in bonds and a $742 million secured loan.
The market signal. JetBlue's roughly $2 billion in senior secured notes due 2031 fell to about 42 cents on the dollar Thursday and recovered to the mid-40s Friday. Last month they traded near 80 cents. The Journal says the stock is down about 58 percent since the start of August.
The numbers behind it. JetBlue reported a $247 million net loss in the second quarter, against $74 million a year earlier. Revenue rose 14.5 percent to $2.7 billion, but operating costs rose 20.8 percent. Fuel was the main driver: fuel expense jumped 80.7 percent to $911 million, with the average price at $4.23 a gallon versus $2.40. Fox links the higher jet fuel prices to the Iran war, which it says is squeezing airlines despite strong travel demand. The airline carries about $8.5 billion in debt and finance leases, and had about $2.2 billion in unrestricted cash and investments at the end of June, plus an undrawn $600 million credit line.
The caveat. Fox notes that creditors often hire advisors to weigh options and that such a move does not necessarily mean a bankruptcy or restructuring is coming. In April, CEO Joanna Geraghty told employees JetBlue was not considering bankruptcy in 2026, according to a memo reviewed by Reuters.
Note for readers: we did not read the Journal or Bloomberg reports, and the sources behind them are unnamed. The financial figures in the second half come from JetBlue's second-quarter filing as summarized by Fox Business.