Delta, United, and more are scrambling to raise cash, but airlines still have a huge untapped resource that could keep them afloat
Through advance sales of frequent-flyer miles to the banks that issue their cobranded credit cards, airlines could raise the cash, while banks could get steep discounts on the miles they give to customers as rewards for spending.
For example, American Express, which issues cobranded credit cards with Delta, purchases the airline's miles, and issues them to customers as a reward for spending, typically at a rate of 1-2 miles per dollar spent on the relevant credit card., both Delta Air Lines and United Airlines have approached their credit-card partners about purchasing large stocks of miles in advance .
There's also precedent for such a pre-sale, which helped airlines after both the terrorist attacks of September 11, 2001, and the 2008 global financial crisis. Delta, for instance, put up some of its planes as collateral for a $2.6 billion credit line from JPMorgan and other banks on March 20, The Wall Street Journal reported, immediately drawing down $2.3 billion. American secured a $1 billion loan from Citigroup and other banks, and United raised $2 billion in early March, followed by another $500 million, both secured by airplanes and parts.
While pre-selling miles to their credit-card partners could unlock cash, it's likely to serve as a close-to-last resort for airlines.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
United, Delta Weigh Selling Miles Early to Raise Cash in Coronavirus CrisisU.S. airlines have mortgaged gates, flight paths and just about any asset they could find in a hangar to weather the coronavirus crisis. Now, they are considering selling miles in bulk to their credit-card partners to raise cash.
Read more »
Delta absorbs order for 10 Airbus A350 jets cancelled by Latam: sourcesDelta Air Lines has taken over an order worth roughly $3 billion at list prices for 10 Airbus A350 jetliners from Latam Airlines Group ), two industry sources said.
Read more »
French family’s road trip across the United States takes a twist due to coronavirusOne French family’s plans for an iconic American road trip took a detour — and has gained new meaning — due to the coronavirus pandemic.
Read more »
Trump And Fauci Seek To Present United Front At Coronavirus BriefingDr. Anthony Fauci — one of the more recognizable faces on the task force — and President Trump on Monday pushed back on the notion that Fauci was on the outs with the president.
Read more »
Fully Fund the United States Postal Service | MoveOn
Read more »
There are at least 581,679 coronavirus cases in the United StatesAt least 581,679 patients have been infected by the coronavirus in the United States, according to Johns Hopkins University's tally of Covid-19 cases. Follow live updates:
Read more »