JetBlue Airways (NASDAQ: JBLU) continues to reassure employees that bankruptcy is not on the table, even as its cash reserves dwindle. According to a Bloomberg report on November 6, the carrier reiterated this stance during a companywide call, emphasizing management's confidence in its liquidity position.
The airline's latest financial disclosures reveal a significant reliance on borrowed funds. As of September 30, JetBlue reported total liquidity of approximately $2.2 billion, but a substantial portion—$600 million, or 27%—remains an undrawn credit facility. The remaining $1.626 billion consists of cash and investment securities, a figure that has declined sharply over the past nine months.
Data from JetBlue's third-quarter earnings release shows cash and investments fell 34.4% from $2.477 billion at the end of December to $1.626 billion by September 30. In contrast, reported debt decreased only 1.2% during the same period, from $8.498 billion to $8.393 billion. This disparity highlights the airline's increasing reliance on external financing to fund operations and capital expenditures.
Chief Financial Officer Ursula Hurley acknowledged the situation during the call, noting that while the company has "a lot of cash in the bank," much of it was borrowed. Her comments reflect management's assessment of the current financial position rather than any new financing transaction.
The undrawn credit line is a $600 million revolving credit facility with Citibank, maturing in October 2029. This available borrowing capacity provides a safety net but also creates a future repayment obligation. The September 30 balance sheet does not necessarily reflect November's available cash, as the facility remains unused.
JetBlue's cash burn is evident in its operating activities, which consumed $273 million in the first nine months of the year. Additionally, aircraft capital spending and pre-delivery deposits totaled $624 million, bringing combined outflows to $897 million. These figures underscore why access to financing remains critical to the airline's turnaround strategy.
The company's fuel costs have also risen sharply, with an average price of $3.91 per gallon in the third quarter, up 57.4% from $2.49 a year earlier. This increase, coupled with a 2.3% rise in gallons consumed, adds further pressure on cash flow.
JetBlue is targeting sustained operating profitability in 2027 and positive free cash flow in 2028. Until then, it must rely on existing funds and access to credit to cover investment needs and debt maturities. The next major funding milestone is $250 million in additional aircraft-backed financing, expected to close in the fourth quarter, subject to customary conditions.
Investors reacted positively to the news, with JetBlue shares closing at $3.67 on November 6, up 5.16%. However, the gain occurred before Bloomberg's report was published, so it cannot be solely attributed to the reassurance.
CEO Joanna Geraghty had earlier denied any creditor talks or debt restructuring considerations in an October 27 statement to Reuters. The company's management remains committed to navigating through current challenges without resorting to bankruptcy protection.
