Airlines pledge aircraft, loyalty programs in bid to tap funding

Global airlines are pledging their brands, loyalty programs and aircraft as collateral to secure more funds in the debt markets as the coronavirus pandemic continues to batter the sector. Alaska Air Group said last week it plans to use its customer mileage plan as collateral to tap US government-backed financing. Other carriers putting assets to work as they raise funding include American Airlines, which is borrowing against its brand in a $1.2b deal with Goldman Sachs Group, and Singapore Airlines, which has raised loans secured by some of its Airbuses and Boeings. The coronavirus pandemic forced carriers to be inventive as they bolster their coffers to weather a long recovery process for the travel industry. Airlines have already tapped $49b from loan issuance, as well as $47b from bond sales, in the course of 2020, a record year for the industry. Secured loans have jumped to $21b so far this year, almost triple 2019’s full-year figure. Secured bonds reached a record high of $13b, more than doubling from 2019’s full-year issuance, according to data compiled by Bloomberg. Story has more individual carrier details.<br/>