United Airlines secures $5 billion loan backed by loyalty program

CHICAGO (Reuters) – United Airlines (UAL.O) said on Monday it is securing a $5 billion loan backed by its MileagePlus loyalty program, bringing potential total liquidity to $17 billion, an amount that senior executives said would be enough to carry it through a potential second or third wave of the new coronavirus that could hit the aviation industry.

Chicago-based United sees its daily cash burn slowing to $30 million per day by the end of the third quarter, and said it believes it could use slots, gates and routes as collateral if it ultimately taps a $4.5 billion government loan before Sept. 30.

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