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According to CNBC, American Airlines is planning to issue $5 billion in bonds and seek a $2.5 billion loan backed by its frequent flyer program to pay back some of its debt used to help survive during the COVID crisis.


  1. How do airlines make money from their frequent flyer programs?
  2. What is the loan interest rate?
  3. Explain whether you believe the frequent flyer miles are good collateral to back the debt.

Josephs, L. (2021). American Airlines plans $5 billion bond sale backed by frequent flyer program., March 8 (Retrievable online at