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JetBlue’s Second-Largest Investor Pressures Airline: Could Sell Stake If There Are No improvements

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JetBlue Airways is facing mounting pressure from one of its largest shareholders. Vladimir Galkin, the airline’s second-largest investor and a Miami-based financier, has warned that he may sell his nearly 10% stake if cost-cutting measures and broader efforts fail to reverse the company’s struggles.

A High-Stakes Investment

Galkin, known for capitalizing on the “meme stock” rally like GameStop in 2021, invested over $200 million in JetBlue between February and August 2024. He currently holds approximately 35 million shares, representing a $212 million investment, as confirmed to Reuters.

The timing couldn’t be worse: JetBlue’s stock has plummeted 43% year-to-date, far outpacing losses at rivals like Delta (-17%) and United (-18%). Compounding the challenges are weakened travel demand and the airline’s decision to withdraw its full-year earnings forecast.

JetForward Plan: A Last-Ditch Effort to Restore Profitability

In June, JetBlue reiterated its JetForward plan, a multiyear strategy aimed at achieving $800 to $900 million in earnings before interest and taxes (EBIT) by 2027. The company emphasized that recent cost-saving measures align with this plan and reflect its ongoing commitment to reducing expenses, particularly amid declining consumer spending in the sector.

Galkin welcomed the announcement but cautioned that the “trajectory will become clear in the coming quarters.” Among his suggestions, he proposed trimming the size of the board (currently 13 members) as part of an efficiency drive, though he did not specify further measures.

→ JetBlue Introduces New Baggage Tracking and Location Features with Apple

No Buyers in Sight

JetBlue’s future remains uncertain. The airline has reported profits in only two of the last nine quarters. As of May 23, according to LSEG data, 10 equity analysts recommended holding the stock, five issued “sell” ratings, and two advised “strong sell.” None recommended buying.

Despite this, Galkin has not set a definitive deadline to sell his stake. “I’m a bit underwater and will have to hold on. I don’t want to say it’s forever, but maybe for another year,” he stated, expressing hope that the company would start generating profits “sooner rather than later.”

Alliances and New Commercial Approaches

One factor Galkin believes Wall Street underestimates is JetBlue’s future collaboration with United Airlines. Starting in 2027, travelers will be able to book flights on both airlines’ websites—a synergy that could unlock new business opportunities.

Meanwhile, JetBlue announced this week the introduction of business-class seats on its Orlando-to-Las Vegas route, joining carriers like Spirit in betting on premium services to boost revenue.

“It’s positive in the sense that they’re not ignoring reality,” said Michael Matousek, head trader at U.S. Global Investors, a firm holding a 1.4% stake in JetBlue via the JETS ETF. In his view, abandoning unprofitable routes and prioritizing higher-margin ones is a sound long-term strategy.

JetBlue stands at a crossroads. If its measures fail to deliver tangible results soon, it risks losing the support of a major shareholder at a critical juncture in its recovery.

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