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.

Updated 5 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 31,759,233 — Total deaths: 973,904 Total recoveries: 21,811,742Map.
  2. U.S.: Total confirmed cases as of 7 p.m. ET: 6,939,645 — Total deaths: 201,861 — Total recoveries: 2,646,959 — Total tests: 96,616,779Map.
  3. Health: CDC director says over 90% of Americans have not yet been exposed to coronavirus — Supply shortages continue to plague testing.
  4. Politics: Missouri Gov. Mike Parson tests positive for coronavirus — Poll says 51% of Republicans trust Trump on coronavirus more than the CDC.
  5. Technology: The tech solutions of 2020 may be sapping our resolve to beat the coronavirus
  6. Vaccines: Johnson & Johnson begins large phase 3 trial — The FDA plans to toughen standards.
  7. Sports: Less travel is causing the NBA to see better basketball.

Trump refuses to commit to peaceful transfer of power if he loses

President Trump repeatedly refused to say on Wednesday whether he would commit to a peaceful transition of power if he loses the election to Joe Biden, saying at a press briefing: "We're going to have to see what happens."

The big picture: Trump has baselessly claimed on a number of occasions that the only way he will lose the election is if it's "rigged," claiming — without evidence — that mail-in ballots will result in widespread fraud. Earlier on Wednesday, the president said he wants to quickly confirm a replacement for Justice Ruth Bader Ginsburg because he believes the Supreme Court may have to decide the result of the election.

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