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Photo: Joshua Lott/AFP via Getty Images

United Airlines said Monday that it secured a $5 billion loan using its MileagePlus loyalty program as collateral and has other assets to pledge if it decides to tap another $4.5 billion from taxpayers to weather the coronavirus crisis.

Why it matters: While officials at the Chicago-based airline said there's early evidence of a modest rebound in air travel, their goal is to build a $17 billion cash cushion by the end of the third quarter — three times their normal liquidity balance.

Details: The MileagePlus loyalty program is one of United's most valuable assets, spinning off $5.3 billion in cash and $1.8 billion in EBITDA profit each year, and is worth an estimated $20 billion, according to company officials.

  • The revenue comes as consumers redeem frequent-flier miles for trips, credit card purchases, hotels, car rentals and other items from United's non-airline partners.
  • While some bankrupt airlines have used their frequent-flier programs as collateral to obtain financing in the past, United said its deal is uniquely structured so it will not give up any operating control — or equity — to its lenders.
  • Goldman Sachs, Barclays Bank and Morgan Stanley are providing the loan.

What to watch: United says it has other collateral such as airport gates, slots and routes to secure a future $4.5 billion Treasury loan, should it need to under the CARES Act.

Go deeper

United Airlines asks Congress, Trump to restart talks on airline aid

Photo: Justin Sullivan/Getty Images

United Airlines' CEO Scott Kirby and union leaders asked Congress and the White House in a letter on Friday to restart talks on coronavirus aid, warning that United may be forced to furlough as many as 16,000 employees starting Oct. 1 if the current aid package is not extended.

The state of play: The federal government's payroll support program for airlines is set to expire on Sept. 30. White House Chief of Staff Mark Meadows in a meeting with airline executives on Thursday said President Trump would support a $25 billion extension to Congress' current aid package.

7 hours ago - Health

Food banks feel the strain without holiday volunteers

People wait in line at Food Bank Community Kitchen on Nov. 25 in New York City. Photo: Michael Loccisano/Getty Images for Food Bank For New York City

America's food banks are sounding the alarm during this unprecedented holiday season.

The big picture: Soup kitchens and charities, usually brimming with holiday volunteers, are getting far less help.

9 hours ago - Health

AstraZeneca CEO: "We need to do an additional study" on COVID vaccine

Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

AstraZeneca CEO Pascal Soriot said on Thursday the company is likely to start a new global trial to measure how effective its coronavirus vaccine is, Bloomberg reports.

Why it matters: Following Phase 3 trials, Oxford and AstraZeneca said their vaccine was 90% effective in people who got a half dose followed by a full dose, and 62% effective in people who got two full doses.