The billionaire activist investor Carl Icahn has revealed that he has acquired a nearly 20% stake in embattled US airline JetBlue, saying that he believes shares in the New York-based carrier are undervalued.
Over the last couple of months, Icahn has accumulated 9.91% of JetBlue’s shares and is now hoping to start talks with the airline to gain board representation.
Icahn’s motives for acquiring a stake in the troubled carrier were not immediately clear, and his company has not officially commented on the deal.
JetBlue is facing significant headwinds and has faced stiff opposition from the Biden administration over its plans to better compete with bigger rival airlines.
Last month, JetBlue lost a court battle with the Department of Justice to merge with low-cost carrier Spirit, and late last year, JetBlue was told that its strategic alliance with American Airlines in the North East broke the law.
Rather than appealing the North East Alliance lawsuit, JetBlue pressed ahead with its planned merger with Spirit only to then lose that antitrust suit as well. JetBlue is appealing that verdict.
This isn’t the first foray into the airline industry for Icahn, although his previous endeavours weren’t without controversy. In 1985, Icahn set about acquiring Trans World Airlines, but he was accused of ‘asset stripping’ to repay the money he owed from buying the airline.
In 1991, Icahn sold TWA’s lucrative London routes to American Airlines leaving him with a profit of $469 but TWA with a debt of $540 million.
TWA was forced into Chapter 11 bankruptcy protection in 1992 and the airline was eventually acquired by American Airlines in early 2001.
