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Delta Air Lines uses loyalty scheme to borrow $6.5bn

Delta Air Lines is to borrow $6.5 billion backed by its loyalty scheme to bolster its finances during the Covid-19 pandemic.

It becomes the third US carrier to use its frequent flyer programme to secure loans.

Delta plans to sell senior notes and enter into a new loan, both backed by its SkyMiles programme.

The airline said: “Delta expects to use the proceeds of the notes and new credit facility for general corporate purposes and to bolster its liquidity position.”

United Airlines announced plans in June to use its MileagePlus loyalty scheme to back a $5 billion loan while American Airlines also aims to use its programme as collateral for a $5 billion federal loan.

Delta expects its capacity to be down 60% in September compared with the same month last year, with harder-hit international flying down 80% and US domestic by 50%.

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