Updated version 1 - JetBlue Airways shares rise as the company works to ease concerns about its financial condition

Updated with first paragraph stock price

Reuters, October 27 - In early Tuesday trading, JetBlue Airways (JBLU.O) shares rose more than 12% as the company sought to alleviate market concerns about its financial position, even though its quarterly loss exceeded expectations (link).

This quarter’s performance was weighed down by surging fuel prices caused by ongoing conflict in Iran, forcing airlines to take aggressive measures such as steep fare increases, capacity cuts (link), or increased debt.

The pressure from fuel costs, combined with weather disruptions and air traffic control interruptions earlier this year, has wiped out around 48% of JetBlue’s share price, reducing its market value to $894.23 million, making it the worst-performing U.S. airline.

https://www.reuters.com/graphics/AUTOMATED-202610/A4A-JET-FUEL-MONTHLY-5Y/gdvzgejwbpw/chart.png

Nevertheless, JetBlue ended the third quarter with $2.2 billion in liquidity, including $600 million in unused credit facilities and approximately $7 billion in unencumbered assets—of which, according to the latest assessment, $2.8 billion are aircraft and engines.

The carrier also raised its full-year revenue per seat forecast from 10%-12.5% to 13.5%-14.5%, mainly driven by robust fares and growth in its Fort Lauderdale routes, but also noted that fuel costs would be a drag.

“Liquidity and $2.8 billion in aircraft assets may provide room for growth, but the key to profitability lies in fuel costs,” said analysts at TD Cowen.

JetBlue’s third-quarter fuel costs surged, with the airline paying $3.91 per gallon, up 57% from the same period last year.

By contrast, unit revenue rose 18.4%, highlighting how profit margins remain pressured by rising fuel costs despite strong ticket prices.

https://www.reuters.com/graphics/JETBLUE-RESULTS/JETBLUE-RESULTS/byvradmjwpe/chart.png

Tuesday’s rally marked a reversal for last week—when reports surfaced that, amid a bond market sell-off, JetBlue creditors were working with restructuring advisors, hammering the airline’s stock price.

JetBlue’s “TrueBlue” senior secured notes—a bond backed by the airline’s loyalty program—faced heavy selling pressure this month, dropping in price to around $47, with yields surging above the distress level of 30%.

(To facilitate non-English speakers, Reuters has automated the translation of its reports into several other languages. Because automated translation may contain errors or lack necessary context, Reuters does not guarantee the accuracy of automated translation texts and offers them solely for reader convenience. Reuters accepts no responsibility for any damages or losses resulting from the use of automated translation.)