United Airlines borrows US$2 billion to pay costs as Trump bans European flights

©United Airlines

United Airlines Holdings Inc (United Airlines) has confirmed that it has entered into a US$2 billion term loan facility to be repaid on its maturity date of March 8, 2021. The carrier has indicated that the funds are to be used to pay certain transaction fees and expenses, and for general corporate purposes.

Currently, airlines are being hard hit by the effects of the COVID-19 coronavirus outbreak with a dramatic downturn in demand. United Airlines share value has fallen 38% over the last 12 months, and dropped 12% premarket on the announcement of the loan agreement. U.S. carriers have also been heavily hit by the latest announcement by Donald Trump, the U.S. President, banning most European flights. The move is being seen as a political one rather than purely for disease control as the U.K and Ireland are not included in the ban, despite the U.K. reporting many more cases of the virus than several ‘blacklisted’ European countries.

Former Finnish prime minister Alexander Stubb wrote on Twitter: “Viruses do not recognize borders. Decisions should be based on facts, not politics.” Share prices on both sides of the Atlantic dropped sharply on the news of the European – U.S. flight restrictions.

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