JetBlue’s European Ambitions Face Critical Test in Lisbon Dispute

As JetBlue Airways continues its operational recovery, a high-stakes confrontation over European airport access threatens to undermine its transatlantic expansion strategy. The airline has taken the extraordinary step of threatening legal action against Portugal in a dispute over valuable landing rights at Lisbon Airport—a battle that could determine the carrier’s future in the European market.

Operational Turnaround Shows Measurable Progress

The airline’s “JetForward” operational overhaul program is delivering tangible results, contributing an additional $15 million in EBIT during the first half of the year. Implementation of advanced technologies including FlightAware Foresight aims to boost profitability through improved on-time performance and reduced operational disruptions.

Recent quarterly results presented a mixed picture:
* Earnings per share of (-$0.16) exceeded expectations of (-$0.31)
* Revenue reached $2.36 billion, surpassing projections
* Concerns remain regarding the negative margin of 4.22% and negative return on equity

The newly approved “Blue Sky” partnership with United Airlines could provide additional momentum, potentially contributing $50 million toward JetBlue’s EBIT target of $850-950 million by 2027.

Should investors sell immediately? Or is it worth buying JetBlue Airways?

Institutional Investors Position for Recovery

Major investment firms are adjusting their positions in anticipation of continued recovery. Nuveen LLC recently established a significant position with 1.27 million shares valued at $6.13 million. Connor Clark & Lunn Investment Management Ltd. demonstrated even stronger conviction, increasing its holdings by 85%. Conversely, Capital Fund Management S.A. reduced its stake by 60.9%. Institutional investors collectively maintain 83.71% of shares outstanding, indicating sustained professional interest in the carrier’s prospects.

Lisbon Slot Dispute Escalates to Legal Threat

The conflict over landing slots at Lisbon Airport has emerged as a significant strategic concern. JetBlue alleges that Portugal has systematically obstructed U.S. flight operations, citing consistently denied slot requests since 2023. The airline has already terminated its partnership with TAP Air Portugal in response to the ongoing dispute. Should the situation intensify, it could jeopardize JetBlue’s entire European expansion strategy and block valuable growth opportunities in the transatlantic market.

Engine Challenges Show Encouraging Resolution

On the technical front, positive developments are emerging regarding the Pratt & Whitney engine issues. The number of aircraft grounded due to engine problems is expected to remain below ten through 2025—significantly better than initially projected. While 2025 will likely mark the peak of operational disruptions, relief is anticipated beginning in 2026, with a complete resolution expected by late 2027.

Despite facing European regulatory hurdles and financial headwinds, JetBlue’s recovery trajectory appears to be gaining institutional support. The airline now faces the challenge of executing its strategy amid growing operational and legal complexities.