What JetBlue’s Multi-Billion Dollar Debt Means for Costa Rica Flights
The financial pressures on JetBlue Airways are growing and the resolution could have a significant impact on low fare service to San José and Liberia, one of the primary carriers connecting Costa Rica with the United States. The New York-based carrier has been in the red for six annuals and is currently struggling with nearly $8.4 billion in debt, as of September. 30.
A group of senior creditors, including those who own some $2 billion in notes due in 2031, hired investment bank PJT Partners and law firm Akin in late October, The Wall Street Journal reported. The notes had dropped from near 80 cents earlier in the month to about 42 cents on the dollar.
The daily price of JetBlue stock continued to descend on Oct. 26, falling to an all-time low just hours before the airline released its third-quarter earnings. The airline’s credit rating was downgraded to CCC+ in June by S&P Global Ratings, which placed it in the junk bond market, due to the increase in jet fuel prices linked to the conflict in the Middle East. Fitch made the same downgrade in April.
The quarterly report indicated revenue increased 21% (+$2.8 billion) due to a combination of unchanged demand and increased fares. But the net loss increased to $257 million from $143 million a year ago, with fuel prices at $3.91 a gallon, which was 57% higher than a year ago.
At the end of September, JetBlue had $2.2 billion in liquidity—including $600 million credit facility that it has not drawn—with operating margins projected to improve year over year in Q4. It continues to see adjusted operating margins in the range of negative 4.5% to negative 6.5% for the full year.
The airline will stay on course to achieve sustained operating profitability in 2027, Chief Executive Joanna Geraghty said. JetBlue is not in debt restructuring talks with creditors, she told Reuters on Oct. 27, and the company is not in talks with its creditors. In a letter to staff on April 1, she stated that the company has no plans to file bankruptcy in 2026.
The speculation about a merger was already ongoing before the recent upheaval. Semafor in March said that JetBlue was engaging advisers to consider selling the company, among them United, Alaska and Southwest. JetBlue said at the time that it was focused on its JetForward turnaround plan.
United is the carrier with the greatest number of mentions as a buyer. The two airlines already work together under their Blue Sky partnership program, allowing customers to accrue and redeem points on both airlines and are expected to receive slots for up to seven round trips per day at New York’s John F. Kennedy International Airport at least in 2027. JetBlue’s hub in FLL would also provide a buyer with a South Florida hub for access to the Caribbean and Latin America.
The idea has been rejected by United’s chief executive Scott Kirby. He said at an investor conference in May, “The last thing I’m going to do is purchase a route system that is not profitable. He told United on its Oct. 21 earnings call that he didn’t have anything new to add on JetBlue. There also would be antitrust scrutiny of any major U.S. airline deal.
Since March 2009, when JetBlue began operating a daily flight from Orlando to San Jose, Costa Rica, and in 2012 introduced service to New York from Liberia, the airline has flown into this country. It now flies between Fort Lauderdale and New York, and San José and Liberia and operates seasonal flights between Boston and Liberia.
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The airline closed its Orlando to San José operations on July 8, due to rising fuel prices and a shift to its Fort Lauderdale base. Just under three weeks after the end of flights by Spirit Airlines, the Costa Rica Tourism Board (ICT) confirmed it, too, was cutting its operations on May 20.
The result of those routes will depend on the outcome of the matter with JetBlue. A United purchase might allow for the consolidation of overlapping routes as United currently flies to San José and Liberia from hubs such as Newark and Houston. If a larger presence of United was in Fort Lauderdale, it could help to maintain or add South Florida service.
A future restructuring that would maintain the airline’s independence would likely result in a smaller network, and it’s possible that the seasonal leisure routes would be among the first cut in such events. A combination with Alaska or Southwest would be less redundant on the New York routes which feed Liberia. Guanacaste is in the greatest danger.
Liberia’s aviation sector uses a lot of traffic from the U.S. Northeast, with the direct flights to the province being a key source for hotels and tour operators, and the high season is just around the corner, from December through April. JetBlue’s operations remain unaffected for the time being and there are no further changes in their Costa Rica service announced. When airlines declare Chapter 11, they usually continue to operate and uphold ticket and loyalty programs, although it is not always the case.