The leading rating agencies S&P Global Ratings, Moody’s Investors Service, and Fitch Ratings have downgraded the creditworthiness of JetBlue Airways. This happened shortly after the airline announced that it would issue convertible bonds worth 400 million US dollars to redeem other bonds.

S&P Global Ratings downgraded JetBlue's issuer rating from "B" to "B-". The agency cited a challenging operating environment over the next one to two years. Higher labor costs, infrastructure constraints, and an oversupply of capacity on key domestic routes, combined with engine issues, pose significant challenges for JetBlue. The issuance of $2.75 billion in debt secured by the TrueBlue loyalty program also strains the company's free cash flow, according to S&P.

Moody’s has downgraded JetBlue’s Corporate Family Rating to “B3” from “B2” and lowered the probability of default as well as the existing rating of the secured bank credit facility. The agency expects JetBlue’s earnings to remain under pressure, particularly due to increasing competition and a shortage of air traffic controllers in key East Coast markets. Additionally, JetBlue is projected to have a negative free cash flow of $2.2 billion this year and $1.4 billion in 2025, driven by cumulative investments of $3 billion over the next two years.

Fitch affirmed JetBlue’s long-term issuer default rating at "B", but downgraded existing secured debt ratings to "BB-" from "BB". The agency cited ongoing margin pressure, which is expected to persist until 2025, despite JetBlue having sufficient liquidity to service short-term debt obligations.

JetBlue plans to offer $400 million in convertible bonds maturing in 2029 to repay bonds maturing in 2026.