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.
- How do airlines make money from their frequent flyer programs?
- What is the loan interest rate?
- 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. CNBC.com, March 8 (Retrievable online at https://www.cnbc.com/2021/03/08/american-airlines-plans-5-billion-bond-sale-backed-by-frequent-flyer-program.html)