(TAN): Alaska Airlines has raised nearly USD 1.2 billion in private loans to secure its financial stability and future during the COVID-19 recovery period, while balancing the appropriate amount of liquidity, the airline said in a statement.
Alaska will use 61 of its owned aircraft as collateral to back the debt: 26 Boeing 737-800s, 16 Boeing 737-900ERs and 19 Embraer 175s.
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The aircraft will remain encumbered until the debt is repaid: Series A (USD 966 million) will be repaid by Aug. 15, 2027, and Series B (USD 208 million) will be repaid by Aug. 15, 2025.
Shane Tackett, Alaska’s executive vice president of finance and chief financial officer, said, “With this financing and the actions we’ve taken to reduce our cash burn rate, we’ve created a liquidity runway that rivals our strongest competitors.”
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As part of the Payroll Support Program (PSP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act, McGee Air Services, a wholly owned ground services subsidiary of Alaska Airlines that operates independently, has also received nearly USD 30 million in funding. This is in addition to the USD 992 million in the form of a USD 725 million grant and a USD 267 million loan that Alaska Airlines and Horizon Air jointly received to be exclusively used to pay employee salaries, wages and benefits through Sept. 30.
Alaska Airlines and its regional partners serve more than 115 destinations across the US and North America.
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