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JetBlue's senior creditors bring in PJT Partners and Akin as the airline's shares and bonds slide, WSJ reports
A senior lender group has hired restructuring advisers, according to the Wall Street Journal, while JetBlue says it remains confident in its JetForward turnaround plan.
HedgeWeekly News Desk ·
A group of JetBlue Airways' senior creditors is working with investment bank PJT Partners and law firm Akin, the Wall Street Journal reported on Friday, citing people familiar with the matter. Reuters, which carried the report, said PJT did not immediately respond to a request for comment. JetBlue said in an emailed statement that it remains confident in its JetForward strategy and in its progress toward sustained profitability.
The report follows a heavy slide in the carrier's securities. Reuters put the share decline at 42% so far this year and said the stock swung in extended trading after the news. The shares had already closed at $2.91 on Tuesday, according to the travel finance site View from the Wing. Earlier in October, the $2 billion of 9.875% bonds due 2031, secured on the TrueBlue loyalty programme, traded at 72 cents on the dollar, their lowest since they were issued in August 2024. Jet fuel costs tied to the Iran war have squeezed margins across US airlines, even with firmer fares and steady demand.
JetBlue's last reported figures show the pressure. The airline lost $247 million in the second quarter on revenue of $2.70 billion, up 14.5% from a year earlier, according to its July 28 earnings release. At June 30 it held $1.66 billion of cash and cash equivalents plus $512 million of investment securities, against $8.48 billion of debt. Its third-quarter guidance assumed fuel at $3.49 a gallon, based on the forward curve as of July 10.
Why it matters: with senior lenders now advised as a group, the terms of the loyalty-backed debt set the pressure points to watch. View from the Wing's review of the financing describes a $750 million quarter-end liquidity minimum, with undrawn revolver capacity counting toward it, and a loyalty debt-service coverage test that rises to 1.75 times from September 2026; failing those tests can send loyalty cash to faster repayment. Scheduled debt and finance-lease payments are $236 million for the rest of 2026 and $478 million in 2027 before rising to $1.835 billion in 2029. For credit funds and equity holders, JetBlue's next quarterly report and any update on liquidity and covenant headroom are the next test.