JetBlue Shows Its BlueFirst Cabin as Turnaround Leans Premium

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JetBlue put a new first-class cabin on show at New York's JFK airport on 11 November. The airline wants premium seats to carry it back to profit, and its CEO is telling bondholders it does not need to reorganize.

BlueFirst arrives next month

The seats are called BlueFirst. JetBlue announced a domestic first class in December 2024 and plans to fly aircraft with the new seats and the full onboard product next month. Retrofits continue through 2027, CEO Joanna Geraghty told CNBC late last month.

A recliner first-class ticket between Kennedy and Fort Lauderdale-Hollywood is $847 round trip in the first week of March. A standard economy ticket on the same dates is $446.

JetBlue is not alone. Frontier Airlines showed its own first-class seats on Tuesday. They will fill the first two rows, and Frontier will put extra-legroom seating with in-seat power through row eight. To fit them, it will take a row of seats off its planes, said chief marketing officer Bobby Schroeter.

Bondholders and the bankruptcy question

JetBlue last posted a profit in 2019. Last month its shares hit a record low after a report that bondholders had hired restructuring advisers. On Oct. 27 Geraghty told CNBC that the airline has no plans to file for bankruptcy and is not working with a restructuring firm.

On Wednesday she told CNBC's Phil LeBeau that JetBlue had spoken with some creditors in recent weeks, which she described as routine contact with investors. She said the company made clear it does not need to reorganize. JetBlue stock has gained more than 40% since the start of the month, a bigger rise than its peers, but it is still roughly 11% below where it began the year.

Liquidity, debt and the plan

At the end of the third quarter JetBlue held $2.2 billion in liquidity and a $7 billion unencumbered asset base, including $2.8 billion in aircraft and engines. Total debt was $8.4 billion on Sept. 30. Geraghty has described a "fundamental disconnect" between the bond market narrative and the company's financial results.

The turnaround plan aims for an operating profit next year and $1 in adjusted earnings per share in 2028. Geraghty said last month that cost control will not mean furloughs, layoffs or buyouts.

Fares and costs

Airline executives expect fares to stay high next year because of costs such as fuel, labor and airport fees. Geraghty said that even if fuel prices ease, she does not think fares will fall as much as people expect.

Source: CNBC