Delta, American Air in Talks to Borrow Billions Amid Pandemic
Delta and American Airlines are in talks to arrange billions of dollars in new financing with revenue hit by the coronavirus.
(Bloomberg) -- Delta Air Lines Inc. and American Airlines Group Inc. are in talks to arrange billions of dollars in new financing amid a broad rush for cash by airlines, casinos and other companies with revenue hit by the coronavirus pandemic, according to people familiar with the matter.
Delta is in discussions with banks, led by agent JPMorgan Chase & Co., to raise between $2 billion and $4 billion with a 364-day secured term-loan facility, the people said, asking not to be identified because the talks are private. American also is negotiating a multibillion-dollar 364-day secured term-loan facility.
Representatives for JPMorgan, Atlanta-based Delta and Fort Worth, Texas-based American declined to comment.
Carriers across the industry, including United Airlines Holdings Inc. and Southwest Airlines Co., have rushed to shore up their balance sheets or are looking to do so as rattled customers cancel travel plans and governments impose restrictions to prevent the virus from spreading.
President Donald Trump said Monday the U.S. government would strongly back the nation’s airlines, hours after the industry said it needed $58 billion in aid. The trade group representing large carriers, Airlines for America, released a memo on Monday outlining urgent needs and describing a dire financial situation.
Southwest said Monday it had entered into a $1 billion 364-day term loan and drew down another $1 billion from a revolving facility. Chicago-based United disclosed last week it had secured a new 364-day $2 billion term-loan facility, saying that proceeds would be used for working capital and other general corporate purposes.
American’s stock has tumbled 44%, and Delta’s 39%, this year on concerns about damage to their business.
--With assistance from Paula Seligson.
To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Mary Schlangenstein in Dallas at maryc.s@bloomberg.net
To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, David Scheer, Josh Friedman
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