American Airlines Group Inc. and Delta Air Lines Inc. are in talks to arrange billions of dollars in 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-based American declined to comment.
Dallas-based Southwest Airlines announced Monday that it secured a $1 billion loan from JPMorgan.
Carriers across the industry, including Southwest and United Airlines Holdings Inc., 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 that 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 Monday outlining urgent needs and describing a dire financial situation.
In addition to the bank loan, Southwest said it drew down another $1 billion from a revolving facility. Chicago-based United disclosed last week that it had secured a 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.
Gillian Tan, Mary Schlangenstein and Paula Seligson, Bloomberg