JetBlue shares surge as Spirit Airlines threatens to close operations

TLDR

• JetBlue (JBLU) saw a jump of up to 10.9% on Friday following reports that Spirit Airlines is getting ready to halt its operations.
• Frontier Airlines (ULCC) also climbed 8.8%, as both carriers are viewed as potential beneficiaries of Spirit’s downfall.
• A Wall Street Journal report indicated Spirit’s government rescue deal has fallen through, with bondholders refusing to support the plan.
• Susquehanna raised its price target for JBLU from $4.00 to $5.00, while maintaining a “neutral” rating on the stock.
• JetBlue’s latest quarterly earnings missed expectations, with an EPS loss of -$0.87 compared to the consensus estimate of -$0.72.

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(SeaPRwire) –   JetBlue recorded a sharp gain on Friday after a Wall Street Journal report stated Spirit Airlines is preparing to cease operations. The stock traded as high as $5.17, marking an approximate 10.9% increase for the day relative to its previous close of $4.66.

JetBlue Airways Corporation, JBLU

Frontier Airlines rose 8.8% on the same news, as traders shifted to carriers that could gain market share if Spirit exits the market.

The Journal reported that a planned U.S. government rescue deal for Spirit has collapsed. Bondholders did not back the proposed plan, leaving the ultra-low-cost carrier with few visible options.

Spirit had been struggling long before this point. The airline had already gone through a failed merger attempt with JetBlue (blocked by regulators) and was dealing with mounting debt and weak demand in the low-end market segment.

For JetBlue, the news came on a day when it was already receiving some analyst attention. Susquehanna lifted its price target for JBLU from $4.00 to $5.00 while keeping a “neutral” rating on the stock.

That said, overall analyst sentiment remains cautious. Seaport Research upgraded JBLU to “Buy” with an $8.00 target in April, while Goldman Sachs and UBS both rate the stock “Sell” with targets of $3.50. The average analyst price target is $4.88, with the consensus rating at “Reduce.”

JetBlue’s Financial Picture Remains Difficult

JetBlue’s latest earnings report, released on April 28, showed the airline is still losing money. The company posted a quarterly EPS loss of $0.87, missing the consensus estimate of -$0.72 by $0.15.

Revenue came in at $2.24 billion, in line with estimates and up 4.7% year over year. However, the airline has a debt-to-equity ratio of 4.25 and a negative return on equity of 32.76%.

Analysts currently expect JetBlue to post a full-year EPS of -$2.37. The stock has a market cap of roughly $1.95 billion and a beta of 1.75, meaning it tends to move more than the broader market.

Spirit’s Collapse Could Shift Competitive Dynamics

Spirit has been a disruptive force in budget air travel for years, often pushing legacy and hybrid carriers to respond on pricing. Its exit, if confirmed, would remove a major source of low-fare competition on many domestic routes.

JetBlue and Frontier overlap with Spirit on numerous routes, particularly in Florida, the Northeast, and major Sun Belt markets.

Trading volume for JBLU on Friday was around 4.75 million — about 80% below its average daily volume of 24.3 million — suggesting this surge was not broadly driven but a reaction concentrated in a shorter trading window.

The stock’s 50-day simple moving average stands at $4.85 and the 200-day at $4.86. Friday’s high of $5.17 pushed it above both levels for the first time in recent sessions.