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Long-term Debt, Short-term Borrowings and Finance Lease Obligations
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Long-term Debt, Short-term Borrowings and Finance Lease Obligations Long-term Debt, Short-term Borrowings, and Finance Lease Obligations
Long-term debt and finance lease obligations and the related weighted average contractual interest rate at December 31, 2023 and 2022 consisted of the following (in millions):
 December 31, 2023December 31, 2022
Secured Debt
Fixed rate specialty bonds, due through 2036$43 5.0 %$43 4.9 %
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032481 2.8 %510 2.8 %
2019-1 Series A, due through 2028150 3.0 %159 3.0 %
2019-1 Series B, due through 202771 8.1 %83 8.1 %
2020-1 Series A, due through 2032511 4.1 %552 4.1 %
2020-1 Series B, due through 2028118 7.8 %136 7.8 %
Fixed rate enhanced equipment notes, due through 2023— — %61 4.4 %
Fixed rate equipment notes, due through 2028323 4.3 %448 4.2 %
Floating rate equipment notes, due through 2030109 7.4 %56 6.9 %
Aircraft sale-leaseback transactions, due through 20351,649 7.0 %341 7.3 %
Finance leases— — %2 6.1 %
Unsecured Debt
Unsecured CARES Act Payroll Support Program loan, due through 2030259 2.0 %259 2.0 %
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031144 2.0 %144 2.0 %
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031132 2.0 %132 2.0 %
0.50% convertible senior notes, due through 2026
750 0.5 %750 0.5 %
Total debt and finance lease obligations$4,740 $3,676 
Less: Debt acquisition cost(24)(29)
Less: Current maturities(307)(554)
Long-term debt and finance lease obligations$4,409 $3,093 
Fixed Rate Specialty Bonds, Due Through 2036
In November 2005, the Greater Orlando Aviation Authority (“GOAA”) issued special purpose airport facilities revenue bonds to JetBlue as reimbursement for certain airport facility construction and other costs. In April 2013, GOAA issued $42 million in special purpose airport facility revenue bonds to refund the bonds issued in 2005. The proceeds from the refunded bonds were loaned to us and we recorded the issuance of $43 million, net of $1 million premium, as long-term debt on our consolidated balance sheets.
Fixed Rate Enhanced Equipment Notes
2019-1 Equipment Notes
In November 2019, we completed a public placement of equipment notes in an aggregate principal amount of $772 million secured by 25 Airbus A321 aircraft. The equipment notes were issued in two series: (i) Series AA, bearing interest at the rate of 2.75% per annum in the aggregate principal amount equal to $589 million, and (ii) Series A, bearing interest at the rate of 2.95% per annum in the aggregate principal amount equal to $183 million. Principal and interest are payable semi-annually.
In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $115 million bearing interest at a rate of 8.00% per annum. These equipment notes are secured by the 25 Airbus A321 aircraft included in the collateral pool of our 2019-1 Series AA and Series A offerings completed in November 2019. Principal and interest are payable semi-annually.
2020-1 Equipment Notes
In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $808 million secured by 24 Airbus A321 aircraft. The equipment notes were issued in two series: (i) Series A, bearing interest at the rate of 4.00% per annum in the aggregate principal amount equal to $636 million, and (ii) Series B, bearing interest at the rate of 7.75% per annum in the aggregate principal amount equal to $172 million. Principal and interest are payable semi-annually.
Fixed Rate Enhanced Equipment Notes, Due Through 2023
In March 2014, we completed a private placement of $226 million in pass-through certificates, Series 2013-1. The certificates were issued by a pass-through trust and were not obligations of JetBlue. The proceeds from the issuance of the pass-through certificates were used to purchase equipment notes issued by JetBlue and secured by 14 of our aircraft. These notes matured and the related aircraft became unencumbered between 2021 and 2023. During 2023, the Company made repayments of $61 million, which resulted in the final eight aircraft becoming unencumbered. There are no amounts outstanding under the Series 2013-1 private placement as of December 31, 2023.
