Delta to borrow $6.5 billion against frequent-flyer program

Sept. 14 (UPI) -- Delta Air Lines said Monday it plans to borrow $6.5 billion while using its SkyMiles frequent-flyer program as collateral, to help it navigate hardship brought on by the COVID-19 pandemic.

The carrier said it will sell senior secured notes and enter into a credit facility, both supported by funds from the frequent-flyer program.

"The final terms and amounts of the notes and the new credit facility are subject to market and other conditions and may be materially different than expectations," Delta said in a statement. "Delta expects to use the proceeds of the notes and new credit facility for general corporate purposes and to bolster its liquidity position."

Delta said it expects capacity to be 60% lower this month compared to last year, with significant declines in international and domestic travel.

United and American Airlines said earlier this summer they would use their frequent-flyer programs to borrow $5 billion in loans.

American said last month it planned to cut 19,000 jobs in October and United said it will cut 16,000.

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