JetBlue creditors organize $2.7 billion in holdings as losses widen and liquidity declines
Key Facts
Reuters reported on October 23 that a group of major JetBlue creditors is working with restructuring adviser PJT Partners, a move that coincided with the company’s stock and debt hitting record lows that week, according to Bloomberg. The group includes holders of secured TrueBlue bonds, with a book value of $1.991 billion and maturities through 2031, and lenders under the program-linked term loan facility, which stood at $742 million on September 30, 2026, according to the company’s filing with the U.S. Securities and Exchange Commission. Reuters did not name Akin Gump or disclose the size of the holdings, but the company’s filing shows the scale of debt instruments tied to its loyalty program. The creditors’ move comes as JetBlue shares fell 42% for the year through October 23, while Reuters said higher jet fuel expenses linked to the war in Iran pressured U.S. airlines’ margins. Creditor coordination does not in itself indicate that a formal restructuring has begun, and the chief executive later denied talks with lenders or consideration of a debt restructuring.
Third-quarter results showed revenue growth alongside a widening loss. JetBlue said operating revenue was $2.8 billion, up 21.1% year over year, while operating revenue per available seat mile rose 18.4%. But the average fuel price was $3.91 per gallon, 57% above its level in the same period a year earlier, and the company said it recouped about 87% of the increase in fuel costs. The adjusted loss was 60 cents a share, compared with 40 cents a year earlier, while analysts had expected a loss of 55 cents a share, according to Reuters. On a net basis, the company posted a loss of $257 million in the third quarter, versus $143 million a year earlier, and $823 million in the first nine months, versus $425 million in the same period.
Cash resources have tightened during the year, despite the company reporting available liquidity that includes financing facilities. JetBlue said it ended the third quarter with $2.2 billion in liquidity, including an undrawn $600 million credit facility, and expects an additional $250 million in aircraft-backed financing in the fourth quarter. Reuters reported that cash and cash equivalents fell to $1.26 billion at the end of the quarter from $1.66 billion at midyear, and that cash and investments declined by about $850 million, or a third, since December 2025. The company also used $273 million more than it generated from operations in the first nine months of 2026, compared with cash burn of $143 million in the same period a year earlier. The company said it has about $7 billion in unencumbered assets, including $2.8 billion in aircraft and engines following an updated fleet valuation.
Market pressure was reflected in debt prices and share trading during October. The TrueBlue bond was priced at about $47 per $100 of debt on October 26, down from about $80 at the start of the month, while its yield exceeded 30%, according to Reuters. That same day, JetBlue shares fell nearly 10% at the close, then rose 11% in after-hours trading amid volatility. The moves in the bond and stock show investors are monitoring the company’s ability to finance its operations and meet its obligations as losses mount. Chief Executive Joanna Geraghty said on October 27 that the company “is not in discussions with its creditors,” and Reuters reported that it was not considering a debt restructuring. JetBlue said in a statement that it remains confident in its JetForward strategy and its progress toward restoring sustainable profitability.
Upcoming obligations include $477 million in net debt and finance lease payments in 2027 and $582 million in 2028, followed by $1.835 billion in 2029, according to the company’s filing. In contrast, JetBlue raised its forecast for 2026 operating revenue per available seat mile growth to a range of 13.5%–14.5%, from 10%–12.5% previously, tying the improvement to higher fares and expansion in Fort Lauderdale. The company expects fourth-quarter fuel prices to be 85% higher year over year, but said it expects further expansion in its operating margin during the quarter. JetBlue maintained its target of earning at least $1 per share and generating positive free cash flow in 2028. Those targets, along with the financing expected in the fourth quarter, put the company’s plan to the test as debt maturities increase and fuel costs weigh on it.