Jet Blue, Case Study Example

How much debt does JetBlue report that is coming due within the next year?  The next five years?  How much of this debt coming due is related to capital leases?  Is JetBlue in violation of any of its debt covenants?  Are there any other items disclosed that concern you?

Few items concern me such as the hedging and expenses of fuel. The company has managed to contain volatility through hedging of fuel. It has employed FFPs to hedge the consumption of fuel, leading to reduced prices of fuel. Following this form of control, the company still made some losses of $3 million. The company is still optimistic that over the coming six years, it will manage to pay capital lease of $470.

If JetBlue had issued non-convertible debt instead, how would the financial statements differ?  If JetBlue were reporting under IFRS, how would the financial statements differ?  (Be as specific as possible even if you have to make some assumptions).

The financial statements would differ because the non-convertible cannot be changed into any form of shares of the JetBlue. The change will be evident because the interests will be much higher, while compared with the convertible debts. If the company were making report-using IFRS, it would be different because mostly, it would want to set a trend that would welcome global investors. The investors would have a chance to compare the figures with those of other countries such as Canada, Australia, brazil and china among others.