Investor Carl Icahn Acquires Nearly 10% Stake in JetBlue Airways

Prominent investor Carl Icahn has become a significant shareholder in JetBlue Airways, securing an almost 10% stake in the airline during January and February 2024. The investment, valued at approximately USD119.75 million for 33.6 million shares, positions Icahn as the third-largest investor in JetBlue, trailing only behind BlackRock and Vanguard Group. This strategic move was disclosed in a filing with the Securities and Exchange Commission (SEC), following a period of decline in JetBlue’s stock price by nearly 50% in 2023, attributed to falling revenues and the failed merger attempt with Spirit Airlines.

Icahn, whose acquisition strategy capitalized on the airline’s undervalued shares, views JetBlue as an attractive investment opportunity. Known for his previous controversial tenure as a majority shareholder of TWA – Trans World Airlines in the 1980s, Icahn’s investment history has left a notable mark on the aviation industry. His management of TWA, characterized by asset sell-offs including lucrative route rights to London Heathrow, has been met with criticism for prioritizing personal gain over company welfare, leading to multiple bankruptcy filings and the eventual sale of TWA to American Airlines in 2001.

JetBlue’s welcoming response to Icahn’s investment suggests an openness to engaging in constructive dialogue with investors, as the airline focuses on executing plans to enhance shareholder and stakeholder value. This engagement includes Icahn’s interest in joining JetBlue’s board, reflecting a potential shift in the airline’s strategic direction under the influence of its new major investor.

Despite facing a challenging fiscal year with a net loss of USD104 million in the fourth quarter of 2023, JetBlue remains committed to adjusting its operational strategies. According to Chief Financial Officer Ursula Hurley, the airline anticipates a reduction in capacity and departures in 2024, alongside broader cost-cutting measures and a slowdown in new aircraft deliveries. JetBlue’s fleet, as detailed in the ch-aviation fleets module, currently includes a diverse array of aircraft, from the A220-300s to the A321-200NX(LR)s, underscoring the airline’s commitment to maintaining a modern and efficient fleet amidst financial and strategic recalibrations.

Carl Icahn’s investment in JetBlue Airways signifies a noteworthy development in the airline’s corporate landscape, with potential implications for its future governance, strategic initiatives, and financial performance.