Delta bypasses federal loan option – pledges loyalty program to raise US$9 billion

©Delta Air Lines

Atlanta-based Delta Air Lines (Delta) has announced it is to raise US$9.0 billion, up from a previous estimate of US$6.5 billion, through a series of bonds and loans which will be backed by its SkyMiles loyalty program.

The carrier is currently burning through US$27 million on a daily basis and the capital is being raised to help it weather the storm of the coronavirus pandemic, with estimates of a return to normal air travel not happening for several years.

Having announced earlier this week that Delta would not be looking to take up a federal loan of US$4.6 billion under the Coronavirus Aid, Relief and Economic Security (CARES) Act. However, it still intends to pursue a second round of federal payroll grants. In a similar move, Unite Airline has raised US$5 billion against its MileagePlus loyalty program.

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