JetBlue Stock Is Soaring After Icahn Takes Stake. It's an Eventful Start for the New CEO. -- Barrons.com
Dow Jones Newswires February 13, 2024 05:08:00 AM ET
It's been quite the start for Joanna Geraghty as the new CEO of JetBlue Airways.
Barely 24 hours into her tenure, the first woman to run a major U.S. airline is facing up to an activist investor campaign from Carl Icahn.
Billionaire Icahn disclosed a 9.9% in the low-cost carrier in a filing late Monday, describing the stock as an " undervalued" and "attractive" investment opportunity. JetBlue shares were surging 14% in premarket trading Tuesday and looked set to continue their recent comeback -- they have risen 24% over the past month as of Monday's close. The shares remain around 30% lower over the past year.
While Icahn said he doesn't have any plans or proposals for the company, he's in discussions over possible representation on the carrier's board.
A spokesperson for JetBlue said in an emailed statement to Barron's: "We are always open to constructive dialogue with our investors as we continue to execute our plan to enhance value for all of our shareholders and stakeholders."
If that wasn't enough for Geraghty's first day in the job, the carrier has also canceled close to 20% of its daily flights scheduled for Tuesday as airlines prepared for a winter storm along the East Coast. JetBlue has canceled the most flights any major U.S. airline as of 4 a.m. Eastern time as it's heavily exposed to the Northeast of the country.
Geraghty's in-tray, after succeeding Robin Hayes, also includes preparing to appeal a federal judge's decision to block the company's proposed merger with Spirit Airlines. The Court of Appeals will consider JetBlue and Spirit's arguments in June ahead of a deadline of July 24 for the deal to be closed.
The carrier has begun planning for a future without Spirit, though, in the event of the appeal being unsuccessful. Geraghty, who previously served as the company's chief operating officer, said on JetBlue's fourth-quarter earnings call last month that she would take "aggressive action" to return the company to profitability.
That includes initiatives expected to add $300 million in revenue, and plans to reduce costs by deferring $2.5 billion worth of capital expenditure on aircraft to beyond 2027.
Other airline stocks were mixed ahead of the open, as United Airlines fell 1%, Delta Air Lines fell 0.7%, American Airlines rose 0.2% and Southwest Airlines was 0.4% higher.
Write to Callum Keown at callum.keown@barrons.com
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