55% of JetBlue Lenders Agree to Join Cooperation Agreement
Key Facts
Bloomberg Law reported on November 11 that about 55% of JetBlue lenders had agreed to join a cooperation agreement, a new step toward coordinating creditors’ positions amid financial pressure on the airline. The agreement prevents the company from making side deals with participating lenders, it said. Early participants may receive a premium provision that could give them better recoveries than the rest of the group, according to the report. Bloomberg Law did not disclose the value of the premium. The move follows a Bloomberg report on October 23 that the company’s creditors were organizing with advisers ahead of its third-quarter results.
Cooperation agreements are typically used to bring lenders together around a unified negotiation and may restrict separate agreements with the borrower or its subsidiaries, according to a legal article published by Troutman Pepper Locke. The article says such agreements may be reached at the onset of potential financial distress, even in the absence of ongoing settlement discussions. On October 27, Chief Executive Joanna Geraghty told Reuters that JetBlue was not in talks with creditors and had no plans to restructure its debt. That places the management’s earlier statement alongside a later development in lenders’ organization, without by itself establishing that restructuring negotiations have begun. The company reported on October 26 that it had $2.2 billion in liquidity at the end of the third quarter, including an undrawn $600 million credit facility.
JetBlue’s total debt was about $8.393 billion on September 30, compared with $8.498 billion on December 31, 2025. The company posted a net loss of $257 million in the third quarter of 2026, versus $143 million in the same period a year earlier. Operating revenue was $2.8 billion, up 21.1% year over year. But the company used $273 million in cash from operations during the first nine months of 2026, compared with $143 million in the corresponding period of 2025, according to Reuters. It cut its 2026 adjusted operating margin forecast to a range of negative 4.5% to negative 6.5%, from a range of negative 2% to negative 5% in its July forecast.
Reuters reported on October 26 that JetBlue’s bonds backed by its TrueBlue program were trading at about $47 per $100 of debt, after reaching about $80 at the start of the month, while yields topped 30%. During the same period, the company said it had repaid $658 million of principal and finance lease obligations in the nine months ended September 30. It also said assets with a net book value of $8 billion were pledged as collateral under financing arrangements at the end of the third quarter. JetBlue repaid on April 1 its 2026 convertible notes, with an original principal amount of $325 million, and had no remaining obligations under them. JBLU shares closed at $4 on November 10, compared with $3.94 in the previous session.
Debt and finance lease maturities listed with the U.S. Securities and Exchange Commission show $477 million in 2027 and $582 million in 2028, followed by $1.835 billion in 2029. JetBlue maintained its target of returning to operating profitability in 2027 and generating positive free cash flow in 2028, according to Reuters. On the operational front, the company said its BlueFirst seating service would begin on December 8 on Boston–Fort Lauderdale flights, with other routes to be added in stages. These near and longer-term dates provide context for the company’s operational and financial position as lenders reorganize. The announced December 8 service start remains the first dated operational milestone among the company’s plans.