American Airlines plans to raise $3.5 billion in new financing to improve the airline’s liquidity as it tackles travel restrictions caused by coronavirus.

The carrier plans to raise $1.5 billion by selling shares and convertible senior notes due in 2025.

American is to also offer $1.5 billion in senior secured notes.

The airline also intends to enter into a new $500 million term loan facility due in 2024.

The company expects to use the net proceeds from the stock and convertible notes offerings for general corporate purposes and to enhance its liquidity position, the airline added.

American Airlines and Delta Air Lines said last week that a modest recovery in demand was helping to slow daily cash burn rates in June after the US government reported record low passenger numbers in April amid the coronavirus pandemic.

The fresh fundraising followed American Airlines introducing a stricter policy for passenger face coverings last week alongside other US carriers.

American may deny future travel for customers who refuse to wear a face covering.

“We believe the face covering requirement is important, so customers will notice more reminders of our policy as they travel with us, both at the airport and in flight,” the airline said.