In a move to regain profitability and stability, JetBlue Airways has announced that activist investor Carl Icahn has won two seats on its board of directors. This comes after Icahn disclosed a nearly 10% stake in the struggling airline and initiated talks for board representation.

The newly appointed directors are Jesse Lynn, general counsel of Icahn Enterprises, and Steven Miller, a portfolio manager of Icahn Capital. Following this announcement, JetBlue's stock experienced a 4% surge in after-hours trading, reflecting investor confidence in Icahn's involvement.

Despite his controversial history in the industry, including the ill-fated privatization of TWA in the late 1980s, Icahn expressed his belief that JetBlue's shares are currently undervalued. The airline's stock has seen a decline of over 19% in the past 12 months. In contrast, the NYSE Arca Airline Index, which tracks the broader sector, has risen approximately 7% during the same period.

JetBlue's new CEO, Joanna Geraghty, who took the helm earlier this week, has emphasized the need to cut costs and restore reliability. The airline has not posted a profit since before the pandemic hit, and its efforts to recover have been hindered by a surge in travel demand after COVID-19 restrictions eased, as well as a blocked merger attempt with budget carrier Spirit Airlines.

A federal judge recently ruled against the proposed merger, citing concerns of reduced competition in the industry. JetBlue had argued that the tie-up was necessary to compete against the larger American carriers. Both JetBlue and Spirit Airlines are currently appealing the judge's decision.

Geraghty expressed her optimism about the new board members' contributions towards achieving the company's shared goal of delivering value to shareholders and stakeholders. JetBlue's immediate focus will be on leveraging its distinct brand and unique value proposition to regain its financial footing.

As the airline industry continues to grapple with the challenges posed by the pandemic, JetBlue's partnership with Icahn is seen as a strategic move to navigate the turbulent market. With Icahn's expertise and experience, coupled with Geraghty's leadership, JetBlue aims to overcome its financial struggles and regain its position as a leading player in the industry.