- Joe Breitfeller
Alaska Airlines Secures Around $1.2 Billion in New Private Funding; McGee Receives PSP Relief
Alaska Airlines announced on Thursday that they have raised nearly $1.2 billion in private funding, bolstering the carrier’s liquidity position as travel demand slowly begins to return. The company will use 61 owned aircraft as collateral to back the debt.
Today, Alaska Air Group (NYSE: ALK) announced that they have secured nearly $1.2 billion in private funding. As collateral for the Enhanced Equipment Trust Certificate (EETC) Alaska will put up 61 owned aircraft including 26 Boeing 737-800s, 16 Boeing 737-900ERs and 19 Embraer 175s. The Series A certificates ($966 million) will be repaid by August 15, 2027, while the Series B certificates ($208 million) will be repaid by August 15, 2025. The additional liquidity, which is expected to be funded by the end of the week, will help Alaska Airlines secure their financial stability and future as they weather the COVID-19 crisis. In Thursday’s announcement, Alaska Airlines’ Executive Vice President of Finance and Chief Financial Officer, Shane Tackett said,
“We’re proud of what our people have built at Alaska. Because of our long-standing commitment to conservative financial management and a strong balance sheet, we were fortunate to see strong demand for our offering. With this financing and actions we’ve taken to reduce our cash burn rate, we’ve created a liquidity runway that rivals our strongest competitors.”
The carrier further announced today that their wholly-owned ground services subsidiary, McGee Air Services has received nearly $30 million under the U.S. Cares Act Payroll Support Program (PSP). This funding is in addition to the $992 million that Alaska Airlines and Horizon Air previously received under the PSP to subsidize employee salaries, wages and benefits through September 30, 2020. The PSP funds that Alaska/Horizon received included a $725 million grant and $267 million loan.
Alaska Airlines and their regional partners serve over 115 destinations in the United States and North America, providing essential service for their guests and critical cargo shipments. The carrier has hubs in Seattle, San Francisco, Los Angeles, Portland and Anchorage and is known for low fares, excellent service and sustainability efforts. The award-winning airline serves over 47 million guests annually and has been named “Highest in Customer Satisfaction Among Traditional Carriers in North America” by J.D. Power for the last 12 years. Along with their Global Partners, Alaska Airlines’ guests can earn and redeem miles on flights to more than 800 global destinations.
Source: Alaska Airlines