As you can see, JetBlue is consistently below Southwest on the ratios. The current ratio has declined from 1.05:1 to 0.94:1. The notes will be unsecured obligations and will rank equal in right of payment with all other unsecured debt. THE FIVE FORCE INDUSTRY COMPETITION• JetBlue has significantly outperformed the industry in most important financial ratios. Position Summary: The Analyst assists Crewleader in understanding cost components and developing presentations for senior management and the Board of Directors.Participates in monthly, quarterly and annual variance reviews and in long term financial management, strategic initiatives and competitive analysis.The Analyst also assists with various ad hoc analyses as … Jetblue Financial Analysis. This option will thus cost more for JetBlue than convertible bonds, especially before the company’s shares price eventually exceeds $63.75. Jet Blue was millions behind the co… JETBLUE AIRLINES MONICA AGRIPPA MARCH 18, 2013 JETBLUE CASE STUDY ANALYSIS 2. The company will thus need a high capital expenditure to support those acquisitions, as well as several related investments. The company is intending to grow heavily in the following years, and has plans to acquire 207 new aircraft for a total $6.86 billion up to 2011. With the large start-up … Profitability refers to the business’s ability to manage earnings in contrast to its … From this analysis, it can be noted that JetBlue will still have a financial position that minimizes the company’s weighted average cost of capital, thus maximizing the overall value of the company’s stock. Quote Stock Analysis News Price vs Fair Value Trailing Returns Financials … At the same time the cost of revenue increased by 14.9% to $1,943 million. JetBlue is a fast growing company, and should thus bear having less debt. Company Registration No: 4964706. John Owen, the Chief Financial Officer of JetBlue, is in charge of finding the best financing scheme for the company. In addition, the company has $5.2 billion of loans secured by 287 aircraft (Delta Airlines Annual Report 2010, p.72). JetBlue is an American low-cost airline and is headquartered in New York City. Morgan Stanley might thus charge heavily JetBlue, and/or try to bias the company’s choice for its benefit. (-2 – below the first quartile; -1 – between the first and the second quartile; Registered Data Controller No: Z1821391. 1 Reply. As I am also an accounting major, I thought I would take a look at Jetblue’s 2011 10K and see what I could decipher. The company’s assets amount to $1,565,322 thousand as per June 2003. As stated earlier, the company revenues knew a high growth for the precedent years and are expected to continue growing steadily. JetBlue stock has more than doubled, as opposed to only a 25% jump in the Dow Jones Airlines Index, since July of 2014. As per June 2003, JetBlue Corporation has a short-term debt of $26,580 thousand, a long-term debt of $731,740 thousand and equity of total $480,594 thousand (Exhibit 5a). 301 certified writers online. The company is intending to grow and become an airline company “like the others”. JetBlue started with two (2) aircrafts that initial provided services at John F. Kennedy (JFK) airport in New York City and Ft. … JetBlue has had a successful business model and strong financial results during that period, and performed well in comparison to other airline companies in the US during the period between 2000 and 2003. Although Jet Blue’s stock dropped by 50% in the five years, revenues grew 185% between 2003 and 2007, their operating expenses grew 222% during the same period. JetBlue, as any airline company, incurs very high fixed costs due to its high value operating property and equipment. In addition, the company does not have any line of credit, or short-term borrowing facility. The company operates only new airplanes, thus minimizing maintenance costs and offering a good “flying experience” to its customers. United Continental Holdings also raises cash from issuance of common stock (United Continental Holdings Annual Report 2010, p.56). Indeed, EasyJet is adopting a conservative capital structure policy, including a liquidity target of £4 million cash per aircraft, and a 50% limit on net gearing (EasyJet Annual Report 2010, p.9). JetBlue might thus lose its advantages from being low-cost, small and highly profitable. The market is impacted by a general economic slowdown caused partly by the terrorist attacks of September 11, 2001. Two other alternatives exist for JetBlue, for the aircraft acquisitions financing: The operating lease and the secured debt (each acquisition debt is secured by the acquired aircraft). A substantial portion of the company’s assets, principally aircraft, are pledged under various loans and other obligations. The fees and commissions of the bank for this proposal amount to $3,591,250 which represents a cost of 3.25%. JetBlue can consider some other alternatives as well. Currently, all of JetBlue’s debt is secured. In addition, the company plans to invest in other domains such as spare parts, new engines, additional hangars and a flight training center. From this study, it appears that the majority of airline companies are financing their aircraft acquisitions, apart from using cash flow generated by operations, through debt, either leases or secured debt. The company needs thus to think about a way to finance those acquisitions, as well as other needed investments such as spare parts, new engines, additional hangars and a flight training center. JetBlue plans to increase its aircraft fleet from 45 to 252. JetBlue Airways Corporation is a low-fare, low-cost passenger airline company serving the US market. The outcomes of those analyses are combined and a recommendation is issued to the Chief Financial Officer of JetBlue: It is recommended that the company issues common stock in order to finance the needed investments in the second half of 2003. The second proposal from the investment banks is to issue $150 million in a private placement of convertible debentures. The company does therefore not have any control restrictions or obligations towards its creditors. The company has a successful business model and exhibits strong financial results, as well as strong revenue growth despite the downturn in the industry following the terrorist attacks of September 11, 2001.