Fixed Rate Equipment Notes, Due Through 2028
In 2019, we issued $219 million in fixed rate equipment notes due through 2027, which are secured by 10 Airbus A320 aircraft and two Airbus A321 aircraft. In 2018, we issued $567 million in fixed rate equipment notes due through 2028, which are secured by 14 Airbus A320 aircraft and 10 Airbus A321 aircraft. In 2022, we prepaid approximately $11 million of debt on fixed rate equipment notes, thus five E190 aircraft became unencumbered.
Floating Rate Equipment Notes, Due Through 2030
In 2018, we issued $120 million in floating rate equipment notes due through 2028, which are secured by six Airbus A320 aircraft and one Airbus A321 aircraft.
In April 2023, JetBlue entered into an agreement to finance certain aircraft for an aggregate principal amount of $78 million. Debt incurred under the agreement matures in 2030, with principal and interest payable quarterly in arrears.
Floating rate debt is equal to Secured Overnight Financing Rate (“SOFR”), plus an applicable margin.
Aircraft Sale-Leaseback Transactions, Due Through 2035
In 2020, we executed $563 million of aircraft sale-leaseback transactions. Of these transactions, $354 million did not qualify as sales for accounting purpose. The assets associated with these transactions remain on our consolidated balance sheets within property and equipment and the related liabilities under the lease are classified within debt and finance leases obligations. These transactions are treated as cash from financing activities on our consolidated statements of cash flows. The remaining $209 million of sale-leaseback transactions qualified as sales and generated a loss of $106 million. The assets associated with these transactions which qualified as sales are recorded within operating lease assets. The liabilities are recorded within current operating lease liabilities and long-term operating lease liabilities on our consolidated balance sheets. These transactions are treated as cash from investing activities on our consolidated statements of cash flows.
We did not execute any aircraft sale-leaseback transactions in 2021 or 2022.
In 2023, we executed $1.3 billion of aircraft sale-leaseback transactions; none of these transactions qualified as sales for accounting purposes. The assets associated with these transactions remain on our consolidated balance sheets within property and equipment and the related liabilities under the lease are classified within debt and finance lease obligations. These transactions are treated as cash from financing activities on our consolidated statements of cash flows.
In 2024, we executed $174 million of aircraft sale-leaseback transactions which did not qualify as sales for accounting purposes.
Federal Payroll Support Programs, Due Through 2031
As a result of the adverse economic impact of COVID-19, in 2020 and 2021 we received assistance under various payroll support programs provided by the federal government.
CARES Act – Payroll Support Program
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Under the CARES Act, assistance was made available to the aviation industry in the form of direct payroll support (the “Payroll Support Program”) and secured loans (the “Loan Program”).
On April 23, 2020, we entered into a Payroll Support Program Agreement (the “PSP Agreement”) under the CARES Act with the United States Department of the Treasury (“Treasury”) governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with a total of approximately $963 million (the “Payroll Support Payments”) consisting of $704 million in grants and $259 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable SOFR plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. As part of the agreement, JetBlue issued to Treasury warrants to acquire more than 2.7 million shares of our common stock under the program at an exercise price of $9.50 per share.
Consolidated Appropriations Act – Payroll Support Program 2
On January 15, 2021, we entered into a Payroll Support Program Extension Agreement (the “PSP Extension Agreement”) with Treasury governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “Payroll Support Program 2”). Treasury provided us with a total of approximately $580 million (the “Payroll Support 2 Payments”) under the program, consisting of $436 million in grants and $144 million in unsecured term loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until January 15, 2026, and the applicable SOFR plus 2.00% thereafter until January 15, 2031. In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to Treasury at an exercise price of $14.43 per share.
