{"version":"1.9","identifier":"6d1e960c-90eb-41e6-b167-4c3f3381569d","language":"en-US","title":"JetBlue's loyalty-backed bonds fell to 42 cents as creditors hired restructuring advisers","layout":{"columns":7,"width":1024,"margin":32,"gutter":20},"componentLayouts":{"text":{"columnStart":0,"columnSpan":7,"maximumContentWidth":720,"margin":{"top":12,"bottom":12}},"photo":{"columnStart":0,"columnSpan":7,"margin":{"top":20,"bottom":20}}},"componentTextStyles":{"default":{"fontName":"HelveticaNeue","fontSize":18,"lineHeight":29,"textColor":"#171717"},"headline":{"fontName":"HelveticaNeue-Bold","fontSize":36,"lineHeight":42,"conditional":[{"conditions":{"maxViewportWidth":480},"fontSize":28,"lineHeight":34}]},"intro":{"fontName":"HelveticaNeue","fontSize":20,"lineHeight":28,"textColor":"#555555"},"caption":{"fontName":"HelveticaNeue","fontSize":13,"lineHeight":19,"textColor":"#666666"},"byline":{"fontName":"HelveticaNeue","fontSize":13,"lineHeight":20,"textColor":"#666666"},"body":{"fontName":"HelveticaNeue","fontSize":18,"lineHeight":29,"paragraphSpacingAfter":14,"linkStyle":{"textColor":"#00704a"}}},"metadata":{"canonicalURL":"https://www.loungefrog.com/news/jetblue-creditors-pjt-akin-loyalty-bonds-42-cents-q3-earnings","datePublished":"2026-10-26T19:11:36.05323Z","dateModified":"2026-10-26T19:14:02.329176Z","authors":["Patrick Karsh"],"excerpt":"JetBlue's senior creditors are working with PJT Partners and Akin, the WSJ reported, ahead of the airline's Oct. 27 earnings call.","thumbnailURL":"https://pub-fac99da959e344fe99d810d309cef7df.r2.dev/photos/article/6d1e960c-90eb-41e6-b167-4c3f3381569d/8ecadfa48fdc9d72e4dd41c1f20e86d9.jpg","keywords":["airline"],"generatorName":"Frog News","generatorVersion":"1.0"},"components":[{"role":"title","text":"JetBlue's loyalty-backed bonds fell to 42 cents as creditors hired restructuring advisers","textStyle":"headline","layout":"text"},{"role":"intro","text":"JetBlue's senior creditors are working with PJT Partners and Akin, the WSJ reported, ahead of the airline's Oct. 27 earnings call.","textStyle":"intro","layout":"text"},{"role":"byline","text":"By Patrick Karsh · Published October 26, 2026","textStyle":"byline","layout":"text"},{"role":"photo","URL":"https://pub-fac99da959e344fe99d810d309cef7df.r2.dev/photos/article/6d1e960c-90eb-41e6-b167-4c3f3381569d/8ecadfa48fdc9d72e4dd41c1f20e86d9.jpg","caption":"JetBlue and United jets side by side, in an image from United Airlines' Blue Sky partnership announcement · United Airlines","accessibilityCaption":"JetBlue and United jets side by side, in an image from United Airlines' Blue Sky partnership announcement","layout":"photo"},{"role":"caption","text":"JetBlue and United jets side by side, in an image from United Airlines' Blue Sky partnership announcement · United Airlines","textStyle":"caption","layout":"text"},{"role":"body","format":"markdown","text":"[JetBlue](https://www.loungefrog.com/airlines/b6) heads into its third-quarter earnings call on Tuesday, Oct. 27, with its lenders getting organized. A group of senior creditors is working with restructuring adviser PJT Partners and law firm Akin, The Wall Street Journal reported on Oct. 23, citing people familiar with the matter. Bloomberg News reported the same day that the group includes holders of JetBlue's $2 billion of bonds due 2031 and a $742 million first-lien loan.\n\nHiring advisers isn't a bankruptcy filing, and none of the reports say JetBlue is planning one. JetBlue says it's sticking with its plan.\n\n\"JetBlue remains confident in its JetForward strategy and the progress being made toward returning to sustained profitability,\" the company said in a statement reported by CNBC.\n\n## What the creditors hold\n\nThe bonds at the center of this are tied to JetBlue's loyalty program. In August 2024, JetBlue and a subsidiary called JetBlue Loyalty, LP sold $2 billion of 9.875% senior secured notes due September 2031, according to the company's SEC filing. At the same time, it took out a $765 million term loan due 2029. Both are secured by a first lien on collateral tied to TrueBlue, JetBlue's frequent flyer program.\n\nThose notes have taken a sharp hit. The Journal, citing market participants and data from the Financial Industry Regulatory Authority (Finra), reported that the 2031 notes fell to 42 cents on the dollar on Thursday, Oct. 22. They rebounded into the mid-40s Friday. Earlier in October, they traded near 80 cents, according to Finra data cited by the Journal. Bloomberg reported that both JetBlue's debt and its shares hit record lows last week.