Corporate Raider Carl Icahn Walking Away From JetBlue? Victory Or Grim Future For The Airline?

Update: JetBlue says that the referenced SEC filing below notwithstanding, that Icahn’s stake has not materially changed since February.



With JetBlue struggling, corporate raider Carl Icahn took nearly a 10% stake in the carrier and won the right to appointment members to the airline’s board. Now he’s walking away?

JetBlue has been trying to find revenue, raising bag fees multiple times this year (and not telling anyone when they did so, and even introducing variable bag fees) and trimming their route network (especially Los Angeles, and off-season Europe).

But they haven’t come up with anything significant yet. They don’t have likely opportunities for a merger or sale. They’ve even lost both a partnership and a merger to Biden administration anti-trust lawsuits in the last year.

There’s even been concern that JetBlue could devalue its miles to pretty up its balance sheet in order to appease Icahn – and forestall a tender offer, takeover of the airline, and potentially selling off pieces like slots in New York, DC and London.

It looks like Carl Icahn may be walking away from the airline. JonNYC notes that he’s trimmed his stake down to 5%.

Icahn doesn’t appear likely to launch a tender offer for a company whose shares he’s selling. With less ownership, he’ll be less of a threat and won’t have the same say in the boardroom.

At the same time it signals that he no longer sees the same potential for the airline’s stock price to recover. Other investors will likely assume that, having had a look at the inside, he has a smart appraisal of their prospects. JetBlue stock was down 4.25% today, on a day the market was broadly and strongly up (and Delta shares gained).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “Struggling” is an interesting choice of wording: “Disintegrating”, “Imploding”, or “Collapsing” may have been more accurate.

  2. They need to stop selling cheap seats and start selling seats like a real airline, they might not be in such trouble, they can go under as far as I am concerned

  3. Ichan is a POS and like Frank Lorenzo, he never should have been allowed to play a party on any other airline after he screwed one after another, especially TWA. He then stayed playing the get rich, screw employees and customers in time share.

    Watching airlines file for CH 11 or worse dissolve over the years just screws the employees and customers and leaves those at the top filthy rich. Welcome to capitalism without checks and balance. After 47 years in the industry I just see it getting worse everyday.

  4. My take, he actually saw they will survive and probably find their footing. That makes buying the rest an expensive process in the hope of an eventual liquidation of assets or sale to another.

  5. Stuart, here’s hoping you are right but their Financials are trending in the wrong direction and it looks very bleak. If they have a great summer, they should be able to make it into 2025, but they are definitely going to be closing more stations and layoffs are inevitable.

  6. @Stuart
    So your take is: He got an inside view, saw they would succeed, and then decided to sell now, before they succeeded and the stock goes up?

    Your takes are dumbing down humanity, please take less.

  7. When JetBlue files for bankruptcy, it will be yet another in a long line of Biden administration failures for blocking an acquisition that would have created a viable competitor to the big 4. You Dems still happy about hitching your wagon to that senile star?

  8. Icahn bought cheap in January and February. He stands to make tens of millions selling half of his position even at this time and he could have made more if he sold when it was over $7. I put up another post with a link to the story from February but it is not here.

  9. To whom did the 5% get sold?

    Either way, Icahn’s old and doesn’t have much time or the opportunity to play out with this airline like he did with another.

  10. Its ok to dump on Carl Icahn but save your anger for Lina Khan and the FTC. Jet Blue and American had a perfectly viable, non-threatening partnership.

  11. As per my crystal ball:
    – Mr “Fake News” wins and takes the oath in the prison yard
    – Stormy Daniels holds the Bible because Melania has split by now
    – Alaska drops Hawaiian, makes bid for JetBlue
    – DOJ reverses opinion on NEA alliance and approves AS+B6 merger
    – Resulting airline (AlaskaBlue) becomes #4 and SW falls to #5 due to fist fights over “reserved” seating and early boarding issues
    – Spirit, Breeze, & Frontier merge to become the “Mega ULCC” carrier of North America
    – AA and UA shed coverage due to continuing Boeing issues
    – Over the objections of Tom Dunn, Icahn gains control of the Widget

  12. Icahn has dubious reputation but he is also not a novice. He likely saw what B6 is (a mess, with a lot of assets like slots, gates, and planes) all deployed in ways that are not economical and with little opportunity to monetize. B6 doubling down on Caribbean flying is a sign it is desperate. The market is saturated, with low yields. B6 has virtually no corporate traffic. It’s TATL network is a vanity project. The airline is headed for some sort of consolidation and I don’t think it will be AS. While stitching together AS and B6 does create a true national carrier, the problem is B6’s profitability (lack thereof) and the limited opportunities. B6 is, like Frontier and Spirit, in a slow and steady downward spiral. B6’s assets get carved out slowly until it exists no more. The carve out will be across the US3 with AA and UA splitting the spoils at JFK (UA much, much less so, but it finally gets back in meaningfully, and gets the South Florida hub it craves in FLL or MCO). Delta gets the divestiture scraps but little more since it already has an outsized presence at both LGA and JFK.

  13. Given the circumstances and at least in comparison to what went on under the previous 3 Presidents, the FTC under Lina Khan has been a great friend of consumers

    Mantis just wants his Lord — you know the draft dodging guy who said STDs were his personal Vietnam — back as President. That’s sick but unexpected. Anyone else curious why his Lord T-Rump is exhibiting signs akin to syphilis-related brain damage and a bad hit of toxoplasmosis? And yet he wants that sick traitor with obesity-damaged arteries and a damaged brain back as President. Biden inherited a mess from Mantis’ Lord, and yet the US economy has recovered well and stabilized under Biden. The stock market is up big time despite the higher interest rates and unemployment is very low. Seems like the country is up for an economic soft landing despite the messes Trump created at home and abroad, but I expect Trump to crash things when he defeats Biden in November — assuming that both of those guys manage to live long enough to be alive on Election Day this coming November.

  14. IIRC, Icahn had two “non-voting” observers on the JetBlue board.
    This mitigated any influence he had:

    “…will join the airline’s board of directors. Lynn and Miller will serve as non-voting observers to the board….”

    As per JetBlue press release dated 02/16/2024

  15. Exit Row –

    These were to be fully vested voting seats at the May 17th annual meeting.

  16. MISINFORMATION

    Ichan’s investment in JetBlue has not materially changed

  17. Poor B6 and Spirit are on a one way ticket to Chapter 11 and/or being parted out by the Big Guy. Total snow job by the current administration.

  18. Captain,
    you do realize that ALL of the big 3 and their merger predecessors have been through chatper 11 bankruptcy at least once?
    Not sure why you think B6 and NK will be “parted out” even if they need to restructure under chapter 11 which is what they legacies did.

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