JetBlue defers 2010 deliveries

Washington DC
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JetBlue has opted to defer three A320 deliveries it originally had scheduled for next year to 2011 to curb its capital expenditures to modest levels.

Just last month the carrier's management said it had started looking for aircraft financing, but during an earnings call today carrier CFO Ed Barnes said JetBlue is deferring the aircraft to better manage capacity and reduce its cash requirements in the near term. Company CEO Dave Barger also cited tight credit markets as another reason for deferring delivery of the narrowbodies.

The carrier took delivery of six Embraer E-190s and three A320s during the first half of 2009 for a total of nine aircraft, and no deliveries are scheduled for the back half of the year. JetBlue has extended leases on two A320s whose terms were set to expire at the end of 2009 and in 2010.

Similar to most airlines JetBlue moved to shore-up liquidity during the second quarter, raising $300 million from an equity and convertible debt offering. Additionally, during the quarter and also in July the carrier has moved to reduce debt by repurchasing roughly three million of convertible notes that Barnes says will likely be put to the carrier in March 2010. The original principal balance was $250 million, but the carrier has reduced that amount to an outstanding balance of $158 million.

Part of JetBlue's rationale for building up liquidity is to position itself to buy distressed assets if they become available. Barger says the most attractive assets to the carrier are airport gates and slots, and "it's no secret" JetBlue has previously expressed an interested in serving Washington National airport.