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JetBlue Credit Rating Dropped  
User currently offlineRwy04LGA From United States of America, joined Jul 2005, 3176 posts, RR: 8
Posted (7 years 4 months 2 weeks 3 days 5 hours ago) and read 2818 times:

jetBlue Airways' credit rating was cut one step further to B3, six levels below investment grade bt Moody's Investors Service, after the LCC posted losses for all of 2006 and the 1st Q of 2007.


Just accept that some days, you're the pigeon, and other days the statue
2 replies: All unread, jump to last
 
User currently offlineFA4B6 From , joined Dec 1969, posts, RR:
Reply 1, posted (7 years 4 months 2 weeks 3 days 5 hours ago) and read 2772 times:

Source: http://today.reuters.com/news/articl...TRIDST_0_JETBLUE-RATING-MOODYS.XML

User currently offlineAirFrnt From United States of America, joined Jul 2004, 2826 posts, RR: 42
Reply 2, posted (7 years 4 months 2 weeks 3 days 4 hours ago) and read 2702 times:

Quoting Rwy04LGA (Thread starter):
jetBlue Airways' credit rating was cut one step further to B3, six levels below investment grade bt Moody's Investors Service, after the LCC posted losses for all of 2006 and the 1st Q of 2007.

This is horrible news for JetBlue. Dropping credit levels means that it costs more to finance jet purchases, and other large non-capital expenditures. Depending on the covenants that they have with existing loans, that might retroactively apply to previous capital as well.

Quote:

The company's ratings "were downgraded because of the continued high level of financial leverage following several years of rapid, largely debt-financed growth of its aircraft fleet," Moody's said in a news release.

Another factor was "weak financial results at JetBlue during a relatively good operating environment for the airlines," Moody's said.

The Jetblue debt game always depended on their revenue growing fast enough to eclipse the high level of debt that they took on. Jetblue's inability to fill their fleet, means the debt will start slowly strangling them unless they can boost their operating margins. Not good.


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