(Reuters) – JetBlue Airways said on Monday it plans to raise about $3.15 billion in capital through separate debt offerings, the majority backed by its loyalty program, TrueBlue, as it tries to improve its liquidity.
Shares of the company were down 8% in premarket trading.
The New York-based airline intends to raise $1.5 billion through a private offering of senior secured notes and an additional $1.25 billion via a term loan, secured by TrueBlue.
Leveraging loyalty programs as collateral has become a popular strategy for airlines to boost liquidity, a practice that gained traction during the COVID-19 pandemic.
Major carriers like Delta Air and United Airlines previously leveraged their loyalty programs to enhance cash reserves during challenging times.
JetBlue has been trying to control costs, including deferring deliveries of 44 new jets from Airbus, reducing its planned capital expenditure by about $3 billion between 2025 and 2029.
The airline’s operations have also been impacted by a powder metal issue with Pratt & Whitney’s Geared Turbofan (GTF) engines, forcing JetBlue to ground several aircraft.
In a separate statement, the New York-based carrier also said it would raise $400 million through a convertible notes offering, most of which would be used to refinance the carrier’s existing debt.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Tasim Zahid)