American Rescue Plan Act – Payroll Support Program 3
On May 6, 2021, we entered into a Payroll Support 3 Agreement (the “PSP3 Agreement”) with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the “Payroll Support Program 3”). Treasury provided us with a total of approximately $541 million (the “Payroll Support 3 Payments”) under the program, consisting of $409 million in grants and $132 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until May 6, 2026, and the applicable SOFR plus 2.00% thereafter until May 6, 2031. In consideration for the Payroll Support 3 Payments, we issued warrants to purchase approximately 0.7 million shares of our common stock to Treasury at an exercise price of $19.90 per share.
The warrants associated with each of the payroll support programs described above will expire 5 years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.
The carrying values relating to the payroll support grants were recorded within other accrued liabilities and were recognized as a contra-expense within special items on our consolidated statements of operations as the funds were utilized. The relative fair value of the warrants were recorded within additional paid-in capital and reduced the total carrying value of the grants. Proceeds from the payroll support grants and from the issuance of payroll support warrants were classified within operating activities and financing activities, respectively, on our consolidated statements of cash flows. Our funding from all payroll support grants were fully utilized as of December 31, 2021.
The carrying values relating to the unsecured payroll support loans were recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans were classified as financing activities on our consolidated statement of cash flows.
0.50% Convertible Senior Notes, Due Through 2026
In March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. The notes are general senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The notes will effectively rank junior in right of payment to any of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were approximately $734 million.
Holders of the notes may convert them into shares of our common stock prior to January 1, 2026 only under certain circumstances (such as upon the satisfaction of the sale price condition, the satisfaction of the trading price condition, notice of redemption, or specified corporate events) and thereafter at any time at a rate of 38.5802 shares of common stock per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $25.92 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the issuance of certain
stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness or assets, cash dividends, and certain issuer tender or exchange offers.
Upon conversion, the notes will be settled in cash up to the aggregate principal amount of the notes to be converted and, at our election, in shares of our common stock, cash or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation.
We are not required to redeem or retire the notes periodically. We may, at our option, redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after April 1, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption to the holders.
We evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, separate accounting for the conversion feature of this note offering is not required.
Interest expense recognized in both 2023 and 2022 was $7 million, of which, $3 million was related to the amortization of debt issuance costs.
General Debt Matters
In 2023, we made principal payments of $347 million on our outstanding debt and finance lease obligations.
As of December 31, 2023, we were in compliance with the covenants of our debt and lease agreements.
In 2023, there were no early debt extinguishments. Debt payoffs resulted in immaterial extinguishment expense and a $50 million extinguishment expense in 2022 and 2021, respectively.
Maturities of our debt and finance leases, net of debt acquisition costs, for the next five years are as follows (in millions):
Maturities
2024$301 
2025273 
20261,017 
2027269 
2028374 
Thereafter2,482 
As of December 31, 2023, aircraft, engines, intangible assets, other equipment, and facilities with a net book value of $7.1 billion were pledged as security under various financing arrangements. Cash payments for interest related to debt and finance lease obligations, less interest income cash receipts, were $80 million, $124 million, and $180 million in 2023, 2022, and 2021, respectively.
The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at December 31, 2023 and 2022 were as follows (in millions):
December 31, 2023December 31, 2022
Carrying Value
Estimated Fair Value (1)
Carrying ValueEstimated Fair Value
Public Debt
Fixed rate special facility bonds, due through 2036$42 $43 $42 $43 
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032476 474 504 345 
2019-1 Series A, due through 2028149 150 157 124 
2019-1 Series B, due through 202770 86 82 87 
2020-1 Series A, due through 2032506 597 546 457 
2020-1 Series B, due through 2028117 150 135 142 
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023— — 61 60 
Fixed rate equipment notes, due through 2028322 305 447 422 
Floating rate equipment notes, due through 2030109 113 56 49 
Unsecured CARES Act Payroll Support Program loan, due through 2030259 184 259 126 
Aircraft sale-leaseback transactions, due through 20351,648 1,738 341 329 
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031144 101 144 68 
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031132 93 132 62 
0.50% convertible senior notes, due through 2026
742 657 739 534 
Total (2)
$4,716 $4,691 $3,645 $2,848 
(1) The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair values of our non-public debt are estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. The fair values of our other financial instruments approximate their carrying values. Refer to Note 13 for an explanation of the fair value hierarchy structure.
