S&P Downgrades JetBlue’s Credit Rating

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JetBlue’s credit rating was downgraded as the carrier struggles to return to profitability.

S&P Global Ratings downgraded JetBlue’s credit rating from a B+ to a B Thursday, citing financial performance that had “weakened considerably.” 

The rating agency pointed to higher operating costs, moderating demand, and elevated debt levels. It noted the credit outlook would weaken further if the acquisition of Spirit Airlines – currently blocked by a court – went through on appeal.  

In November, Fitch said it downgraded JetBlue because it expected the airline’s profitability in 2023 and 2024 to be materially lower than it initially forecasted.

JetBlue did not immediately respond to a request for comment regarding the downgrade.

The lower credit rating from S&P adds more pressure on new JetBlue CEO Joanna Geraghty to turn a profit for the carrier, which has struggled since the loss of the Northeast Alliance and softer-than-expected domestic travel demand. 

During a fourth-quarter earnings call, Geraghty said JetBlue would look to cut costs and use other strategies to reach profitability: Refocusing its network to emphasize more leisure, adding more premium seating and expanding its loyalty program. 

The downgrade comes after activist investor Carl Icahn acquired a 9.91% stake in the company, making him JetBlue’s third-largest investor. In a regulatory filing, Icahn said he believed JetBlue’s stock was undervalued. 

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