JetBlue creditors hire advisors as secured bonds sink to 42 cents, notes due 2031 have halved from 80 cents within a month
Chief executive told staff in April the airline was not considering bankruptcy in 2026
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A group of senior JetBlue creditors has hired investment bank PJT Partners and law firm Akin, the Wall Street Journal reported, as the airline's roughly $2 billion of senior secured notes due 2031 fell to about 42 cents on the dollar on Thursday before recovering to the mid-40s on Friday. A month ago the same bonds traded near 80 cents.
The figures behind the slide sit in the airline's own filings. JetBlue is managing about $8.5 billion of debt and finance lease obligations, and its shares have fallen roughly 58 percent since the beginning of August. The second quarter produced a net loss of $247 million, up from $74 million a year earlier, on revenue that rose 14.5 percent to $2.7 billion. Operating expenses climbed 20.8 percent, driven by fuel: aircraft fuel costs surged 80.7 percent to $911 million as the average price per gallon rose from $2.40 to $4.23. Higher jet fuel prices, linked to the Iran war, have pressured carriers across the United States, and in September JetBlue lifted its third-quarter fuel estimate to $3.96 a gallon, from $3.49 — while raising its revenue outlook on strong travel demand and a favorable pricing environment.
The creditor group, according to Bloomberg, includes holders of the $2 billion in bonds and a $742 million secured loan. JetBlue has announced no restructuring; its senior lenders have hired advisors anyway. Management is running its JetForward turnaround, which it says has generated $470 million in cumulative incremental earnings before interest and tax through June. In April, chief executive Joanna Geraghty told employees in an internal memo, reviewed by Reuters, that the airline was not considering bankruptcy in 2026 and had ample liquidity and access to additional capital. As of June 30 it held about $2.2 billion in unrestricted cash and a $600 million undrawn credit facility, having secured $500 million in aircraft-backed financing in April.
The notes due 2031 ended the week in the mid-40-cent range, roughly half their price a month earlier.