Moody's has invested JetBlue Airways to a B2 rating from B3, citing the airline's strong financial results and its future growth plans.
"We believe that credit metrics will further strengthen in 2014," says Moody's senior credit officer Jonathan Root. "Industry fundamentals will remain favourable, allowing JetBlue to avoid sacrificing unit revenues to maintain load factors as it continues to grow capacity in excess of 5% annually."
Moody's believes that JetBlue's recent sale of its LiveTV unit to Thales will boost the airline's liquidity. "These proceeds can be used to fund the purchase of some of the nine A321s scheduled for delivery in 2014, repay debt or both, helping to limit any increase in adjusted debt," says Moody's.
JetBlue sold LiveTV for $400 million, and expects to close the transaction in mid-2014.
"The demonstrated operating and financial performance accruing from its network expansion anchored from its existing focus cities of Boston and New York, competitive profit margins and recent focus on de-levering the balance sheet represent a stronger credit profile that warrants the B2 Corporate Family rating," says Moody's.
The ratings agency adds that it also expects JetBlue's plans to add service to the Caribbean and Latin America, such as from focus city Fort Lauderdale, will contribute positively to the airline's operating results.