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United is tapping its frequent-flyer program for its biggest debt sale since the pandemic. The pitch? Its miles are a safer bet than the actual airline. A group of banks led by Goldman Sachs Group plans to offload the debt to investors through an offering of leveraged loans and secured bonds that could be completed before the July 4 holiday in the US, according to a person with knowledge of the matter. The unique structure could even see the debt given one investment-grade rating, the person said. The lenders agreed to provide $5b of loans to United in exchange for a claim on MileagePlus, the loyalty program the airline established in 1981. They’re now trying to convince investors to buy into the idea even as hundreds of planes sit idle on tarmac amid a collapse in travel demand. The debt will be issued through bankruptcy-remote entities that United created to house the mileage program, and which is separate from the air carrier’s operations. MileagePlus derived 71% of its cash flow in 2019 from third parties such as credit card companies that award miles to their clients, according to a company presentation. Miles earned by United passengers from flights accounted for the remaining 29%.<br/>

South African Airways’ administrators proposed the government put up at least 26.7b rand ($1.5b) to rescue the carrier after years of losses and the grounding of commercial passenger flights to contain the spread of coronavirus. The state-owned airline was placed in a local form of bankruptcy protection in December, and the rescue team led by Siviwe Dongwana and Les Matuson have asked for repeated extensions to the publication of a rescue plan. The document was posted on their website on Tuesday, and will now be reviewed by the government before a vote by creditors. The state will need to support the airline “during the post ramp-up period until it is profitable and self-sustaining,” according to the rescue plan. SAA has been loss-making for almost a decade and has required repeated government bailouts and debt guarantees to remain in operation. The funding proposal is about 10b rand more than the government was prepared to allocate to SAA in its annual budget in February, when it set aside 16.4 billion rand. Finance Minister Tito Mboweni is scheduled to deliver a revised annual budget on June 24 that will need to provide more resources to the nation’s coronavirus relief efforts. “We will assess the plan which, we are concerned, might have not been adequately accomplished,” the Department of Public Enterprises said.<br/>

Avianca Holdings reported a $121m loss for Q1 late Monday, accounting for just two weeks of severe impact from the coronavirus crisis. The airline was the first in the region to file for bankruptcy protection in the United States and spent a full three months grounded without operating any regular flights. It has since restarted some operations in Ecuador, but its hubs in Colombia, El Salvador and Peru remain closed. Avianca’s revenue fell 18% in the first three months of the year to $943m, but had fallen 51% by early June, the airline said.<br/>

Lufthansa Group’s planned 22,000 job cuts will affect 600 pilots, 2,600 flight attendants and thousands of roles in its maintenance and catering divisions, the company has revealed. In a breakdown of the cuts, Lufthansa says there will be a total of 5,000 job losses within its airline operations, including 1,500 ground staff positions. A further 1,400 jobs will go at its headquarters and in administration at its other units. Lufthansa has already announced that it is terminating its Germanwings unit two years earlier than planned and will reconfigure its Eurowings subsidiary. This will see 300 jobs cut at Eurowings and a 30% reduction in administrative staff. Austrian Airlines has a “personnel surplus” of 1,100 jobs, and Brussels Airlines will cut 1,000 jobs. A further 500 jobs will be axed at Lufthansa Cargo. The German airline group has also identified a “worldwide surplus” of 4,500 jobs at Lufthansa Technik – 2,500 of which are in Germany – and a further 8,300 positions at its LSG catering division will be affected. “According to our current assumptions about the course of business over the next three years, we have no perspective of employing one in seven pilots and one in six flight attendants as well as numerous ground staff at Lufthansa alone,” says Lufthansa labour director Michael Niggemann.<br/>

The Portuguese government estimates the loan it will provide to airline TAP SGPS SA will be of E950m, Finance Minister Joao Leao said. That figure is the “central scenario” of the government’s forecast, Leao said at a parliamentary hearing in Lisbon on Tuesday. The government said on June 10 that it expects to lend TAP as much as E1b this year out of the total E1.2b rescue loan that was approved by the EC to help the airline meet immediate liquidity needs. Like other carriers, TAP had to halt most of its operations due to the coronavirus outbreak. The airline has to prepare a restructuring plan that the government should then present to the commission within six months, Secretary of State for Treasury Miguel Cruz said in parliament.<br/>

Air Canada is seeing improved domestic bookings, but expects international flights to only pick up if governments relax travel restrictions introduced to curb the spread of coronavirus, the airline’s CFO said Tuesday. “I think you’re seeing across the industry improvements in bookings and certainly at Air Canada we’re seeing that as well,” CFO Michael Rousseau said. “But that’s focused primarily on domestic business, point to point within Canada.” Canada’s largest carrier, along with tourism groups, have asked PM Justin Trudeau’s Liberal government to relax restrictions, like requirements for a 14-day quarantine. Rousseau says he expects it will take at least three years to return to 2019 traffic levels before the pandemic even as the carrier accelerates retirements of older E190s, B767s and A319s. Nevertheless, he sees green shoots among domestic leisure flights, which are coming back first. He hopes business travel returns after the summer as corporate clients return to their offices. Rousseau said the desire to meet clients face-to-face, combined with Air Canada’s loyalty program, will help drive demand for business travel, despite companies’ current practice of working from home.<br/>

Norwegian Air and SAS are adding more flights to their schedules from July onwards as demand begins to recover following the COVID-19 pandemic, the two Nordic carriers said on Tuesday. SAS will use 40 of its aircraft in July, up from 30 in June, as it adds flights from the Nordics to Spain, Italy and Portugal among others. That is still only around 30% of last year’s level. “As restrictions and inbound travel rules are relaxed, we are seeing a rise in demand for travel,” SAS said. Norwegian will resume flights between Copenhagen and the Danish city of Aalborg from July 1, making it the airline’s first route outside Norway since the lockdown began. “Norwegian has for several years been the market leader on this route,” the airline said as it announced it would fly three daily round trips between Denmark’s largest and fourth largest cities. “Many customers have wanted to know when these flights would resume,” Norwegian said.<br/>