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Airlines Pledge Aircraft, Loyalty Programs in Bid To Tap Funding

  • Record loans and bond sales bring total debt near $100 billion
  • Secured debt grows as borrowers offer collateral amid pandemic
Traveler Covid-19 Screening At LAX Airport
Photographer: Patrick T. Fallon/Bloomberg

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 Inc. said last week it plans to use its customer mileage plan as collateral to tap U.S. government-backed financing. Other carriers putting assets to work as they raise funding include American Airlines Group Inc., which is borrowing against its brand in a $1.2 billion deal with Goldman Sachs Group Inc., and Singapore Airlines Ltd, which has raised loans secured by some of its Airbuses and Boeings.