SEATTLE – Alaska Airlines has secured nearly $1.2 billion in private loans to further secure its financial stability amid the coronavirus pandemic. The debt financing will be funded on or around Thursday.
The company will use 61 of its owned aircraft as collateral to back the debt. This includes 26 Boeing 737-800s, 16 Boeing 737-900ERs and 19 Embraer 175s. The aircraft will remain encumbered until the debt is repaid.
McGee Air Services, a wholly owned ground services subsidiary of Alaska Airlines that operates independently, has also received nearly $30 million in funding.
This is in addition to the $992 million in the form of a $725 million grant and a $267 million loan that Alaska Airlines and Horizon Air jointly received to be exclusively used to pay employee salaries, wages and benefits through Sept. 30.
The airline industry has been hit hard by the coronavirus pandemic, as people reduce to avoid becoming infected and restrictions are placed on border crossings.
The industry is trying to regain its footing by securing loans, expanding routes and increasing capacity.