JetBlue CEO rules out bankruptcy this year despite surging fuel costs amid Iran war

By Shivansh Tiwary

April 20 (Reuters) - JetBlue ‌Airways CEO Joanna ​Geraghty ​told employees the carrier was not considering bankruptcy for this year, according to a memo seen by Reuters on Monday, even as higher jet ‌fuel prices due to the Iran war threaten its financial recovery.

Airlines worldwide ⁠are struggling with surging jet fuel costs after U.S.-Israeli strikes on Iran disrupted traffic through the Strait ‌of Hormuz, a key waterway ‌for global oil flows, delivering the industry's biggest shock since the COVID-19 pandemic.

The New York-based carrier recently secured a $500 million debt financing commitment backed by up to 22 ​aircraft, with an option to raise an additional $250 million using more planes as collateral.

The airline had ample liquidity and access to additional capital, Geraghty said in ⁠the internal memo.

A video clip of JetBlue founder David Neeleman - who ran the airline until 2007 - warning it could ​face bankruptcy this year went viral on social media last week. A person familiar with the matter confirmed the authenticity of the video ​on Monday.

Jet fuel prices, which typically account for ‌about a quarter of airline operating costs, have nearly doubled since the Iran war began, squeezing carriers caught between rising expenses and ⁠pre-sold tickets they cannot reprice.

Rising fuel costs heighten the pressure on smaller carriers like JetBlue, which have limited financial flexibility and greater exposure to uncertainty. Industry executives warn the Middle East conflict ⁠could reshape airline industry dynamics.

"There has also been speculation about potential consolidation in the industry, including ​questions over Spirit's (Spirit Airlines) future," Geraghty said in the memo.

"Any further consolidation would be subject to regulatory review, and the outcome remains uncertain."

JetBlue entered 2026 aiming to regain stability and start reaping the ‌benefits of a turnaround launched in 2024, focusing on tight cost controls, route optimization and deferring aircraft deliveries. But high fuel costs ‌threaten to derail that plan.

"We're operating in an environment that is more challenging than we ⁠had expected at the beginning of ‌the year particularly as it ​relates to fuel prices," Geraghty said in the memo.

(Reporting by Shivansh Tiwary and Megavarshini G. Somasundaram in Bengaluru; Editing by Maju Samuel and ‌Pooja Desai)

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