(2) Total excludes finance lease obligations of $2 million at December 31, 2022, and an immaterial amount at December 31, 2023.
We have financed certain aircraft with Enhanced Equipment Trust Certificates (“EETCs”). One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity (“VIE”), as defined in Topic 810 Consolidation of the FASB Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.
Short-term Borrowings
Morgan Stanley Line of Credit
We have a revolving line of credit with Morgan Stanley for up to approximately $200 million. This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the amount available to us under this line of credit may vary accordingly. This line of credit bears interest at a floating rate based upon LIBOR (or such replacement index as the bank shall determine from time to time in accordance with the terms of the agreement), plus a margin. As of and for the years ended December 31, 2023 and 2022, we did not have a balance outstanding or borrowings under this line of credit.
Citibank Line of Credit
On October 21, 2022, JetBlue entered into the $600 million Second Amended and Restated Credit and Guaranty Agreement (the “Facility”), among JetBlue, Citibank N.A., as administrative agent, and the lenders party thereto. Borrowings under the Facility bear interest at a variable rate based on SOFR, plus a margin of 2.00% per annum, or another rate (at JetBlue's election) based on certain market interest rates, plus a margin of 1.00% per annum, in each case with a floor of 0%. The Facility is secured by spare parts, aircraft, simulators, and certain other assets as permitted thereunder. The Facility includes covenants that require us to maintain certain minimum balances in unrestricted cash, cash equivalents, and unused commitments available under revolving credit facilities. In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets. On October 17, 2023, JetBlue further amended the Facility to, among other things, extend the maturity date to October 21, 2025.
As of and for the years ended December 31, 2023 and 2022, we did not have a balance outstanding or any borrowings under the facility.
2022 $3.5 billion Senior Secured Bridge Facility
On May 16, 2022, we, along with our direct wholly-owned subsidiary, Sundown Acquisition Corp., commenced a tender offer to purchase all of the outstanding shares of common stock, par value $0.0001 per share, of Spirit at $30.00 per share, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”), which were included as exhibits to the Tender Offer Statement on Schedule TO filed with the SEC on May 16, 2022. In connection with the Offer, on May 23, 2022, we executed a commitment letter with Goldman Sachs Bank USA, Bank of America, N.A. and BofA Securities, Inc. for a senior secured bridge facility in an aggregate principal amount of up to $3.5 billion, which was amended and restated on June 11, 2022 to include other lenders that have committed to the facility (BNP Paribas; Credit Suisse AG, New York Branch; Credit Suisse Loan Funding LLC; Credit Agricole Corporate and Investment Bank; Natixis, New York Branch; Sumitomo Mitsui Banking Corporation; and MUFG Bank, Ltd.). The Offer was terminated concurrently with the entry into the Agreement and Plan of Merger (the “Merger Agreement”) with Spirit.
In connection with the entry into the Merger Agreement, JetBlue entered into a Second Amended and Restated Commitment Letter (the “Commitment Letter”), dated July 28, 2022, with Goldman Sachs Bank USA; BofA Securities, Inc.; Bank of America, N.A.; BNP Paribas; Credit Suisse AG, New York Branch; Credit Suisse Loan Funding LLC; Credit Agricole Corporate and Investment Bank; Natixis, New York Branch; Sumitomo Mitsui Banking Corporation; and MUFG Bank, Ltd. (collectively, the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide a senior secured bridge facility in an aggregate principal amount of up to $3.5 billion to finance the acquisition of Spirit. As of and for the years ended December 31, 2023, and 2022, we did not have a balance outstanding or any borrowings under this facility and the Commitment Parties' commitments were reduced via mandatory reductions to approximately $3.0 billion. Please refer to Note 18 for additional Merger details.