By Doyinsola Oladipo
NEW YORK, Oct 27 (Reuters) – JetBlue Airways is not in talks with creditors and is not planning to restructure its debt, Chief Executive Joanna Geraghty told Reuters on Tuesday, after a sharp selloff in the airline’s bonds raised concerns about its finances.
Geraghty’s comments come days after a group of creditors hired restructuring advisers PJT Partners and Akin Gump, according to media reports, raising questions about the carrier’s ability to fund a turnaround without having to renegotiate its debt.
The airline, which has about $8.4 billion in debt and finance lease obligations, has not posted an annual profit since 2019 and reported on Monday that its third-quarter net loss deepened to $257 million from $143 million a year earlier primarily due to soaring fuel costs.
“We are not in talks with our creditors,” Geraghty said. “Part of today, as I mentioned, was to really set the record straight that we’re making progress in the underlying business.”
When asked if the airline was pursuing any financial support from the US government, Geraghty said it was not. She also reiterated that debt restructuring was not under consideration.
Separately, Geraghty met with US Commerce Secretary Howard Lutnick last week to discuss a range of issues, according to a person briefed on the matter.
JetBlue declined to comment on whether the meeting occurred. The Commerce Department did not immediately respond to a request for comment.
The company’s roughly $2 billion in bonds backed by its TrueBlue frequent-flyer program were trading at about $47 for every $100 of debt on October 26, down from around $80 at the start of the month, according to LSEG data. The steep drop pushed yields, the returns investors demand for holding the bonds, above 30%, signaling concerns about the airline’s ability to repay its debt because of volatile fuel costs.
Fuel expenses jumped 61% in the third quarter but the company said it was able to recover 87% of that as fares rose across the industry with no meaningful decline in passenger volume. The airline said in its quarterly filing that a 10% rise in fuel prices would increase its fuel costs by about $376 million over the next year, based on its projected fuel consumption.
Revenue in the period rose by more than a fifth to $2.8 billion.
“Our results tell a very different story from what our bondholders are communicating out there in the market,” she said in an interview.
JetBlue stock closed up 19% on Tuesday, but it is down 38% so far this year.
FUNDING THE TURNAROUND
JetBlue used $273 million in cash from operations in the first nine months of 2026, nearly double the $143 million a year earlier. Its unrestricted cash and investments fell about $850 million from December to $1.6 billion at September-end, partly reflecting aircraft purchases, and its working-capital deficit widened to $1.6 billion from $1.2 billion at the end of last year.
The airline faces scheduled debt and finance lease repayments of $477 million in 2027 and $582 million in 2028, before a larger $1.8 billion comes due in 2029, according to its quarterly filing. It paid $372 million in net cash interest in the first nine months of the year.
JetBlue reported $2.2 billion in liquidity and about $7 billion in assets not already pledged to lenders that could help it raise additional funds, and said in the filing it had enough liquidity to meet its needs for at least the next 12 months. About two-thirds of its owned property, equipment and intangible assets by book value were already pledged under various loan agreements.
The company expects another $250 million in aircraft-backed financing in the fourth quarter. On Tuesday’s earnings call, Geraghty identified potential funding sources beyond traditional borrowing, including JetBlue’s Paisly travel business, venture investments and co-branded credit-card partnership, but gave no details of any specific plans.
JetBlue now expects a full-year adjusted operating margin of negative 4.5% to negative 6.5%, worse than the negative 2% to negative 5% forecast in July.
The airline still aims to return to operating profitability in 2027 and generate positive free cash flow in 2028.
(Reporting by Doyinsola Oladipo in New York; Additional reporting by David Shepardson in Washington; Writing by Rajesh Kumar Singh in Chicago; Editing by Nia Williams, Daniel Wallis, Nick Zieminski and Sanjeev Miglani)
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