Is JetBlue going bankrupt? Not yet, and maybe not at all. But the warning signs got a lot louder this week. A group of investors JetBlue owes money to has hired restructuring advisers, according to The Wall Street Journal, and the airline's stock fell to its lowest level since it went public in 2002. If you've got a JetBlue flight booked, or a stash of TrueBlue points, this is what's actually happening, and whether you should still book.
What Happened
A group of investors who lent JetBlue money, including holders of about $2 billion in bonds due in 2031, has brought in the investment bank PJT Partners and the law firm Akin Gump, the Journal reported on Friday. Both are known for working on corporate restructurings.
Investors clearly got nervous. Those 2031 bonds fell to about 42 cents on the dollar on Thursday, down from around 80 cents earlier this month, before recovering slightly. JetBlue's shares dropped nearly 10% on Thursday to close at $2.65, an all-time low.
Investors hiring advisers doesn't mean a bankruptcy filing is coming. It usually means they want to be ready, and to protect their money, if JetBlue has to renegotiate its debts.
How JetBlue Got Here
JetBlue has been losing money for years, and its two big plans to fix that both fell apart in court. A federal judge blocked its merger with Spirit Airlines in 2024 after the Justice Department sued, and its partnership with American Airlines in the Northeast was struck down the year before.
This year added a new problem. Jet fuel prices have roughly doubled since the war with Iran began in late February, and fuel is one of an airline's biggest costs. JetBlue had about $8.5 billion in debt and lease obligations as of June 30, against about $1.66 billion in cash.
The airline told the Journal it remains focused on strengthening its revenue and building a more profitable business. Analysts at UBS said JetBlue still has enough cash to cover its near-term needs.
JetBlue · Debt Trouble
JetBlue Is Under Pressure. Your Flight Isn't
Contrail
What Bankruptcy Would Mean for Travelers
If JetBlue ever did file, it would most likely be Chapter 11, which lets a company keep operating while it reorganizes its debts. That's very different from shutting down.
US airlines have done this many times without grounding their planes. United filed in 2002, Delta and Northwest in 2005 and American in 2011. In each case, flights kept running, tickets were honored and frequent flyer miles survived. That's history, not a promise, but airlines have strong reasons to protect their loyalty programs, since they're among the most valuable things they own.
What You Should Do
- Don't cancel your trip, and don't rule out booking. JetBlue is flying normally, and nothing about this week changes that.
- Pay with a credit card. If an airline ever stops flying, a credit card gives you a much better chance of getting your money back.
- Don't hoard TrueBlue points. That's good advice for any airline, but especially one under financial pressure. Points are worth the most when you use them.
- Watch Tuesday. JetBlue reports its quarterly results on October 27, and that's when the airline will have its chance to explain its plan to investors, and to everyone else.
