Summary JetBlue has looked to raise $3.1 billion through various measures, including guaranteeing some of the debt with its loyalty program, TrueBlue. Over the past six months, the airline had improved its cash situation slightly.
At the same time, it has deferred Airbus A321neo aircraft, which were due for delivery between 2025 and 2029, to 2030 and beyond, which will further improve its cash situation. JetBlue has announced that it was looking to raise up to $3.1 billion in two separate note offerings and a senior secured loyalty term, with both liquidity measures being announced on August 12.
Guaranteeing $2.75 billion with its loyalty program According to one statement, JetBlue intended to commence a private offering of $1.5 billion aggregate principal amount of senior secured notes that were due in 2031.
Furthermore, it wanted to launch a proposes senor secured Term Loan B due in 2029 in an aggregate principal amount of $1.25 billion. “The Loyalty Notes will be secured, on a pari passu basis with the Loyalty Term Loan, by, among other assets, a first-priority lien on the core assets of JetBlue’s customer loyalty program, TrueBlue.
” The airline said that it would use the net proceeds from both liquidity measures for “general corporate purposes.” Talks are in the preliminary stage. $400 million notes offering In a separate announcement, JetBlue said that it would offer $400 million aggregate principal amount of convertible senior notes that were due in 2029.
The airline planned to grant the initial purchasers of the notes an option to purchase an additional $60 million aggregate principal amount of the notes within 13 days from and including the date of the original issuance of the notes. “JetBlue intends to use the net proceeds from the offering to repurchase a portion of their existing 0.50% senior convertible notes due 2026 in one or more transactions, subject to prevailing market conditions, and to pay fees and expenses related to the offering and incurred in connection with such repayment.
” Any remaining net proceeds would be used for general corporate purposes, the airline said. The chief financial officer of JetBlue mentioned on Tuesday, 30 July, that the airline aims to address convertible maturities as swiftly as possible. JetBlue’s cash situation In its latest quarterly report filed with the United States Securities and Exchange Commission (SEC), JetBlue disclosed that its cash and cash equivalents were $1.
3 billion as of June 30. In comparison, it ended 2023 with cash and cash equivalents of $1.1 billion.
Meanwhile, its total assets were relatively the same at the end of the two periods, with the carrier ending Q2 and 2023 with $13.9 billion and $13.8 billion in total assets, respectively.
Q2 passenger travel revenue $2.08 billion Q2 loyalty revenue (air transportation) $180 million Q2 other loyalty revenue $114 million Q2 2024 total revenue (includes other revenue) $2.4 billion The Q2 SEC filing also said that JetBlue and Airbus agreed that the airline would defer A321neo aircraft, which were scheduled to be delivered between 2025 and 2029, to 2030 and beyond.
While JetBlue had a single A321neo delivery remaining in 2024 and four additional A321neos should bolster its fleet in 2025, the airline will only add A220-300 aircraft between 2026 and 2028. As a result, its capital expenditure (CapEx) commitments will be less than $1 billion each year between 2024 and 2028, with its planned CapEx being the highest in 2025 when the airline plans to take delivery of 20 A220-300 and four A321neo aircraft. Destined to replace the aging E195 fleet, the A220 provides 90% more premium seats.
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