Carl Icahn, the renowned corporate raider and activist investor, has secured board seats on JetBlue Airways following a significant investment in the airline. This move comes after Icahn disclosed a nearly 10% stake in the New York-based airline and expressed his intention to have representation on the board.
The two new directors appointed by Icahn are Jesse Lynn, the general counsel of Icahn Enterprises, and Steven Miller, a portfolio manager of Icahn Capital. This announcement has already had a positive impact on JetBlue’s stock, with shares rising approximately 4% in after-hours trading.
Icahn’s investment in JetBlue is not his first foray into the airline industry. In the late 1980s, he famously took TWA private, but the airline struggled and eventually filed for bankruptcy. Despite TWA’s failure, Icahn remains confident in JetBlue’s potential and believes that its shares are undervalued. Over the past year, JetBlue’s stock has declined by more than 19%, while the broader NYSE Arca Airline Index has experienced a 7% increase.
JetBlue recently appointed Joanna Geraghty as its new CEO, and she assumed her role on Monday. In an effort to steer the airline back on track, JetBlue has also brought in a pair of seasoned industry veterans. The company is determined to leverage its distinct brand and unique value proposition to deliver value to shareholders and all stakeholders. Geraghty expressed her enthusiasm for the contributions that the new board members will bring to the table.
However, JetBlue faces significant challenges as it strives to regain profitability. The airline has not posted a profit since before the pandemic, and it has been implementing cost-cutting measures to improve its financial position. Additionally, JetBlue’s plans for a merger with budget carrier Spirit Airlines were blocked by a federal judge who cited reduced competition as the reason for the ruling. Despite this setback, JetBlue and Spirit are appealing the decision in hopes of moving forward with the merger.
As JetBlue navigates through these obstacles, the addition of Carl Icahn’s representatives to the board may bring fresh perspectives and strategies to help the airline overcome its current difficulties. With Icahn’s track record of activism and his belief in JetBlue’s potential, investors will be closely watching the airline’s future developments.
