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A group of JetBlue Airways’ senior creditors has reportedly hired financial and legal advisers as the airline faces growing financial pressure, falling bond prices and rising fuel costs that have complicated turnaround efforts.
The creditors are working with investment bank PJT Partners and law firm Akin, according to the Wall Street Journal, citing people familiar with the matter.
JetBlue’s approximately $2 billion in senior secured notes due in 2031 fell to about 42 cents on the dollar on Thursday before rising to about 40 cents on Friday, the Journal reported. Last month, the bonds were trading at nearly 80 cents.
Bloomberg reported separately that the group of creditors includes the holders of $2 billion in bonds and a $742 million secured loan.
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A JetBlue Airways Airbus A321 aircraft approaches San Diego International Airport for a landing from Boston on April 20, 2025, in San Diego, California. (Kevin Carter/Getty Images)
These developments come as JetBlue struggles to restore profitability while managing about $8.5 billion in debt and finance lease obligations, according to its second-quarter filing with the Securities and Exchange Commission. The airline’s shares have also fallen about 58% since the beginning of August, the Journal reported.
Although creditors sometimes hire advisors to evaluate their options when a borrower is facing financial difficulties, such moves do not necessarily signal impending bankruptcy or debt restructuring.
JetBlue reported a net loss of $247 million in the second quarter, compared to a loss of $74 million a year earlier. Revenue rose 14.5% to $2.7 billion, but operating expenses climbed 20.8%, largely due to higher fuel costs.
JetBlue reported a net loss of $247 million in the second quarter, compared to a loss of $74 million a year earlier. (Beata Zawrzel/NurPhoto via Getty Images)
Spending on jet fuel jumped 80.7% year over year to $911 million, with the average price per gallon increasing from $2.40 to $4.23.
Rising jet fuel prices linked to the war in Iran have put pressure on airlines across the United States, reducing their profit margins despite resilient travel demand and higher airfares.
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In September, JetBlue raised its fuel price estimate for the third quarter to $3.96 from $3.49 per gallon, while increasing its projected non-fuel operating costs. However, the airline raised its revenue outlook, citing strong travel demand and a favorable pricing environment.
These developments come as JetBlue struggles to restore profitability while managing approximately $8.5 billion in debt and finance lease obligations. (Eva Marie Uzcategui/Bloomberg via Getty Images)
JetBlue has sought to shore up its finances, including through a $500 million aircraft-backed financing deal reached in April. As of June 30, the airline reported approximately $2.2 billion in unrestricted cash, cash equivalents and investment securities, as well as an undrawn credit facility of $600 million.
In April, JetBlue CEO Joanna Geraghty told employees that the airline was not considering bankruptcy in 2026, according to an internal memo reviewed by Reuters. She also said JetBlue has ample liquidity and access to additional capital.
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The airline continued its JetForward turnaround strategy, which management said in July had generated $470 million in cumulative additional earnings before interest and taxes through June.
A JetBlue representative told the Journal that the airline remains focused on strengthening its revenue and creating a more profitable business.
JetBlue is scheduled to report its third-quarter results on Tuesday, October 27, giving investors a new look at its financial health and turnaround efforts.
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PJT Partners declined to comment.
FOX Business has contacted JetBlue and Akin for comment.
Reuters contributed to this report.
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