It’s been quite the start for Joanna Geraghty as the new CEO of
JetBlue Airways.
Barely 24 hours into her tenure, the first woman to run a major U.S. airline is facing up to an activist investor campaign from Carl Icahn.
Billionaire Icahn disclosed a 9.9% in the low-cost carrier in a filing late Monday, describing the stock as an “undervalued” and “attractive” investment opportunity.
JetBlue
shares surged 13% in early trading Tuesday and looked set to continue their recent comeback—the stock is currently up for a fourth consecutive day and it has climbed 21% over that period.
It is on track for its biggest daily increase since December last year, according to Dow Jones Market Data. However, the shares remain 21% lower over the past year.
While Icahn said he doesn’t have any plans or proposals for the company, he’s in discussions over possible representation on the carrier’s board.
A spokesperson for
JetBlue
said in an emailed statement to Barron’s: “We are always open to constructive dialogue with our investors as we continue to execute our plan to enhance value for all of our shareholders and stakeholders.”
If that wasn’t enough for Geraghty’s first day in the job, the carrier has also canceled close to 20% of its daily flights scheduled for Tuesday as airlines prepared for a winter storm along the East Coast. JetBlue has canceled 156 flights, the most of any major U.S. airline as of 9.30 a.m. Eastern time, according to data from flight-tracker FlightAware. The airline is heavily exposed to the Northeast of the country. More than 1,100 flights into, within, and out of the U.S. have been canceled Tuesday.
Geraghty’s in-tray, after succeeding Robin Hayes, also includes preparing to appeal a federal judge’s decision to block the company’s proposed merger with
Spirit Airlines.
The Court of Appeals will consider JetBlue and Spirit’s arguments in June ahead of a deadline of July 24 for the deal to be closed.
The carrier has begun planning for a future without Spirit, though, in the event of the appeal being unsuccessful. Geraghty, who previously served as the company’s chief operating officer, said on JetBlue’s fourth-quarter earnings call last month that she would take “aggressive action” to return the company to profitability.
That includes initiatives expected to add $300 million in revenue, and plans to reduce costs by deferring $2.5 billion worth of capital expenditure on aircraft to beyond 2027.
Other airline stocks were lower in early trading as
United Airlines
fell 2.6%,
Delta Air Lines
declined 1.5%,
American Airlines
dipped 1.4% and
Southwest Airlines
was 1% lower.
Write to Callum Keown at [email protected]
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