United Airlines on Monday said it's using its frequent flyer program to back a new $5 billion loan, as the carrier seeks to shore up liquidity as the coronavirus weighs on demand.
By the end of the third quarter, United expects to have $17 billion in available liquidity, thanks to an anticipated $4.5 billion federal loan under the coronavirus rescue package and the $5 billion term loan facility secured by its MileagePlus program.Â
The airline expects to slow its cash burn from $40 million a day on average in the second quarter to $30 million a day in the third quarter. United's new CEO, Scott Kirby, who took the helm on May 20, told investors earlier that month that the airline entered the second quarter burning about $50 million a day.
American Airlines said last week that an uptick in demand is helping ease its cash burn. The carrier's daily cash burn is down to $40 million a day.
United's stock was down 7.7% in midmorning trading Monday against broader selling in the market. Shares of United, which has a market value of $10.6 billion, have fallen 58% so far this year.