A federal judge blocked JetBlue Airways' $3.8 billion takeover of Spirit Airlines during the Biden administration to protect consumers. That supposedly brilliant decision is now looking increasingly disastrous for both airlines and the passengers it was meant to protect.
First, Spirit Aviation shuttered all operations earlier this year, stunning travelers with the abrupt move after 34 years of offering some of the most deeply discounted fares. Now, JetBlue could be on a similar trajectory, as the carrier's shares and junk bonds have cratered over the last several months.
Bloomberg News reported late Friday that JetBlue's creditors are organizing with restructuring advisers as the budget airline grapples with cash burn and high jet fuel prices.
The report centers on a group of creditors, including holders of $2 billion in bonds due in 2031 and a $742 million first-lien loan, who are working with PJT Partners and Akin Gump Strauss Hauer & Feld.
JetBlue's 9.875% 2031 bonds traded near 80 cents on the dollar at the start of October but, just three weeks into the month, had fallen to distressed levels around 44 cents by Friday's close.
The stock has followed a similar trajecto
