Delta will use the frequent flyer program to return $ 6.5 billion in debt

Birmingham, Alabama, Delta Air Lines passenger aircraft are seen parked at Birmingham-Shuttlesworth International Airport on March 25, 2020 due to a reduction in flight undertaken to slow the spread of coronovirus disease (COVID-19).

Elijah Nouvelge | Reuters

Delta Air Lines said on Monday that it would borrow $ 6.5 billion supported by its frequent flyer program, the third airline to tap a loyalty program to reduce its liquidity as it is struggling with a coronavirus crisis.

The airline plans to sell senior secured notes and enter a new credit facility, both supported by its SkyMiles program. SkyMiles will lend Delta the net proceeds of the bonds offered, though a portion will go to the reserve account.

In June, United Airlines announced that it would use its frequent flyer program, MileagePlus, to pay back its $ 5 billion loan. American Airlines has said that it plans to use its program as collateral for a federal loan of about $ 5 billion.

Delta Trading held up to 1.9% Delta shares after the announcement of the new loan scheme.