A group of senior creditors to JetBlue Airways has reportedly hired financial and legal advisors as the airline faces mounting financial pressure, falling bond prices and rising fuel costs that have complicated turnaround efforts.
The creditors are working with investment bank PJT Partners and law firm Akin, according to The Wall Street Journal, which cited people familiar with the matter.
JetBlue’s roughly $2 billion in senior secured notes due in 2031 fell to approximately 42 cents on the dollar Thursday before recovering to the mid-40-cent range Friday, the Journal reported. Last month the bonds were trading near 80 cents.
Bloomberg separately reported that the creditor group includes holders of the $2 billion in bonds and a $742 million secured loan.
JETMAKER BOMBARDIER DOUBLES DOWN ON US INVESTMENT IN DEAL TOUTED BY TRUMP
The developments come as JetBlue struggles to restore profitability while managing approximately $8.5 billion in debt and finance lease obligations, according to its second-quarter filing with the Securities and Exchange Commission. The airline’s shares have also fallen roughly 58% since the beginning of August, the Journal reported.
While creditors sometimes hire advisors to assess their options when a borrower faces financial difficulties, such moves do not necessarily signal an imminent bankruptcy or debt restructuring.
JetBlue reported a net loss of $247 million in the second quarter, compared with a $74 million loss a year earlier. Revenue rose 14.5% to $2.7 billion, but operating expenses climbed 20.8%, driven largely by higher fuel costs.
Aircraft fuel expenses surged 80.7% year over year to $911 million, with the average price per gallon rising to $4.23 from $2.40.
Higher jet fuel prices linked to the Iran war have pressured airlines across the U.S., squeezing profit margins despite resilient travel demand and higher airfares.
FAA PROPOSES $350K FINE AGAINST CHARTER COMPANY OVER UNAUTHORIZED FLIGHTS
In September, JetBlue raised its third-quarter fuel price estimate to $3.96 per gallon from $3.49 while also increasing its projected nonfuel operating costs. However, the airline raised its revenue outlook, citing strong travel demand and a favorable pricing environment.
JetBlue has sought to shore up its finances, including through a $500 million aircraft-backed financing agreement reached in April. As of June 30, the airline reported approximately $2.2 billion in unrestricted cash, cash equivalents and investment securities, along with a $600 million undrawn credit facility.
In April, JetBlue CEO Joanna Geraghty told employees the airline was not considering bankruptcy in 2026, according to an internal memo reviewed by Reuters. She also said JetBlue had ample liquidity and access to additional capital.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JBLU | NO DATA AVAILABLE | – | – | – |
The airline has continued pursuing its JetForward turnaround strategy, which management said in July had generated $470 million in cumulative incremental earnings before interest and taxes through June.
A JetBlue representative told the Journal that the airline remained focused on strengthening revenue and building a more profitable business.
JetBlue is scheduled to report third-quarter earnings Tuesday, Oct. 27, offering investors a fresh look at its financial health and turnaround efforts.
CLICK HERE TO GET FOX BUSINESS ON THE GO
PJT Partners declined to comment.
FOX Business reached out to JetBlue and Akin for comment.
Reuters contributed to this report.
