JetBlue Stock (JBLU) Drops after CEO Warns that Financial Struggles Will Continue

JetBlue (JBLU) shares dropped on Tuesday after CEO Joanne Geraghty warned employees that weak travel demand will continue to hurt the airline’s ability to return to profitability. In a letter seen by CNBC, she said that the company hopes bookings will bounce back, but even a rebound won’t be enough to recover the losses already taken this year. Because of this, JetBlue will continue to rely on borrowed money to keep its operations going.

Unsurprisingly, in order to save cash and lower expenses, JetBlue is planning to cut flights, pause aircraft upgrades, ground some planes, and streamline leadership roles for greater efficiency. Indeed, back in April, during its Q1 earnings report, JetBlue said it was looking at all options to improve profits and preserve cash. It also declined to reaffirm its full-year guidance due to economic uncertainty, though it had previously projected flat capacity growth and capital spending of $1.3 billion for Fiscal 2025.

It is worth noting that JetBlue isn’t alone in facing these headwinds. In fact, the entire airline industry is seeing weaker demand for domestic travel, which has led to lower capacity and ticket prices. As a result, other major airlines like American Airlines (AAL), Delta (DAL), and Southwest (LUV) have also withdrawn their full-year outlooks, while United Airlines (UAL) issued two sets of guidance: one assuming a steady economy and another in case of a recession.

Which Airline Stock Is the Better Buy?

Turning to Wall Street, out of the airline stocks mentioned above, analysts think that UAL stock has the most room to run. In fact, UAL’s average price target of $100.14 per share implies more than 33% upside potential. On the other hand, analysts expect the least from LUV stock, as its average price target of $31.38 equates to a loss of 1%.

See more UAL analyst ratings