Originally Posted by
FriendlyPilot
CH11 doesn't make Jetblue a "more attractive merger target" any more than either of the two Spirit CH11 made it more attractive.
Most of Jetblue's $8.5B in debt is secured, which means its tied to the planes. If Jetblue wants to lower their debt, its going to have to give back a lot of planes. They don't just get to write it off and keep the assets. I can't imagine anyone right now that would want to take on all that debt. Jetblue has the highest debt compared to its market share and RPMs of any other airline.
If no one wanted Spirit and their $2B in debt then I can't imagine anyone wanting to take on Jetblue and its $8.5B in debt (and growing). No chance F9 can borrow enough money to buy B6. They are already have a high risk credit rating and Jetblue's credit rating is deep junk.
In Ch.11 secured lenders might well negotiate a reduced rate to facilitate a merger, if they don't really want to repo hundreds of planes and try to re-home them in potentially a down market (depends a lot on market conditions). Other obligations could be re-negotiated as well.
An acquisition by a stronger carrier is appealing to creditors, since it can improve what was an iffy long-term ROI to one that looks more reliable.
Ch.11 definitely puts creditors on notice that it's time to negotiate, and stock value would be low, that's appealing to potential buyers.