S&P Global Ratings said on Monday it downgraded JetBlue Airways to CCC+ from B-, a move that pushes the New York-based low-cost carrier further into junk rating territory. The decision reflects S&P’s view that elevated jet fuel and oil prices will materially impede JetBlue’s recovery efforts.
The airline has been pursuing a turnaround that includes cost reductions, network adjustments and steps to bolster operational reliability. However, S&P said rising fuel costs linked to the Middle East conflict have complicated those efforts, particularly for budget and low-cost carriers that face limited scope to pass higher input costs through to price-sensitive travelers without jeopardizing demand.
"Given the ongoing Middle East conflict and material rise in oil and jet fuel prices, we expect JetBlue’s operating performance to be significantly pressured over at least the next 12 months," S&P said. "A strong demand environment continues to support higher air fares, but we no longer expect positive free cash flow generation until 2028 and project leverage to be about 10x by the end of 2027."
S&P warned that a deeper junk rating may increase JetBlue’s borrowing costs and constrain access to capital markets at a time when the carrier may require additional liquidity to fund operations. In April, Fitch Ratings also downgraded JetBlue to CCC+ from B-, citing ongoing operating losses and negative free cash flow.
Despite the downgrade, S&P kept its outlook on JetBlue stable. The agency said it expects the airline to maintain sufficient liquidity to cover forecasted free cash flow shortfalls through 2027, and it does not anticipate significant near-term maturities or a default or restructuring in the next 12 months.
Earlier this year JetBlue secured a debt financing commitment of $500 million that is backed by up to 22 aircraft, with an option to raise an additional $250 million. The financing arrangement provides an identified source of liquidity as the airline navigates the pressured operating environment.
Context and implications
The rating action emphasizes the tension between a stronger demand environment that supports higher fares and the squeeze from elevated jet fuel and oil prices. For low-cost carriers like JetBlue, the limited ability to transfer higher fuel input costs to consumers without dampening demand is a central constraint. The downgrade underscores potential consequences for credit costs, capital market access and the timeline for restoring positive free cash flow.