JetBlue considers no external financing on A320s

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JetBlue Airways says it may fund its remaining Airbus A320 deliveries scheduled through December this year using its cash balance.

Debt financing has been arranged for its remaining Embraer 190 firm aircraft due in December this year but JetBlue may opt for no external financing on its four A320s scheduled in September, October, November and December.

"We may pay cash for the remaining deliveries scheduled in 2012, unless debt financing is available on favourable borrowing terms relative to our weighted average cost of debt," it said in a 10-Q filing.

During the second quarter, JetBlue fully pre-paid the outstanding debt on five A320s, which we now own free and clear, and two Embraer 190s, which we sold during the quarter. "This action will not only reduce future interest expense, but helps manage our cost of capital. Despite this approximately $170 million pre-payment, our liquidity remains strong," it comments.

The carrier had $652 million in cash and cash equivalents at the end of the second quarter, up from $575 million in last year's corresponding period. Long term debt and capital lease obligations totalled $2.6 billion, down from $2.9 billion at the end of the second quarter of 2011.

Last month the US carrier also extended the leases on three A320 aircraft, leases which were previously set to expire in 2013.