(Oct 28): JetBlue Airways Corp reassured Wall Street that it’ll be profitable next year, as the debt-laden carrier seeks to overcome persistent losses and high oil prices to prevent a deeper restructuring.
Chief executive officer Joanna Geraghty reaffirmed the company’s confidence in achieving operating profitability in 2027 and delivering at least US$1 (RM4.08) earnings per share and positive free cash flow in 2028 in its third-quarter (3Q) earnings report.
“Despite significant fuel headwinds and a challenging summer operation, our revenue performance is among the strongest in the industry,” Geraghty told analysts on a conference call on Tuesday. She added that JetBlue has “multiple avenues” to strengthen liquidity to bridge the carrier to 2028, such as aircraft financing.
JetBlue rose 20% to US$2.86 as of 11am New York time, with other US major carriers seeing fractional or single-digit gains. The stock had sunk to its lowest level on record on Monday before the earnings report was released, sliding by as much as 18%.
The results underscore how soaring jet fuel prices are eating into airline profits despite resilient demand for travel. JetBlue’s more profitable rivals — such as Delta Air Lines Inc, American Airlines Group Inc and Southwest Airlines Co — all cut their profit outlooks in recent weeks. That signalled that even carriers better insulated from war-related spikes are being squeezed.
The future outlook is a rare bright spot for the New York-based carrier this quarter. JetBlue anticipates a negative operating margin of 4.5% to 6.5% for 2026, compared with the average analyst estimates for a loss of 5.8%, according to data compiled by Bloomberg. It had previously guided for an operating margin loss of 2% to 5% for the full year. The metric represents the percentage of revenue left over after paying operating costs.
The company reported an adjusted 3Q loss of 60 cents a share, missing Wall Street estimates for a loss of 55 cents a share.
The report comes at a critical moment for JetBlue, which is saddled with roughly US$9 billion in debt. A group of creditors, including holders of US$2 billion in bonds due 2031 and a US$742 million first-lien loan, was working with restructuring advisers PJT Partners and Akin Gump Strauss Hauer & Feld. Wall Street has been watching JetBlue closely ever since Spirit Airlines shut down earlier this year.
“Debt investors continue to price in a default on its loyalty-backed debt and its convert,” TD Securities analyst Tom Fitzgerald wrote in an Oct 26 note to clients. “Credit investors expressed concern that incremental financings are akin to ‘robbing Peter to pay Paul.’”
Geraghty told analysts “there’s a significant disconnect” between the narrative in the bond market and what JetBlue’s financial results are demonstrating. The conference call ended abruptly after a technical issue.
JetBlue also faces elevated costs and intense competition. The airline has posted six consecutive years of operating losses. The last profitable year on an operating basis was 2019, when operating income was about US$800 million.
“Guidance is for an inflection in free cash flow at the end of 2027, though the company will need to reduce burn significantly prior to that target,” George Ferguson, a Bloomberg Intelligence senior industry analyst, said in a research note on Monday. “Its outlook for 4Q appears challenging.”
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