A group of senior creditors to US airline JetBlue Airways is working with financial adviser PJT Partners and law firm Akin as the carrier faces mounting financial pressure from high fuel costs and concerns over its debt position.
The development, reported on Friday, October 23, comes as rising jet fuel expenses linked to the conflict involving Iran continue to squeeze airline profit margins despite higher airfares and steady demand for air travel.
JetBlue’s bonds came under significant pressure during the week following a recent call with bondholders. The airline’s $2 billion notes due in 2031 fell to about 42 cents on the dollar on Thursday before recovering slightly to the mid-40-cent range on Friday. The bonds had traded near 80 cents earlier in October.
The airline’s financial position has drawn increased attention as it pursues an operational and financial overhaul aimed at reducing costs and expanding its premium travel offerings.
JetBlue reported $1.66 billion in cash and cash equivalents as of June 30, alongside $8.5 billion in debt and finance lease obligations.
Its shares have fallen about 42 per cent this year, reflecting investor concerns over its recovery prospects and rising operating expenses.
JetBlue has maintained that its JetForward strategy is progressing towards sustained profitability. However, the involvement of creditor advisers highlights the financial challenges facing the carrier as it attempts to improve performance amid elevated fuel prices.
The situation also underscores the vulnerability of airlines to prolonged increases in energy costs, which can erode margins and complicate efforts to restore financial stability.
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