JetBlue’s CEO has pushed back on creditor fears, bets on premium

JetBlue Airways executives have sought to calm investors after shares in the airline hit a record low following a report that bondholders had contracted restructuring advisors. “We have no intention, no plans to file for bankruptcy. We are not engaged with any restructuring company,” CEO Joanna Geraghty told CNBC in an interview last month.

Shares have bounced back and are up 40% so far this month as of Tuesday’s close.

Geraghty has said the company is focused on its turnaround plan. A major part of that strategy is the airline betting on the premium travel boom to make it profitable again. It will start the next chapter of the effort on Wednesday, when it unveils its new domestic first-class seats at its home hub at John F. Kennedy International Airport.

JetBlue announced it would offer a domestic first class — BlueFirst — in December 2024 and plans to start flying aircraft with the new seats and full on-board product next month. Retrofits will continue during 2027, Geraghty told CNBC late last month.

BlueFirst is different from the lie-flat, longer-haul business class, Mint, that JetBlue offers on transcontinental and Europe routes. The carrier plans to offer BlueFirst on flights on popular leisure routes throughout Florida and the Caribbean.

The New York airline last posted a profit in 2019, before the pandemic. JetBlue is betting that resilient travel demand, especially for roomier seats, will help fuel its turnaround plan, which aims to get the carrier to an operating profit next year and $1 in adjusted earnings per share in 2028.

The company reported it ended the third quarter with $2.2 billion in liquidity and that its unencumbered asset base is now $7 billion, including $2.8 billion in aircraft and engines.

JetBlue had total debt of $8.4 billion as of Sept. 30, the carrier said in its earnings filing.

Geraghty told CNBC last month there is a “fundamental disconnect between the narrative in the bond market and what our financial results actually demonstrate.”

When asked last month about whether JetBlue’s eye on keeping costs down includes furloughs, layoffs or buyouts, Geraghty said “absolutely not.”

JetBlue shares are still down 12% so far this year. Deutsche Bank upgraded the airline last week, citing airlines’ conservative growth and a focus on yields versus filling planes.

Airlines large and small are racing to outfit their cabins with roomier, more expensive seating options to help cover ever-higher costs, from jet fuel to labor to airport operation fees.

For example, a ticket in the new JetBlue recliner first-class seats between Kennedy Airport and Fort Lauderdale-Hollywood International Airport in Florida is going for $847 roundtrip in the first week of March, while standard economy is $446.

On Tuesday, budget carrier Frontier Airlines also unveiled its new first class seats, which will take up the first two rows, and said it would outfit its Airbus fleet with premium seats that have extra legroom and in-seat power through row eight. The airline will take out a row of seating on its planes to make the pricier ones fit, Chief Marketing Officer Bobby Schroeter told CNBC in an interview.