JetBlue Airways Corp (JBLU)

[Pennylanepam]

Thanks to improved operations and less debt, Standard & Poor's Ratings Services raised its credit rating on the airline to B+ from B on Tuesday. JetBlue's debt-to-EBITDA measure is 2.9x. S&P credit analyst Betsy Snyder said in a release:

Our upgrade on JetBlue reflects its improved operating performance and reduced debt, which have strengthened the company's credit measures.

JetBlue announced this week it is expanding routes from Baltimore and Philadelphia to Florida and between Florida and Mexico City this fall. Last week it announced plans to fly to Ecuador next year.

Standard & Poor's also says in the release:

We could raise our ratings on JetBlue if the company's operating performance continues to improve, based on higher than expected revenue growth, and it continues to reduce its debt, increasing its FFO-to-debt ratio to over 40% on a sustained basis.

Although unlikely, we could lower the ratings if JetBlue's operating performance is affected by weaker-than-expected demand and/or substantially higher fuel prices, causing the company's FFO-to-debt ratio to fall below 20% on a sustained basis.

Nonetheless, JetBlue's stock was down about 4% Wednesday morning. Other airlines were falling in price as well.