Airlines Pledge Aircraft, Loyalty Programs in Bid To Tap Funding

The deal for American Airlines includes $1 billion of issuance secured by a first lien on certain intellectual property, including its “American Airlines” trademark and “aa.com” website domain name. The other $200 million will be backed by collateral including slots at domestic airports. The airline had earlier issued bonds and loans earlier to help it ride out the pandemic.
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United Airlines sold $6.8 billion of debt in June backed by its frequent-flyer program, setting a precedent for more to come. Alaska Air said on its earnings call last week that it’s planning to raise structured financing backed by its own loyalty program, which is worth at least $5 billion.
JetBlue Airways Corp pledged slots at major airports serving New York, such as JFK and LaGuardia, as well as its JetBlue brand, when it marketed a loan deal in June.
European airlines, meanwhile, have been turning to local governments for help. Air France-KLM secured a 2.4 billion-euro ($2.82 billion) revolving facility that’s guaranteed by the Dutch government, after previously obtaining a separate 4 billion-euro loan backed by France.
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