David J. Blount, CFP®
LPL Financial Advisor
Billionaire investor Carl Icahn, known for his aggressive tactics, recently purchased two seats on JetBlue’s Board of Directors. That means he’s now a 10% owner of the company. Given Icahn’s dark history with Trans World Airlines (TWA), JetBlue pilots and crew members are understandably concerned about their future.
Let’s dive into the details of Icahn’s return to the airline industry, the possible objectives and consequences of his purchase, and how professional financial planning can ease JetBlue pilots' and crew members’ fears.
Icahn's Return to Airlines and the Shadow of Past Deals
Icahn’s record with airlines is checkered. Most savvy observers agree that, like he did at TWA, Icahn invests in businesses he believes are being mismanaged and undervalued to turn them around and get rich.
In the 1980s, he acquired TWA and implemented significant cost-cutting measures. Things were looking up at the beginning of his tenure, and through a merger with Ozark Airlines, he cemented TWA’s position in the industry as the leading carrier in the St. Louis region.
But then the bottom fell out. His decision to take TWA private was the ultimate death sentence for the airline. TWA was straddled with $540 million in debt, while Icahn came out of it smelling sweet and cashed in on $469 million.
Workers at TWA and some analysts blame Icahn for undermining the company’s long-term health with his emphasis on short-term profits. He’s generally regarded as the man who killed TWA because of his own self-interest.
Potential Outcomes: Should JetBlue Pilots and Crew Members be Worried?
Given Icahn’s involvement with TWA, JetBlue pilots and crew members are justifiably spooked. Worries about job cuts, reduced benefits, and shifts in company culture loom large. But it’s not clear yet what Icahn’s intentions are. Maybe his objectives are well-intentioned. He could simply be looking for an investment opportunity, a possible merger partner, or optimistic reforms for the airline. Who knows?
But pilot and crew members’ concerns about more nefarious goals continue to swirl. Will Icahn push for similar cost-cutting measures to those he implemented at TWA? Will he kill the airline by focusing on his own profit agenda? Again, no one knows for sure.
What is certain is that like most unpredictable situations, the smartest move here is to get your ducks in a row.
Financial Advisors Can Help Pilots and Crew Members Navigate Uncertainty
Overall, Icahn’s return to the airline industry with JetBlue has raised some serious doubts. While there are undeniable benefits and drawbacks, JetBlue pilots, crew members, and the entire industry will be watching to see how this plays out.
The good news is that while uncertainty persists, an experienced financial planner can help JetBlue pilots and crew members evaluate their current financial status, investigate options in case of a job loss, and create a customized plan for a stable financial future.
An even better solution is finding a financial advisor, preferably a CERTIFIED FINANCIAL PLANNER™ who has specialized knowledge working with JetBlue pilots and crew members. An advisor who’s familiar with the financial nuances of the airline industry in general, and JetBlue in particular, can help ease concerns by doing the following:
Review budget: Examine your current budget and create a more realistic budget that’s aligned with the uncertainties of your current situation.
Clarify insurance options: Help you incorporate a safety net into your financial plan that can help keep you and your family shielded.
Explore benefits: Explain alternative benefits like COBRA, unemployment compensation, and severance package details.
Manage Debt: Elucidate the benefits of consolidating high-interest-rate debt and reducing monthly payments.
Strategize retirement: Guide you in devising a plan that supports an efficient financial plan for your retirement goals.
While still employed, consider the following planning considerations for future preparation.
Diversify some of your 401K savings outside of JetBlue with a PCRA account.
Develop strategies for making the JetBlue Employee Stock Purchase Plan (ESPP) work for you.
Accumulate savings and investments outside of retirement plans for future contingency planning.
Do Yourself a Favor
Work with a financial advisor who’s already fully immersed in helping JetBlue pilots and crew members make informed financial decisions. Whether you’re looking for guidance on contingency planning, making a career or airline change, or retirement options, our team at Investment & Insurance Planning Services is ready to work with you to build the financial plan that best meets your unique needs.
To schedule a complimentary call to discuss your current concerns, learn about our Invest Sure Process, and see if our services are a match for your needs, contact us today at service@davidblountIIPS.com or (407) 542-3249. You can also send us a message here.
For additional resources like this, check out our dedicated JetBlue web page here.
About David
David Blount is President and CEO of Investment & Insurance Planning Services, LLC (IIPS), an independent and fee-based firm that helps clients establish their financial goals and creates custom financial plans to help them pursue those goals. They specialize in working with pre-retirees, individuals in a career transition, L3Harris engineers, and JetBlue pilots. David’s motivation comes from seeing his clients pursue their goals. He says, “It’s very rewarding to help people make successful transitions from one career to another, start a small business, or retire.”
David received his bachelor’s degree from Troy University, and before becoming a financial planner in 2000, he had a nine-year career in the United States Coast Guard. He obtained the CERTIFIED FINANCIAL PLANNER™ designation in 2007. He has served as the guest financial specialist on Orange Television’s Adult Lifestyle Magazine Show and frequently provides financial and retirement planning workshops. Outside of work, he enjoys spending time with his wife, Michelle, their two kids, Ryan and Alana, their dog, Jack, and visiting with friends. An avid outdoorsman, he enjoys fishing, hiking, and exercising, and as a committed person of faith, he enjoys attending church and is passionate about helping people in his community. To learn more about David, connect with him on LinkedIn.
This material was prepared for David Blount’s use.
The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.