S&P Global Ratings and Moody's have downgraded their ratings on JetBlue Airways following its announcement that it will issue a total of $3.15 billion in new debt. JetBlue plans to launch a private offering of $1.5 billion of senior secured notes due 2031, and a $1.25 billion senior secured term loan B due 2029. The notes and term loan will each be guaranteed by "certain subsidiaries" of JetBlue, the airline says in a 12 August announcement. The New York City-headquartered company adds that the notes will be secured on a pari passu basis with the loyalty term loan, including a first-priority lien on the core assets of JetBlue's customer loyalty programme, TrueBlue. JetBlue will use the net proceeds for general corporate purposes. In a separate announcement, the airline said it intends to offer $400 million of convertible senior notes due 2029. It also expects to grant to the initial purchasers of the notes an option to purchase, within a 13-day period from and including the date of original issuance of the notes, up to an additional $60 million of notes. JetBlue intends to use the net proceeds from that offering to repurchase a portion of its existing 0.50% senior convertible notes due 2026 in "one or more transactions, subject to prevailing market conditions", and to pay fees and expenses related to the offering and "incurred in connection with such repayment". It will use any remaining net proceeds for general corporate purposes. S&P downgraded JetBlue's issuer credit rating from 'B' to 'B-', citing the debt issuance, challenges such as excess industry capacity, higher labour costs, infrastructure constraints and aircraft groundings due to engine issues. "We expect negative free operating cash flow burn of about $1.7 billion in 2024 and about $1.2 billion in 2025," it says. Despite the downgrade, S&P maintains a stable outlook, anticipating that liquidity from the loyalty financing will help mitigate JetBlue's ongoing negative cash flow. Over the longer term, the agency expects performance to gradually improve with industrywide capacity moderation and strategic initiatives such as its pivot toward premium offerings and network reconfiguration. "While we acknowledge management's clear pivot toward profitability and expect improvement over our forecast period, we do not expect these initiatives to translate into significant improvement over the next 12-18 months," the agency notes. Meanwhile, on 12 August, Moody's downgraded JetBlue's corporate family rating to 'B3' from 'B2', as well as its probability of default rating to 'B3-PD' from 'B2-PD', and its existing senior secured bank credit facility rating to 'B2' from 'Ba3'. Moody's also assigned a 'B1' rating to the secured term loan and secured first lien notes. The company's speculative grade liquidity rating of 'SGL-3' is unchanged by Moody's and its outlooks are stable. "The downgrade of the corporate family rating reflects our view that restoring operating profit and cash flow to levels that would lead to materially stronger credit metrics will require a number of years," the ratings agency says. "Earnings will continue to be pressured by the current operating environment, including increased competition in key markets along the US East Coast, higher demand for premium products and the inability to match cost inflation with revenue growth." JetBlue's shares lost about 20% of their value on the announcement of the deals, having closed at $6.05 per share at the end of last week on 9 August. As of 18:30 (Eastern time) on 12 August, shares were trading for $4.76.

Boeing's new president and chief executive Kelly Ortberg has promised in a letter to employees that he will be "transparent with you every step of the way, sharing news on progress as well as where we must do things better". "I can't tell you how proud and excited I am to be a member of the Boeing team," Ortberg writes in the 8 August letter which Boeing shared on its website. "While we clearly have a lot of work to do in restoring trust, I'm confident that working together, we will return the company to be the industry leader we all expect." Ortberg said that restoring trust "starts with meeting our commitments – whether that's building high quality, safe commercial aircraft, delivering on defence and space products that allow our customers to meet their mission, or servicing our products to keep our customers running 24/7. "It also means meeting our commitments to each other and working collaboratively across Boeing to meet our goals. People's lives depend on what we do every day, and we must keep that top of mind with every decision we make." Ortberg says he plans to be based in Seattle so he can be close to the company's commercial aircraft programmes, and made mention of the fact that he would be visiting the Renton facility that assembles the 737 Max the day the letter was released to review safety and quality plans and engage with staff. He concludes: "Throughout my career in aerospace over the last three decades, I have had the pleasure to work with The Boeing Company and I've always been impressed with the great employees here. We have what it takes to win, and I'm committed to working with you to focus the company in a way that makes us all proud to be a part of Boeing."

Ethiopian Airlines has signed a contract with Dar Al-Handasah Consultants to develop a "mega airport city" in Bishoftu.
The carrier says that the new project, in collaboration with Zaha Hadid Architects, will have the capacity to accommodate 110 million passengers per year, which is four times the current throughput of Addis Ababa Bole International airport, from which the new airport is 40km removed. The first phase, accommodating 60 million passengers, is set to be completed by 2029. The project includes a 1.1 million sqm terminal, extensive airline support facilities, and over 100,000 sqm of cargo and airport support infrastructure. The new airport will be located at a lower elevation than Addis Ababa, which is one of the world's most elevated airports, presenting what Ethiopian calls "unique operations challenges" for aircraft. Ethiopian Airlines Group chief executive officer Mesfin Tasew states: "The project will not only enhance connectivity but also drive economic growth and prioritise environmentally responsible practices in our country and beyond, reflecting the airline's commitment to innovation and sustainability."