
United Airlines on Monday said it's using its frequent flyer program to back a new $5 billion loan, as the carrier seeks to shore up liquidity as coronavirus weighs on demand.
By the end of the third quarter, United expects to have an $17 billion in available liquidity, thanks to an anticipated $4.5 billion federal loan under the CARES Act and the $5 billion term loan facility secured by its MileagePlus program.
The airline expects to slow its cash burn from $40 million a day on average in the second quarter to $30 million a day in the third quarter. United's new CEO Scott Kirby told investors on a May 1 earnings call that the airline entered the second quarter burning about $50 million a day.
American Airlines said last week that an uptick in demand is helping ease its cash burn. The carrier's daily cash burn is down to $40 million a day.
In premarket trading Monday, United stock fell 7% against broader selling in the market. Shares of United, which has a market value of $11.5 billion, have fallen 55% so far this year, as of Friday's close.
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June 15, 2020 at 07:50PM
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United taps frequent flyer program to back $5 billion loan, sees cash burn easing - CNBC
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