American Delta Airlines looks set to become the next airline to use its own loyalty program to secure new funding, writes The Wall Street Journal.

Delta intends to issue bonds and secure a new loan facility using its customer loyalty program, Sky Miles, as collateral. The airline aims to secure financing of $6.5 billion, equivalent to approximately SEK 57 billion.

Since the COVID-19 pandemic began, Delta has raised $16.5 billion in new capital, but more is needed as the company is still bleeding about $27 million a day. Demand for air travel is reportedly at about 30 percent of last year's levels.

Several of Delta's competitors in the US have already implemented similar schemes. United Airlines raised $6.8 billion in July using its Mileage Plus bonus program as collateral. American Airlines has put its bonus program as collateral for a government loan of nearly $4.8 billion.

Airline loyalty programs, many of which were introduced in the 1980s, have evolved into one of the most important sources of revenue for airlines. Airlines make money from the programs by selling airline points to banks and merchants, who then distribute them to customers who sign up for credit cards or make purchases.

Source: Nyhetsbyrån Direkt