\n\nThe stock has fallen too. JetBlue shares closed at $2.62 on Friday, Oct. 23, down 42% this year, CNBC reported.","textStyle":"body","layout":"text"},{"role":"htmltable","html":"<table><tr><th>Item</th><th>Detail</th><th>Source</th></tr><tr><td>Loyalty notes</td><td>$2B, 9.875%, due Sept. 2031</td><td>JetBlue 8-K, Aug. 2024</td></tr><tr><td>Loyalty term loan</td><td>$765M at issue, due 2029</td><td>JetBlue 8-K, Aug. 2024</td></tr><tr><td>Note price, Oct. 22</td><td>42 cents on the dollar</td><td>WSJ, citing Finra</td></tr><tr><td>Creditor advisers</td><td>PJT Partners, Akin</td><td>WSJ, Bloomberg</td></tr></table>","layout":"text"},{"role":"body","format":"markdown","text":"## How much JetBlue owes\n\nJetBlue's most recent full numbers come from its second-quarter report for the period ending June 30, 2026. Total debt stood at $8.48 billion.\n\nFuel was the problem. JetBlue paid an average of $4.23 a gallon for jet fuel in the second quarter, up about 76% from a year earlier. Its fuel bill rose to $911 million, from $504 million. CNBC tied the surge in jet fuel costs to the Iran war.","textStyle":"body","layout":"text"},{"role":"htmltable","html":"<table><tr><th>Q2 2026 figure (as of June 30)</th><th>Amount</th></tr><tr><td>Operating revenue</td><td>$2.70 billion (up 14.5%)</td></tr><tr><td>Operating loss</td><td>$141 million</td></tr><tr><td>Net loss</td><td>$247 million</td></tr><tr><td>Cash and cash equivalents</td><td>$1.66 billion</td></tr><tr><td>Investment securities</td><td>$512 million</td></tr><tr><td>Undrawn credit line</td><td>$600 million</td></tr><tr><td>Total debt</td><td>$8.48 billion</td></tr><tr><td>Stockholders' equity</td><td>$1.59 billion</td></tr></table>","layout":"text"},{"role":"body","format":"markdown","text":"*Source: JetBlue's second-quarter 2026 earnings release and Form 10-Q.*\n\nThe Journal also reported that roughly two-thirds of JetBlue's property, equipment and intangible assets are pledged as collateral, citing the airline's quarterly filings. In July, JetBlue told investors it had more than $6 billion of unencumbered assets.\n\n## The turnaround plan\n\nJetForward is JetBlue's plan to get back to steady profits. In its July earnings presentation, JetBlue said the program was on track to add at least $310 million of earnings before interest and taxes in 2026. It said it expects $850 million to $950 million a year by the end of 2027.\n\nThe airline also said it expects a positive operating margin in 2027 and set a target of at least $1.00 in earnings per share by 2028. That target assumes jet fuel averages $3.00 a gallon in 2028, well below what it paid in the second quarter.\n\nPremium travel is key, including [BlueFirst domestic first class](https://www.loungefrog.com/news/jetblue-bluefirst-on-sale-30-routes-december-2026) and [BlueHouse lounges](https://www.loungefrog.com/news/jetblue-bluehouse-boston-opens-mint-lounge-access).\n\n## Where United stands\n\nUnited and JetBlue already work together through their [Blue Sky partnership](https://www.loungefrog.com/news/jetblue-united-blue-sky-booking-elite-perks-no-lounge-access). That has fueled talk that [United](https://www.loungefrog.com/airlines/ua) might want more. United CEO Scott Kirby has shot that down.\n\nAt a Bernstein investor conference in May, Kirby dismissed talk of a JetBlue deal, FlightGlobal reported. \"It's just idiotic,\" he said, according to Aviation News. \"The last thing I'm going to do is buy a route network that loses money.\"\n\nOn United's Oct. 21 earnings call, JPMorgan analyst Jamie Baker asked again, noting JetBlue's \"$2 billion of loyalty bonds trading at, whatever, half of par.\" Kirby didn't budge. \"I have nothing new to add on that,\" he said, according to the call transcript.","textStyle":"body","layout":"text"},{"role":"htmltable","html":"<table><tr><th>Player</th><th>Role or stance</th><th>Source</th></tr><tr><td>PJT Partners</td><td>Adviser to senior creditor group</td><td>WSJ</td></tr><tr><td>Akin</td><td>Law firm for creditor group</td><td>WSJ, Bloomberg</td></tr><tr><td>United CEO Scott Kirby</td><td>&quot;Nothing new to add&quot; on JetBlue (Oct. 21)</td><td>United Q3 call</td></tr><tr><td>JetBlue</td><td>&quot;Confident in its JetForward strategy&quot;</td><td>Statement via CNBC</td></tr></table>","layout":"text"},{"role":"body","format":"markdown","text":"## Why this matters for flyers\n\nJetBlue hasn't announced any changes for customers. None of the reports cited here describe plans to sell [JFK](https://www.loungefrog.com/airports/jfk) slots, gates or planes, and JetBlue hasn't announced any.\n\nDebt investors have been on guard partly because of Spirit, the budget airline JetBlue once tried to buy. It shut down earlier this year after repeated bankruptcy filings, the Journal noted. We looked at that collapse in [Who Killed Spirit?](https://www.loungefrog.com/news/who-killed-spirit)\n\n## What to watch Tuesday\n\nJetBlue will hold its third-quarter call at 10 a.m. Eastern on Oct. 27, according to its investor relations site. A company representative told the Journal that JetBlue would update its progress and financial outlook on that call.","textStyle":"body","layout":"text"}]}